Bucking the trend around the world, Copa Airlines says it won’t need a government bailout to continue operations. The Panama flagship entered the crisis with one of the strongest balance sheets in the region, reflecting the financial strength of one of Panama’s most important institutions.
“We’re not requesting nor are we expecting any aid from the government,” Copa chief executive Pedro Heilbron told analysts. “I think the government has bigger issues to deal with.”
Copa says it expects to start flying again June 1, operating at about 12 percent of its regular schedule. By December, it expects to be flying at about 40 percent of its previous capacity, following the line of most international carriers, which expect a cautious return to normalcy.
Copa’s financial position and bold refusal of government aid is a sharp contrast to the majority of carriers around the world. Countries are spending billions to prop up cash-strapped airlines, which were unprepared for the global shutdown.
Copa is not flying any flights at the moment. But it has been able to take steps to solidify its balance sheet, including a $350 million bond offering in late April, which is part of a plan to build a “fortress” of cash,” Heilbron told analysts, according to coverage by Reuters. The company is also suspending dividend payments to stockholders in 2020.
The airline is also taking this opportunity to “retire” its fleet of 14 older Boeing 737-700 NG planes. Copa instead will focus on a “leaner” fleet composed mainly of its Boeing 737-800 NG planes, Reuters reports.
Copa has reportedly built up more than $1 billion in cash, which means it should emerge from the shutdown as strong as ever, as it continues on its plan to make Panama the “Hub of the Americas.”