LatAm airline shares jump as US-Iran pact knocks oil lower, easing fuel-cost pressure

By Leon Ramirez

MEXICO CITY, June 15 (Reuters) – Shares of Latin American airlines rose on Monday after oil prices fell on news of a U.S.-Iran peace agreement, easing concerns over fuel costs.

• LATAM Airlines rose 4%, while Copa Holdings CPA.N gained around 2.5%.

• Mexico-based carriers Grupo Aeromexico and Volaris climbed 3% and 5%, respectively.

• Brazil’s Azul advanced nearly 6%.

• J.P. Morgan said in a note that the drop in fuel prices could support airlines in the near term, though it expects oil prices to remain relatively elevated over the medium term.

• The bank flagged LATAM Airlines and Copa Holdings as its top picks, citing attractive valuations, stronger balance sheets and more consistent cash flow. In Mexico, it favored Aeromexico for its earnings momentum and pricing power.

• It maintained a more cautious stance on Brazil’s Azul and Mexico’s Volaris, citing company-specific factors, including potential selling pressure at Azul and near-term operational challenges at Volaris.

• J.P. Morgan estimates that a 10% move in jet fuel prices translates into roughly an 8% change in airlines’ EBITDAR on average.

(Reporting by Leon Ramirez; Editing by Kylie Madry)