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Why Gol Linhas Aereas Inteligentes, Azul, and Copa Holdings Jumped Today

By Dan Caplinger - Jul 5, 2019 at 4:33PM

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On a slow market day, one industry stood out.

Friday was a generally quiet day for the stock market, as many on Wall Street took a long weekend for the July 4th holiday. Those who remained were greeted by sizable declines at the open following a much stronger-than-expected report on employment, which raised some nervousness about whether central bankers will follow through on anticipated rate cuts. In the end, most major indexes finished with modest losses, and a few stocks managed to post strong gains. Gol Linhas Aereas Inteligentes (GOL 4.56%), Azul (AZUL 4.71%), and Copa Holdings (CPA 1.84%) were among the top performers. Here's why they did so well.

A strong day for Latin American airlines

What Gol Linhas, Azul, and Copa have in common is that they're all airlines that serve the Latin American market. Gol Linhas and Azul are both based in Brazil, while Copa hails from Panama.

Gol's 17% jump stemmed from positive news on the airline's operational performance in June. Even with higher capacity across its network, demand for Gol's services was higher by more than 14%. That helped boost domestic load factors for the Brazilian airline by 5.2 percentage points to 84.3%. International load factors increased an even stronger 13.4 percentage points to 75.5%, leading to a consolidated load factor of 83%. Gol served more than 300,000 additional passengers in June 2019 than it did in June 2018. Moreover, on-time departure performance improved as well.

Silhouette of an airplane in the sky with clouds and the sun setting in the background

Image source: Getty Images.

Meanwhile, Azul picked up 12% on similarly positive news. Azul also serves Brazil, and its load factor jumped almost 5 percentage points in June to 83.6%. Domestic passenger traffic soared on a big boost in capacity, and the company's load factor internationally was an even more impressive 87.8%. CEO John Rodgerson attributed the company's performance to "changing competitive dynamics in the Brazilian airline sector combined with the organic growth of our network." Azul sees further gains for July and pointed to its new fleet of A320neo aircraft as a primary contributor of its success.

For Copa, June traffic stats are probably about a week away. Yet its stock also moved higher today, with gains of 7.5% likely stemming from the signs of economic improvements in Latin America. From its hub in Panama City, Copa serves 80 destinations in 32 countries throughout the Americas and the Caribbean, and greater business activity in Brazil means more demand for passengers from other parts of Latin America to visit the region's largest economy.

Most U.S. investors have focused primarily on the state of the U.S. economy, but emerging markets like Brazil are still seeing good performance. If that continues, then companies like Gol, Azul, and Copa could keep seeing their share prices climb.

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Stocks Mentioned

Gol Linhas Aéreas Inteligentes S.A. Stock Quote
Gol Linhas Aéreas Inteligentes S.A.
$6.54 (4.56%) $0.28
Copa Holdings, S.A. Stock Quote
Copa Holdings, S.A.
$68.75 (1.84%) $1.24
Azul S.A. Stock Quote
Azul S.A.
$13.69 (4.71%) $0.61

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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