Copa Prepares To Restart Flights, Shrink Fleet

Copa MAX
Credit: Boeing

Panama’s Copa Airlines plans a gradual restart of some commercial flights in August before ramping up its schedule in September, albeit at just a fraction of its 2019 operations. 

The company could reach 40% of its 2019 capacity by December and is working to ensure its fleet is sized correctly during the next couple of years.

Copa has been idle since March 22 due to travel restrictions instituted by Panama’s government. The airline was granted permission to operate a limited number of flights from Panama City Tocumen International airport starting in August. Those destinations include Guayaquil and Quito in Ecuador; Havana, Cuba; Miami and New York in the U.S.; San Jose, Costa Rica; Santiago, Chile; and routes to Mexico. 

“Initially, we will serve 10 cities for passengers departing and connecting via Panama, while arrivals in Panama would be subject to specific approvals by the Panamanian government,” Copa CEO Pedro Heilbron told analysts and investors Aug. 6. 

The company plans to expand operations in September, but will operate just 10% of the capacity it deployed into the market place in 2019. By December, Copa anticipates its capacity will fall between 30% to 40% of 2019 levels. 

“To adjust to this reduced demand and capacity expectations, we continue making changes to our fleet,” Heilbron said. 

In July, Copa finalized the sale of 14 Embraer E190s, six engines and spare parts inventory. “Even though the agreed sale price was lower than our original estimates, which resulted in a $50 million non-cash and non-recurring loss, given the current market conditions we believe this was a good deal for us,” Copa CFO Jose Montero explained. 

Copa also plans to sell 14 Boeing 737-700s “and does not expect to operate these aircraft again,” the company stated. 

As the airline works to ensure its fleet size reflects current and future demand conditions, more likely than not Copa will return a portion of its aircraft coming off lease during the next couple of years. Even with the retirement of its Embraer E190s and 737-700s, Heilbron said there are probably further fleet moves Copa can make “to match where demand is.” 

At the end of the second quarter, Copa’s consolidated fleet consisted of 102 aircraft—six 737 MAX 9s, 68 737-800s, 14 737-700s, and 14 Embraer-E190s.

Copa’s six Boeing 737-MAX 9s have been idle for more than a year as Boeing works to return the aircraft to service. An additional seven MAX aircraft have been built for Copa, but not delivered. There are also seven pegged for the airline that still need to be manufactured, Heilbron said. The company expects that those 14 aircraft would be delivered 18 months after Boeing resumes delivering the narrowbody aircraft. However, Heilbron remarked that is “not a given right now. We are still in the middle of those negotiations.” 

Copa recorded a $386 million net loss for the second quarter. Excluding special items, the loss was $114.6 million, “our first quarterly loss on an underlying basis in 20 years,” noted Heilbron. The airline’s operating revenue plummeted 97.7% year-on-year to $14.5 million. 

Lori Ranson

Lori covers North American and Latin airlines for Aviation Week and is also a Senior Analyst for CAPA - Centre for Aviation.