Amid continued weakness in air-travel demand due to coronavirus-induced woes, Copa Holdings’ CPA traffic, measured in revenue passenger miles (RPMs), dropped 58% from the 2019 level to 753.6 million in May 2021.
In response to this low-demand scenario, the airline is reducing capacity. Measured in available seat miles (ASMs), capacity plunged 53.4% from the 2019 level to 970.9 million. With traffic declining more than the amount of capacity contraction, load factor (percentage of seats filled with passengers) deteriorated 8.5 percentage points to 77.6% in May.
Despite being significantly below the pre-pandemic level, the company’s May traffic represents an improvement from the April traffic decline of 67% (from the comparable period in 2019). This highlights the gradual recovery in air-travel demand. May load factor is also better than April’s figure of 72.8%.
Copa Holdings, S.A. Price
Copa Holdings, S.A. price | Copa Holdings, S.A. Quote
With uptick in passenger demand and the Panamanian government’s relaxation of travel restrictions, gradual increase in Copa Holdings’ operations is encouraging. Notably, the company’s flight operations in the first quarter of 2021 were 39% of the comparable period in 2019 (pre-pandemic), indicating an improvement from approximately 27% in the fourth quarter of 2020. The airline expects its second-quarter capacity to be around 45% of the 2019 level. This increase in operations is expected to support the airline’s top line by attracting traffic.
Zacks Rank & Key Picks
Copa Holdings carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are C.H. Robinson Worldwide CHRW, Expeditors International of Washington EXPD and Covenant Logistics Group CVLG. While Expeditors and Covenant Logistics sport a Zacks Rank #1 (Strong Buy), C.H. Robinson carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of C.H. Robinson, Expeditors and Covenant Logistics have rallied more than 27%, 69% and 79% in a year’s time, respectively.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report