During 2021’s second quarter, the Panamanian carrier Copa Airlines reported a net profit of US$28.1 million. The airline was the third Latin American operator to get back into the black following the COVID-19 pandemic. How did Copa achieve this? Let’s investigate further.
Was it really a profit?
Copa Airlines is mainly an international carrier. The operator flies from Tocumen International Airport in Panama City and only has one domestic route. Therefore, it was surprising that this company reported a net profit since the COVID-19 pandemic continues to impact commercial aviation worldwide.
Nevertheless, Copa Airlines reported a net profit of US$28.1 million for the quarter. But we have to take into account that, excluding special items (that is, one-time items not likely to repeat in the next quarters), the company would have reported a net loss of US$16.2 million. Two other operators have posted net profits in Latin America so far, Volaris and Viva Aerobus in Mexico.
These special items include a US$33.9 million gain related to Copa’s convertible notes and a passenger revenue adjustment of US$10.4 million.
During the quarter, Copa Airlines had operating revenues of US$304.3 million, a 52.8% decrease compared to its pre-pandemic levels.
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Copa’s slow comeback to pre-COVID levels
Copa Airlines operated at approximately 48% during the second quarter. Despite those levels of operation, the carrier performed with financial strength, as shown by its results.
During an investors call, Pedro Heilbron, Copa Airlines CEO, said,
“Due to the increase of COVID-19 cases, several countries have maintained and even increased travel restrictions.”
Nevertheless, vaccination rollout will have a positive impact on COVID-19 cases in the region. This will help ease the travel restrictions, and Copa will be able to recover its pre-pandemic levels, added Heilbron.
“On the other hand, markets without significant restrictions, mainly to and from the US and certain leisure destinations, have continued to recover. This allowed us to increase capacity quarter over quarter while also growing our load factors,” added Heilbron.
In 2021’s third quarter, Copa Airlines aims to operate at approximately 70% of its pre-pandemic capacity.
An update on Copa’s fleet
Copa Airlines closed the quarter with a consolidated fleet of 81 aircraft. It was composed of 68 Boeing 737-800s and 13 Boeing 737 MAX 9s. During the period, the carrier delivered the last Embraer 190 aircraft it had to its new owner, Alliance Airlines in Australia.
The Panamanian carrier was also looking to sell its remaining Boeing 737-700 fleet. Nevertheless, that has now changed, and while Copa had an agreement for the sale of the aircraft, it now has decided to keep the remaining six 737-700s.
Copa plans to have an active fleet of up to 89 aircraft by the end of this year (compared to the 96 operational units it had in 2019).
In 2022, Copa will receive five new Boeing 737 MAX 9, said Heilbron.
Meanwhile, Copa’s branch in Colombia, Wingo, is currently operating six B737 compared to the four it had pre-pandemic. Wingo continued regional expansion with new flights across Central and South America. It is already running at more capacity than in 2019. During the quarter, it launched flights from Panama City to San José, Costa Rica, and from Bogotá to Lima, Perú.
What do you think of Copa Airlines’ results? Let us know in the comments.