In the News from Panama

United, Copa Expand Flight Relationship

Copa Airlines has signed a new agreement with mega-U.S. airline United that will expand the number of flights between Panama and the U.S.

The new agreement, which includes Colombia airline Avianca, will allow the three airlines to share revenue and coordinate schedules. The deal, if approved by regulators, will “provide substantial benefits for customers, communities and the marketplace for air travel between the United States and 19 countries in Central and South America,” Copa says.  

The airlines already have a code-sharing deal, but this joint pact will allow the airlines to better organize routes, offer more non-stop flights and reduce travel times.

The airlines expect the agreement to “drive significant traffic growth at major gateway cities throughout Latin America, which will help bring new investment and create more economic development opportunities for their communities,” Copa said in its release.

The deal is also signal that United is ready to expand in Latin America, which has been better serviced by rival American Airlines. Flights to and from Latin America accounted for only about 8 percent of United’s revenue in the third quarter, CNBC reports.

These types of joint ventures are becoming more common, as airlines look to cut costs and better organize routes, while sharing revenue, according to media reports. “Foreign ownership rules generally limit airlines from abroad to purchase another carrier outright, so such deals along with minority stakes are a way to provide them with exposure to international markets,” CNBC reports.

The United deal will “provide customers with expanded codeshare flight options, competitive fares, and a more streamlined travel experience,” Copa says.