For the fourth time in 2020, Copa Airlines postponed the relaunch of its commercial operations due to the current coronavirus pandemic. Now the carrier will start flying commercially again on September 5, after the Panamanian government pushed back the opening of its airspace until August 22. What does this mean for the Central American carrier? Let’s investigate further.
How does Copa do it?
Copa Airlines has not flown commercially for the last four months. The Panamanian carrier should be the most affected airline in Latin America due to the current coronavirus pandemic because its route map is entirely international. It only has one domestic route. But it seems to be doing just fine.
Almost every country in Latin America has closed its airspace to some degree. Some are already opening, like Ecuador and Peru, but others remain completely closed like Colombia, Argentina, and Panama.
The Panamanian government suspended every commercial operation on March 22. Then, four times in a row, the government has extended the suspension for one more month, due to the increase of cases in the region.
But unlike its South American peers, Copa Airlines has not shown any financial trouble. The Panamanian carrier has a strong financial position. At the start of the pandemic, it said that it could survive without flying for a long time. That doesn’t mean that it is immune to what’s happening.
Copa is planning to retire its fleet of 14 Boeing 737-700 NG planes early. At some point, it might withdraw its 15 Embraer E190 airplanes as it will focus on having an all Boeing-based fleet. Additionally, the carrier also raised liquidity with a $350 million bond offering and refused State aid.
Is Copa really flying in September?
At this point, we can’t trust that Copa Airlines is going to fly from September onwards. It is not the carrier’s fault, nor is it the government’s fault. The coronavirus pandemic is still ravaging in Latin America.
As of July 24, Panama has over 56 thousand coronavirus cases. But, as we’ve said, Copa Airlines does not rely on domestic traffic. The Tocumen International Airport in Panama City serves as a connection hub. Many people fly to Tocumen to then take another flight into smaller cities across Latin America.
That means Copa is bound to the extent of the coronavirus pandemic in other countries in the region. And the numbers are not pretty. For example, Brazil has over 2.3 million cases and its second worldwide only after the US (another key destination for Copa). Peru and Mexico have 370 thousand cases each. Chile has over 338 thousand cases, and Colombia has over 226 thousand.
There’s no sign that the governments in the region are flattening the curve. With that in mind, we expect Panama to extend its ban on commercial operations. That means Copa Airlines may continue operating cargo and humanitarian flights only.
Who is hurt the most by this decision?
Latin America is a region that relies intensely on the air transport industry. Unlike Europe and North America, it is hard to move by car and train is almost non-existent. The distances between any given city are longer than the average in Europe.
With that in mind, Copa Airlines serves a particular flying public in the region. As Rafael Echevarne, CEO of the Airport Council International for Latin America and the Caribbean (ACI-LAC), said to Simple Flying, the smaller cities suffer the most from the current grounding of Copa Airlines.
He thought of cities like Manaos in Brazil, or Bucaramanga in Colombia that may be connected domestically with carriers like GOL or Avianca, but, at an international level, they depend on the connectivity of Copa Airlines. They have the most to lose, especially if the airline reduces its fleet and its route map after the pandemic.
As we’ve stated before, Copa serves as a connecting airline. It uses Panama City as a hub for the rest of America, and it is delightfully good at this. Now, by being grounded and not knowing precisely when it will fly again, it also keeps much of America on the ground.
What do you think of Copa Airlines’ current situation? Let us know in the comments.