Panama’s Copa Airlines is banking on its advantageous geographical position and extensive network to smaller cities across the Americas and the Caribbean to eventually pull itself out of the coronavirus-driven slump.
Speaking on the company’s first-quarter earnings call on 6 May, chief executive Pedro Heilbron says, however, that the airline is currently seeing two diverging trends in the region 15 months after the coronavirus crisis struck the air transport industry.
While the airline’s home country of Panama as well as the USA are experiencing a downward trend in infection rates, and fewer travel restrictions as a result, numerous countries in Latin America such as Argentina, Venezuela and Chile are experiencing a resurgence in infections, and new constraints to free movement.
“It’s anyone’s guess when those restrictions will be lifted. Things will get better, we know that, but it’s very difficult to know if it’s going to happen in July or September or who knows,” Heilbron says. “In many cases those are new restrictions that were not in place at the end of last year.”
The airline says its first quarter loss was $110.7 million, compared to a profit of $74.3 million in the first quarter of 2021. But that’s an improvement over the $177.3 million loss the airline reported in the fourth quarter of 2020.
Revenue for the first three months of 2021 was $185.7 million, down from $595.5 million during the same period in 2020. That figure was higher than the $158.6 million it achieved in the final months of coronavirus-plagued 2020.
“It’s difficult to predict the future under the present conditions that we are dealing with, including travel restrictions by many countries and shifting demand patterns,” Heilbron adds.
At the end of the second quarter of 2021, the airline expects to be serving 60 destinations of the 80 cities it was serving prior to the global health crisis.
Copa has made a name for itself connecting small city pairs across the region, and anticipates that position to strengthen post-pandemic. Heilbron says that about 70% of its flights connect city pairs, and have less than 20 passengers per day each way. He adds that some of those city pairs will likely not be profitable with non-stop service, and Panama City is the “best placed hub” for those city pairs.
Copa added six 737 Max 9 aircraft in the first quarter and shed four Embraer 190 aircraft as part of its planned divestiture of the type to a third party. It expects to be rid of the final four E190s during the second quarter, shifting it to an all-Boeing 737 fleet. The airline ended the quarter with 81 operating aircraft - 68 737-800s and 13 737 Max 9s - from 102 aircraft at the end of the first quarter a year ago.
For the rest of the year, Copa expects to take delivery of two more Max, bringing its total number of aircraft to 83.