Panama’s Copa Airlines’ recovery depends in large part on factors it can’t control, including Latin American countries’ approaches to relaxing their pandemic-related travel restrictions.
“It’s step-by-step and in many ways subject to other countries’ opening up,” Pedro Heilbron, the carrier’s chief executive tells FlightGlobal on the sidelines of the ALTA Leaders’ Forum on 24 October. “The travel restrictions in Panama are straightforward and easy to understand” but in other countries, he adds, the situation remains more complex.
Executives from airlines in Latin America and the Caribbean are meeting in Bogota this week to discuss the region’s issues and path forward following the global health crisis. They are looking to speak with a unified voice after their governments took vastly divergent positions in dealing with the coronavirus. Mexico, for example, never truly closed its borders when Covid-19 tore around the world last year, in an effort to save its tourism industry, while air travel to, from and within Argentina almost completely shut down, and remains restricted.
Prior to the pandemic, Copa had made a name for itself by connecting secondary city pairs across the Americas and the Caribbean - through its Panama City hub - on routes that are rarely, if at all, serviced by other carriers and carry too few passengers to make direct flights profitable. The airline’s strategy benefited from Panama’s advantageous geographical location, directly at the centre of the north and south American continents. A new terminal at Panama City’s Tocumen International airport, opened in 2019, supported Copa’s ambitions.
Mirroring other regions, leisure travel demand in Latin America is rapidly approaching - and in some cases has surpassed - pre-coronavirus levels, as vacationers and those visiting family and friends finally get back in the air, Heilbron says.
But like many airline CEOs around the world, he is anxiously awaiting the return of higher-margin business travel, which remains at below 50% of 2019 levels
“What we are hearing from our corporate accounts always changes,” he says. “It’s always, the next quarter, or the next quarter, or the quarter after that. The target keeps moving.”
That said, the carrier has restored most of its network to the USA, an important market for the all-Boeing 737 carrier.
“In certain cities like Miami, Orlando and New York we are back to pre-pandemic capacity,” Heilbron says. “In Los Angeles and Washington we are close, Chicago, Boston and Tampa are slightly below what we had before.” Flights to San Francisco and Las Vegas, he adds, will be reinstated “toward the end of this year”.
Copa reports third quarter earnings results on 17 November.