Due to air travel restrictions implemented in response to the Covid-19 outbreak, the Panamá based carrier did not provide scheduled commercial service during the second quarter of 2020, and only operated a small number of charter and humanitarian flights representing less than 1% of the airline’s capacity in 2Q 2019.

Copa Holdings reported a net loss of $386.0 million USD (all figures in this article are US Dollars) or $9.08 per share. Excluding special items, the airline would have reported a net loss of $114.6 million, or $2.70 per share.

Copa has now scheduled the restart of its regular commercial flights for September 4th, 2020.

Special items for the quarter include a $186.8 million non-cash impairment charge on the B737-700 fleet as a result of the airline’s announcement to sell those aircraft, a $50.0 million loss expected on assets held for sale (Embraer aircraft, spare engines, spare parts and a simulator), a $22.2 million unrealized loss on the mark-to-market of the convertible notes, and a $12.3 million reversal for unredeemed tickets revenue provisions recorded in the first quarter, given the uncertainty of future passenger behavior due to the Covid-19 situation.

Copa Holdings reported an operating loss of $357.9 million. Excluding special items, the airline would have reported an operating loss of $108.7 million. Cash burn, defined as the cash disbursements less proceeds excluding extraordinary financing activities, averaged $77 million per month during the quarter.

In April, the airline raised $343 million in cash through a senior convertible note offering. Cash, short-term and long-term investments totaled $1.14 billion at the end of the quarter. The airline entered into new committed, unsecured credit facilities of an additional $150 million (currently undrawn) and closed the quarter with $1.29 billion of available liquidity. The airline repaid $95 million in short-term lines of credit, closing the quarter with a total debt of $1.3 billion.

Copa Holdings ended the quarter with a consolidated fleet of 102 aircraft – 6 Boeing 737MAX9s, 68 Boeing 737-800s, 14 Boeing 737-700s, and 14 Embraer-190s. During the month of July, the airline closed a secured revolving credit facility for an initial aggregate amount of $105 million. Including this facility, the airline now has $255 million in unutilized committed credit facilities. On July 17th, due to the Covid-19 pandemic, the Panamanian government announced the extension of air travel restrictions until August 21st, 2020. On July 31st, the airline signed a $79.1 million contract for the sale of its remaining 14 EMB-190s, 6 spare engines and spare parts, and expects to deliver these assets over the next 12 months.

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About the Author

Loren Moss is the founder and publisher of Finance Colombia. He has over 20 years of international business experience, including over a decade of experience in securities, insurance, and commercial real estate, at the institutional and international level.