Panama-based Copa Holdings plans to direct most of its 10% capacity growth this year to existing markets although it may consider adding new gateways in the second half of 2010.

The parent company of Panama's Copa Airlines and Colombia's Aero Republica has unveiled plans to add frequencies in four of its Panama City markets and launch flights from Bogota to Guayaquil in Ecuador.

Copa Holdings CEO Pedro Heilbron told investors today that Copa is planning to add capacity in early 2010 from Panama City to Punta Cana in the Dominican Republic, Los Angeles, Guatemala City and Sao Paulo. He says each route will be served with one extra frequency and Copa is planning similar capacity increases for a few other routes which will be implemented later in 2010.

"Our 2010 growth plan, which calls for a 10% capacity growth, will mostly be focused on incorporating new frequencies to existing markets and may include new destinations in the second half of the year," Heilbron told analysts during a conference call to discuss the company's $70 million fourth quarter net profit.

"The new frequencies will for the most part be added in markets that are consistently running at very high load factors and where the marginal costs for adding this service is low," he adds.

Heilbron says Aero Republica, which launched flights from its Bogota hub to Quito in Ecuador late last year, will add Guayaquil in March. Aero Republica will operate four weekly frequencies on the route from 26 March using Embraer E-190s. According to Innovata Bogota-Guayaquil is currently only served by Avianca, which operates two daily Fokker 100 flights on the route.

Copa already operates two daily Boeing 737-700 flights to Guayaquil from its Panama City hub as part of its vast intra-Latin America network which includes every major and several secondary markets in the region. Aero Republica's international network, however, was previously limited to Panama and Venezuela as the carrier has been focusing on funnelling most of its international passengers via Panama City.

But Aero Republica is now looking at launching its own direct services from Bogota to several international destinations which are already served by Copa, including Miami and Sao Paulo, as part of the next phase of its expansion programme. Copa Holdings CFO Victor Vial points out that when Copa acquired Aero Republica in 2005 the carrier was only a domestic operator but now 25% to 30% of its capacity is international with Panama City flights accounting for most of this capacity. This ratio will continue to grow as new international routes are launched.

Vial says capacity at Aero Republica is expected to grow by 6% to 7% this year while Copa capacity is projected to grow by about 12%. He says most of the growth will come in the second half of the year as more 737-800s are delivered.

Copa Holdings will grow its fleet by seven aircraft this year as eight 737-800s are delivered, including two which entered service last month. The company plans to only return one aircraft, its last Boeing MD-80. Aero Republica operated its last MD-80 flight on 30 January and the aircraft is being returned to its lessor this month. But capacity at Aero Republica is growing as E-190s from Copa's fleet are transferred to the Colombian carrier.

Source: Air Transport Intelligence news