February 5, 2023

Azul (AZUL4) and Gol (GOLL4) together have lost $1 billion in market value since the start of the war; And now? – Money Times

To get an idea of ​​the hole size, Azul was the company that lost the most market value in the world since February 24 (Photo: Money Times / Gustavo Kahil)

It hasn’t been easy being a shareholder in an airline in recent years. After facing one of the worst epidemics in recent decades, blue (blue 4) And the goal (ghoul 4He must now deal with the effects of the war on Ukraine.

In Monday’s session, Azul’s share fell 18%, in one of the worst declines since the start of the pandemic. The target fell by 17.36% to 12.28 Brazilian reais.

To get an idea of ​​the hole size, Azul was the airline that lost the most market capitalization in the world since February 24, the date that saw the start of the war: US$677 million.

In third place was Gol, with a loss of $406 million. Together, they lost $1 billion. The data was prepared by economics to request Money Times.

Why did you fall today?

In addition to the effects of the war on tourism, the actions of the two companies were mainly affected by the increase in petroleumthat has reached historic levels After the United States considered banning Russian goods from the market.

One of the major expenses for airlines, which accounts for 20% to 30% of total operating expenses, is fuel specifically. So, from the moment oil enters a very expressive high, this directly affects the financial result of the company, and even more so in a sector where margins are low and leverage rates are high,” says Guilherme Ishigami, broker at the trading desk of variable income for RJ Investimentos.

It also states that a possible escalation of dollar It is also on the radar. “It didn’t happen, but in a risk aversion scenario, it could happen, which would increase costs even more,” he adds.

For Alexsandro Nishimura, Economist, Head of Content and Partner at BRA, the conflict in Eastern Europe could generate a harmful mix for the sector, with fuel costs increasing due to the surge in oil, as well as punishing demand from the aviation sector and potential international flight restrictions.

And now Jose?

What investors are asking themselves at this point is whether airline stocks are a risk or an opportunity. According to Marcel Andrade, President vitreous, according to the company. He remains optimistic about azole’s role, but in the longer term.

“In the short term, the stock will remain volatile due to the war’s volatile commodity prices, especially oil,” he says.

In Nishimura’s view, it is difficult to talk about risks or opportunities in such an uncertain environment, with factors that can lead to strong moves, “sometimes derived from potential irrationality, but which can be explained by investor aversion.”

“Any changes in the conflict in Ukraine can generate strong volatility, up or down. It is not only that ceasefires or intensification of conflicts, but also any sanctions or decisions on the supply of goods can lead to larger movements,” he adds.

According to Pedro Galdi, an analyst at Mira’s originsCommodity advancement tends to have a direct impact on the fuel cost of companies in this sector.

“A drop can only be a buying opportunity if the investor is willing to hold the asset for the long haul and take profits in the long term, since stocks tend to suffer from strong volatility,” he says.

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Watch the biggest drops:

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blue blue 4 18.00%
goal ghoul 4 −17.36%
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espadrilles ALPA4 −9.87%

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