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Aviation History
2002
2002 - 1744.PDF
6,000-strong workforce by around 10%. "The 11 September attacks made us take a hard look at what we are doing - and to be swinging back into profit during 2002 under the current environment and with smaller revenue tells you we're doing a tremendous job with costs," says Federico Bloch, TACA chief executive. Copa outpaced both TACA and LanChile as the fastest growing Latin Americ a/Caribbean operator in the period 1994- 2000 and, despite being hit by high fuel prices, turned a profit last year and expects to remain in the black through this year. The carrier did reduce its schedule after 11 September and has been vigilant in keeping capacity in check. Says Copa chief executive Pedro Heilbron: "Our secret has been to stay very focused - to fly where we're needed and stay away from other people's territories." Consolidation El Salvador-based TACA was the region's first carrier to start to break down the geo political barriers that have hindered devel opment, when in the 1990s it consolidated under one consortium the airlines of neighbouring Costa Rica, Guatemala, Honduras and Nicaragua. Panama also came under the TACA umbrella until 1999, when Copa left the group as the result of selling 49% of its stock to Continental Airlines. The com pany has since further extended its wings, taking an equity stake in TACA Peru. It has also signed agreements with Lloyd Aereo Boliviano and Venezuela's second largest carrier, Aserca. "The intention with these arrangements is not to always take an equity position. We're an airline that believes in co-opera tion, particularly in markets that are too thin. There are a lot of services that without co-operation are not viable," says Bloch. TACA's move into Peru has brought it face to face with LanChile, which has backed its own local partnership LanPeru, but Bloch denies any suggestion of a sphere-of-influence conflict. "They flow traffic to and from Lima and the USA and have a lot of domestic services, which we don't have. We have instead established an intra-South American hub," he says. Since parting ways with TACA, Copa has been busy trying to position Panama as the hub of the Americas, operating to more than 30 destinations in the northern and southern hemispheres. Key to this are a growing number of open skies agreements which now include Chile, Guatemala, Nicaragua, Peru and the USA. But efforts to extend this to Colombia and Mexico appear to have stalled. "We spent the last two weeks negotiating with Colombia and Mexico," Copa's Heilbron said in May. "Panama has offered open skies but has had no luck, not a single additional fre quency from these two countries." The FAA's decision to downgrade both El Salvador and Panama to Category 2 in 2000 and 2001, respectively, has under mined for now efforts by both Copa and TACA to build alliances with larger carriers LanChile broke new ground by negotiating with Airbus jointly with TACA and TAM.a model some would like extended to items such as fuel and services outside the region. Copa has been forced to remove Continental's code from its flights, which, with a freeze on current services to the USA, is costing the airline $2 million a year. TACA was in the midst of seeking antitrust immunity for its codeshare with American Airlines, when the IASA action forced it to withdraw the application. Both carriers hope to be upgraded to Category 2 before the end of the year. The other key to the two airlines' success is their decision to focus on a Southwest Airlines-type fleet structure, although they are considerably smaller in size. In 1999 Copa ordered 12 Boeing 737-700s, of which the final four are due for delivery in June, July, November and December with financing by Citibank and WestLB. Copa is also looking to add between eight and 10 additional 737-700s or -800s to complete the replacements for its eight remaining 737-200Advs and provide capacity for growth. The airline, which operates the aircraft on some of the longest 737 segments in the world, such as to Santiago and Los Angeles, is considering adding winglets to the new aircraft for extra range. Simplicity TACA accelerated the retirement of its legacy fleet of 737s, leasing out many to partner carriers such as Aserca. By the end of last year it boasted an all-Airbus fleet, which has proved to be a major cost sav ing. The airline now operates five A319s and 23 larger A320s, with an average age of three years. The carrier holds options on up to 24 more aircraft, some of which it will replace with older Airbus aircraft once cur rent leases have expired. The airline has disposed of A300 freighters and has no intention of operating a widebody aircraft in the foreseeable future. Bloch says: "We want to have the best service at the most cost-effective price, so we need to keep it simple and we need to start with one common fleet - that's what really drives your costs down. Our A320s are identical - same engines, spares and components. We're talking a degree of commonality much higher than even at Southwest. This is the youngest in Latin America, second only to JetBlue." • "We want to have the best service at the most cost-effective price, so we need to start with one common fleet - that's what really drives your costs down" FEDERICO BLOCH, TACA CHIEF EXECUTIVE 34 11-17 JUNE 2002 FLIGHT INTERNATIONAL www.fliqhtinternational.com
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