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Why Azul Stock Is Up Today

By Lou Whiteman - Updated Mar 11, 2021 at 2:32PM

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It's back to business as usual for the Brazilian airline.

What happened

Shares of Azul (AZUL -3.17%) traded up more than 7% on Thursday after the Brazilian airline's board approved a share repurchase plan. The move is another small indication that airlines are finally getting back to normal.

So what

Azul and other airlines have been hit hard by the pandemic, which has caused travel demand to plunge and sent carriers scrambling. Though some Latin American airlines were forced to seek bankruptcy protection, Azul flew through the crisis relatively well.

A plane landing at night.

Image source: Getty Images.

The question now is: How soon will things get back to normal? Azul provided some small sign of normalcy in saying its board approved the purchase of up to 2 million shares related to the company's restricted-stock-unit plan in place since 2014.

The move shouldn't affect the underlying business or the stock. But it is a friendly reminder that business is continuing as the pandemic hopefully moves into the history books.

Now what

Azul shares have been on a wild ride over the last year, falling as much as 75% in the early days of the pandemic but slowly recovering in the months since. Following Thursday's boost, the stock is off by about 5% over the past 12 months.

That feels about right, given where we have been and how long it might take for us to go further. South American airlines tend to be more reliant on international travel than their U.S. counterparts, which likely means the continent's carriers could take longer to recover. But Brazil has a robust domestic market that should help Azul to outperform airlines from other countries.

Still, the pandemic is far from over and the risk of turbulence remains. That might put a limit on how much altitude Azul shares can gain in the months to come.

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Azul S.A. Stock Quote
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