With travel restrictions in place due to the Coronavirus COVID-19 pandemic, Copa Airlines issued a filing with the United States Securities & Exchange Commission indicating that the company will reduce capacity by 80% but may shut down completely while such restrictions are in place.
Based in Panama City, Panamá, Copa is one of the largest air carriers operating in the Latin American / Caribbean region, along with Chilean LATAM and Colombian Avianca. Copa enjoys a considerably stronger financial profile than many of its regional competitors. The statement the airline filed is as follows.
Over the past few days, Panama, Colombia, Ecuador, Venezuela, Honduras, Chile, Peru, Guatemala, Trinidad and Tobago, Argentina and Canada, among others, have either prohibited flights to their countries or imposed significant travel restrictions. The Company expects that these restrictions will result in the grounding of 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 maintains a strong financial position, with low leverage and high liquidity. The Company has been taking actions to seek to minimize the effects from the Coronavirus situation. 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 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.
The continuance of the current situation could have a material adverse effect on the Company’s operations and financial position. The Company is unable to predict at this time the duration of the current situation, the extent to which it will be able to reduce costs or the timing for any potential recovery.