Copa to expand Panama City hub

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Published: June 25, 2012

Copa Airlines 737-800. By Kurt Hofmann

Fast-growing Copa Airlines (CM)—which joined Star Alliance last week with subsidiary Copa Colombia—is eyeing further expansion this year of its Panama City (PTY) hub (ATW Daily News, June 21).

CM CEO Pedro Heilbronn told ATW in Panama City thata strong economy, ideal geographic location and increasing Latin American passenger traffic have all played a part in the carrier’s enormous growth.

PTY’s Hub of the Americas is undergoing a $ 100 million terminal expansion, called Muelle Norte, to open 12 additional gates. “This enables our growth for the next three to five years,” Heilbronn said. Another terminal expansion, Muelle Sur, which is scheduled to open in August, will add 20 gates. “Nevertheless, the hub could become more complex and complicated,” he said, pointing out that 50% of CM passengers transfer in PTY.

“We have become [a] leading airline in Latin America and are serving markets via Panama,” Heilbronn said, adding that PTY could be a hub for overseas Star Alliance members such as Lufthansa.

He said noted that 40% of its destinations were added just in the last five years. Five additional cities, which could include Las Vegas and Recife, Brazil, will join the network this year.

Heilbronn said CM has 38 aircraft scheduled for delivery through 2018. CM and CM Colombia will operate 83 aircraft by the end of this year, 90 in 2013 and 94 in 2014.

Controlling costs are key for the airline, according to CFO Victor Vial. “40% of our operating costs are for fuel. We improved fuel burn by 2%, that’s a lot,” he said.

Copa’s 2011 capacity grew 22% year-over-year. “We added nine new destinations, 10 Boeing 737-800s, and increased our time banks in PTY from four to six times,” Vial said. CM operates 1,800 weekly departures.

Between 2006 and 2011, departures from PTY increased from 179 to 274 daily flights. “Last year, our revenue grow 29% by adding 22% additional capacity,” Vial added.

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