The airline stocks that suffered the most after U.S. President Donald Trump barr...
), saw their shares tumble over 30% on Thursday, a record for each. Year to date, both companies’ New York-traded shares are down more than 70%.
But analysts say their negative performance is tied to Brazil’s broader economic woes and to a general panic over riskier, more volatile shares. “Anytime that the dollar goes up, that affects of our costs,” said Eduardo Sanovicz, who heads Brazil’s airline industry group ABEAR. “It’s not a positive thing.”
But the carriers’ negative performance also highlights that the airline business in Brazil has struggled for years to be profitable, weighed down by a shaky economy, high labor costs, and a volatile currency. Brazil’s airline trade group is urging the government to offer tax relief and incentives to cushion the coronavirus impact, mimicking calls from industry associations worldwide. Brazil’s government has said it is considering such a move.Azul said on Thursday that it will cut its international flights by up to a third, but that it had not experienced a collapse in demand on domestic routes. Still, it has implemented a hiring freeze and will ask some workers to take unpaid leave.
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