Panama’s Copa Airlines has warned that a “complete, temporary shutdown of its operations” is possible in the near future as it contends with travel restrictions and reduced demand related to the COVID-19 coronavirus pandemic.
In a March 17 regulatory filing with the US Securities and Exchange Commission, the airline noted that over the past few days a number of its destinations “have either prohibited flights to their countries or imposed significant travel restrictions.” They include Argentina, Canada, Chile, Colombia, Ecuador, Guatemala, Honduras, Panama, Peru, Trinidad and Tobago and Venezuela.
As a result, Copa, one of the leading carriers in Latin America, plans to ground most of its fleet over the next few days.
“At the moment, the company is expecting to reduce over 80% of the capacity planned for April, without ruling out the possibility of a complete, temporary shutdown of its operations,” Copa stated in the filing.
Copa operates flights to 80 destinations in 33 countries in the Caribbean, Latin America and North America with a fleet of 102 aircraft comprising six Boeing 737 MAX 9 aircraft (already grounded), 82 737NGs and 14 Embraer E-190s.
In February, the carrier kept systemwide capacity flat year-over-year and increased passenger traffic 0.4% compared to February 2019, while its load factor in February was 84%. Copa noted that it maintains “a strong financial position, with low leverage and high liquidity.”
However, the airline added: “The extent of the impact of this situation on the company’s operational and financial performance will depend on future developments, including the duration and spread of the [COVID-19 coronavirus] outbreak, related travel restrictions and how quickly demand for air travel recovers after the virus is controlled and travel restrictions are lifted, all of which are highly uncertain and cannot be predicted at this point.”
Copa acknowledged the situation was unpredictable and could have a material adverse effect on its operations and financial position. The company said it was unclear to what extent it will be able to reduce costs.
Photo credit: Copa Airlines