Copa Airlines Plans $250M In Capital Spending
Feb 7th, 2010 | Category: Latin American News
By Inti Landauro
Panama-based airline Copa Holding SA (CPA) will invest $250 million in capital expenditures in 2010 as part of its expansion plans after weathering last year’s crisis.
Even though Latin and North America, the regions where Copa operates, have suffered from the world economic and financial crisis, the airline did quite well last year, Pedro Heilbron, the company’s chief executive, said Thursday in a lecture in New York.
“The economic crisis that hit the world didn’t affect us,” Heilbron said.
“In the first four months we had a two-digit growth (of revenue passenger mile) and we ended the last four months with two-digit growth, really we only had a decline in May-July with the H1N1 flu crisis,” he said.
Copa ordered a record 23 Boeing (BA) 737 jets in 2009 (15 firms and eight options), Heilbron said. The company also acquired an option on 11 Embraer-190 (EMBR3.BR) jets.
The company plans to get eight new jets delivered this year, while it already discarded an old MD-80, he added.
Those new jets are from orders made in 2009 and before.
Heilbron is confident the economic rebound expected in Latin America in 2010 will lift air traffic and allow growth to continue.
The company, which will report its 2009 net profit report next week, expects to increase frequencies to Sao Paulo, Guatemala, Los Angeles and Punta Cana, among others.
As it grows, Copa will keep on investing. After the $250 million planned this year, the Panamanian airline expects capital spending of $158 million in 2011 and $151 million in 2012, Chief Financial Officer Victor Vial said during the same lecture.
These two amounts might vary according to the company’s situation, he added.
Copa Airlines serves Central America, the Caribbean and some destinations in the U.S. and South America from its hub in Panama City. The company also controls Colombian domestic airline AeroRepublica.
The New York-traded shares of Copa Thursday fell 3.5% to $49.84.
A group of Panamanian investors is Copa’s main shareholder. U.S. airlines Continental Airlines Inc. (CAL) used to hold a minority stake in Copa but sold it over the past few years.
