Copa Holdings CPA reported a significant decline in traffic for December 2020 on a year-over-year basis due to coronavirus-led low travel demand. Consolidated traffic, measured in revenue passenger miles (RPMs), plunged 65.7% year over year to 622.6 million.

The airline’s capacity (measured in available seat miles/ASMs) declined 60.8% year over year to 832.3 million in December. Load factor (percentage of seats filled by passengers) slipped 10.6 percentage points to 74.8% as traffic declined more than the contraction in capacity.

Despite this massive year-over-year decline, the picture was brighter sequentially. Notably, the December decline in traffic was less than the November traffic decline of 74.6%. This reflects the gradual improvement in air-travel demand. Even the capacity contraction of 72.3% in November was greater than the December figure.

The gradual uptick in the traffic scenario can be gauged from Copa Holdings’ stock price movement over the past month. Shares of this Latin-American carrier have gained 5.9% in the period against its industry's 0.9% dip.

Zacks Rank & Key Picks

Copa Holdings currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Transportation sector are FedEx Corporation FDX, ArcBest Corporation ARCB and Herc Holdings HRI, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term (three-five years) expected earnings per share growth rate of FedEx, ArcBest and Herc Holdings is pegged at 12%, 9.8% and 12.6%, respectively.

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