Copa Colombia

Panama's Copa pursues more rapid expansion with Las Vegas, Curacao, Liberia and potentially Recife

Panama’s Copa Airlines is continuing its rapid expansion by opening at least three new routes in June, which will increase its hub of Americas operation at Panama City to a market leading 59 destinations. As is typically the case with Copa, the carrier is evenly distributing its network expansion in 2012 to different regions with Las Vegas in North America, Curacao in the Caribbean, Liberia in Central America and potentially Recife in South America being added. Again typical for Copa, all the routes are not currently served by any carrier and Copa will initially operate them with less than daily frequency.

New tax on transit passengers could lead to slower growth at Panama’s Tocumen Airport and Copa

Panama City Tocumen International Airport is planning to introduce in 2012 a transit tax that threatens to impact demand and slow down growth at the biggest hub for intra-Latin America travel. Copa Airlines, which relies heavily on transit traffic to generate one of the aviation industry’s highest profits margins, is fighting the planned tax along with IATA.

Transit passengers at Tocumen are currently exempt from paying departure tax, as is the case at airports throughout Latin America and the world. But government-owned Tocumen is planning to introduce a USD2.50 transit tax while raising the current USD40 departure tax to USD42.50.

While USD2.50 is a relatively small amount and would generate only about USD6 million per year, Copa and IATA are vehemently opposed to the concept of taxing transit traffic. The fear is the tax, if implemented, would increase over time, significantly impacting demand. Tocumen three years ago doubled the departure tax from USD20 to USD40, setting a precedent for a rapid rise in fees which could be repeated with the initially small transit tax.

Avianca benefits in Colombia from restructuring at new LAN subsidiary Aires

Avianca has been the main beneficiary of the restructuring at Colombian-low cost carrier Aires, growing its share of the domestic market and improving its profitability since LAN acquired Aires late last year. Avianca also has benefitted from capacity reductions by the other two main players in Colombia’s domestic market, Copa Colombia and Satena.

Copa reports record 2Q profit, upgrades forecast on strong intra-Latin America demand

Copa has reported record second quarter earnings as strong demand in Latin America fuelled increases in yield and load factor that were sufficient to offset rising oil prices. The Panama-based airline group remains bullish on its prospects for the rest of 2011 and beyond as economic conditions in its markets remain favourable. As a result, Copa expects to continue posting industry-leading operating margins of about 20% even as capacity grows at a clip exceeding 20%.