Why Shares in Brazilian Airline Azul Rose 5% Today
Shares in Brazilian airline Azul (NYSE: AZUL) were up more than 5% at 1 p.m. EDT. The move comes from positive sentiment on the airline sector in general and a recognition that Azul is one of the best-positioned airlines to benefit from a multiyear recovery in commercial aviation.
Jet fuel is a crucial component of airline costs, and now that the price of oil per barrel has dropped below $100 from around $125 a couple of weeks ago, investors are feeling a bit more optimistic about the profit outlook for the sector. Moreover, a host of leading airlines gave more positive outlooks at an industry conference this week.
If that wasn't enough, a major manufacturer of aircraft engines, General Electric (GE), recently forecast that strong growth in commercial air travel would lead to a 25% increase in shop visits for aircraft in 2022. GE's management believes the narrow-body market will return to 2019 levels by early 2023 and the wide-body market by early 2024. The disparity partly comes down to an earlier recovery in domestic travel, which tends to use narrow-body aircraft.
Source Fool.com