Copa Airlines moves to a single fleet type to meet cost targets

Two years ago Copa Holdings made the decision to shrink its Embraer 190 fleet to 19 aircraft and decided that the subfleet would remain at that level during the next few years.

But in late 2018 Copa opted to sell six of its Embraer 190s and now the company plans to rid itself of the remaining 100-seat jets during the next 18 months.

Although Copa will face some short term headwinds created by the acceleration of removing the Embraer 190 from its operations, the company believes those challenges are worth the longer term benefits, which include meeting its unit cost targets: a cost per available seat (CASM) excluding fuel below USD6 cents.

That is a benchmark cost performance for ULCCs worldwide. And while Copa's business model is firmly entrenched in a full service offering, it is notable that its cost targets fall within the ULCC range.

The decision to accelerate the Embraer 190 retirements along with the service re-entry of the Boeing 737 MAX will create a level of flux for Copa in 2020, but its preliminary margin guidance for the year remains robust.