Copa Airlines shores up margins in 2017 as conditions in Latin America slowly improve

Panama’s Copa Airlines is close to reaching its historically high margin performance in 2017 as the company’s yield, RASM and cost metrics continue to improve.

Copa’s own capacity growth for the year, projected in the high single digits, stems largely from restoring aircraft utilisation levels that have fallen during the last couple of years as the airline made adjustments in the wake of a weak economic environment in Latin America. With the region embarking on a slow recovery and various regional currencies stabilising, Copa feels comfortable with its growth projections.

Over the long term, Copa has fleet flexibility to end 2024 with a range of between 115 and 175 aircraft, depending on market conditions. From 2015 to 2019 the airline is shrinking its fleet of smaller gauge Embraer 190s from 23 to 19 aircraft, which Copa believes is the optimum number for the next few years. Beyond that point, Copa may examine new 100-seat aircraft technology, or decide to become an all Boeing 737 operator.

After adding new routes in 2016 to Chiclayo, Peru; Rosario, Argentina; and Holguín, Cuba, Copa is extending its reach in Argentina in 2017, with new service to Mendoza. The airline is also adding flights to Denver, a hub for Copa’s fellow Star Alliance partner United Airlines. Mendoza allows Copa to market north-south connections without a stop in Buenos Aires, while Denver, which was previously joined to Panama City by United, should allow Copa to maximise connections for traffic flows from Latin America through United’s hub.

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