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Sao Paulo-based airline Azul SA  (AZUL) on Monday became the latest carrier to highlight the improvement in Latin America's economy, even though CEO David Neeleman declared, "Brazil still hasn't recovered."

"While you haven't seen a recovery yet, you're seeing stability," Neeleman said on the carrier's second quarter earnings call. "We're seeing stable bookings."

Azul shares closed Monday at $25.68, up 1%. Shares have gained 27% from its April IPO price. Meanwhile, shares in Brazilian carrier Gol Linhas Aereas Inteligentes SA have gained 124% year-to-date while shares in Chilean carrier Latam Airlines Group SA have gained 45%.

Shares in Panama City-based Copa Holdings SA (CPA)  were the big winner in the group on Monday, rising 3%. Copa reported earnings last week: its shares are up 37% year-to-date.

Additionally, shares in American Airlines Group Inc.  (AAL) , the biggest U.S. carrier in Latin American, gained 1% on Monday, as did peers Delta Air Lines Inc. and United Continental Holdings Inc.

  • An Airline Fare War Has Broken Out

As for Azul, the airline watched revenue rise 19% in the second quarter while the carrier narrowed its loss by 72% to about $10 million. Buckingham Research analyst Dan McKenzie has a buy rating and a $33 target price. China's Hainan Airlines owns 24% of Azul, while United Continental Holdings Inc. (UAL) owns 5%.

"Azul is a multi-year pre-tax earnings improvement story on industry capacity that has been sharply restructured in Brazil over the past 3 years," McKenzie wrote Monday. Shares represent "compelling value in the context of the carrier's multi-year pre-tax earnings growth story," he said.

On American's second quarter earnings call in July. President Robert Isom said Latin America region passenger revenue per available seat mile gained 15% in the second quarter.

American shares are up 5% year-to-date. The carrier's Miami hub provides a unique ability to serve Central and South America.

In the current quarter, "We think Latin America will again be our best-performing entity with performance in line with the first quarter," Isom said. "We expect positive Latin year-over-year performance for the remainder of 2017."

As for Copa, the carrier reported on August 9 that its second quarter operating margin was 14.4%, and it raised current quarter margin guidance to between 16% and 18%.

"The company's consistent profitability and margin expansion are a testament to the strength of their business model, and underpin our belief that profitability and earnings growth will continue," wrote Deutsche Bank analyst Mike Linenberg, who has a buy rating and a $137 price target.

Linenberg also wrote that GOL, which reported second quarter earnings on August 10, "eked out a small operating profit for its June quarter, which is typically the company's seasonally weakest quarter (it includes the start of winter for countries in the southern hemisphere).

"The airline's 1.7% operating margin was its first in the 'black' since 2010 and roughly 900 bps better than a year ago as the economic backdrop continues to improve," Linenberg said. "Furthermore, the airline is starting to see the return of corporate travelers."

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.