Keep Your Eyes on Copa


There has been a lot of change in the Latin American air travel market over the last few years with major shuffling of airlines in Brazil, blockbuster mergers, and shifting alliances. But there’s one airline that’s flown a little under the radar… Panama’s Copa. This airline is one of the most profitable airlines in the world, and it is rapidly growing throughout the Americas.

Copa is based in Panama and uses its Panama City hub as a connecting point between North and South America with skill. Panama has been a key transit point in the world for a century (hello, canal), but its location is equally ideal for air travel and that allows for some surprising frequencies.

Copa Takes on Panama Canal

This summer, the airline will fly roughly twenty flights every day from Panama to the US and Canada. That’s 5 daily to Miami, 4 daily to Orlando, 3 daily to LA, 2 daily to Washington/Dulles and New York/JFK, and 1 daily to Boston, Chicago, and Vegas. Many of these are new as the airline is in a phase of rapid growth. There’s also four weekly flights to Toronto and 18 weekly to San Juan.

San Juan is just a small piece of its sizeable Caribbean and Central American operation. Every day, Copa’s fleet of 737s and Embraer 190s gather people from throughout the region and bring them to the airline’s hub of the Americas in Panama. Then the airplanes go on to destinations throughout South America. The scope is pretty incredible, as you can see from the map below. The 737s go as far south as Montevideo, Buenos Aires, and Santiago.

David Lee Roth Panama

Panama’s location in the middle of the two continents makes for a very efficient connecting hub from a timing perspective. It can offer short connections on routes that often fall very close to a direct routing on the map.

The most important part of Panama’s location, however, is where it falls on the 737 range chart. Between North and South America, airlines are often forced to use widebodies with greater range because of the distance between the hubs. Panama, however, is different.

At 2,941nm, Montevideo to Panama City blocks in at over 7 hours and is about the same distance as going from JFK to London. But the 737 can handle it, especially since no lengthy overwater flying is required. To the north, Los Angeles lies 2,616nm away but the 737 works fine there as well.

Of course, this means Copa is fighting for a different kind of customer than other airlines, especially in the pointy end of the airplane. Copa’s first class is a domestic-style offering that is never going to compete with the flat beds going to Sao Paulo from big US destinations. But it doesn’t need to.

For some, the faster connecting option and frequent flights make it worthwhile. And the ability to get between, say, LA and Belo Horizonte with just a single sub-one hour connection in Panama means that it will take hours less than it would to go on other airlines. And the same can be said for connecting within Latin America. Panama City is a rock star of a hub.

While this kind of operation could be successful enough on its own, Copa is a new Star Alliance member and has had a relationship with United (via Continental) for years. In fact, Continental used to own a big chunk of the airline, and that’s why the airplanes look so similar on the outside.

The relationship is so close that Copa actually uses MileagePlus as its frequent flier program. These relationships give Copa the ability to flow even more people through its Panama hub.

This all sounds good, but, well, is the airline making money? Boatloads. Seriously. Last year, Copa made a 17.9 percent operating margin, and that was a DECREASE from prior years. I highly recommend reading CAPA’s recent analysis on the subject.

In short, Copa is kicking butt and taking names. With those kinds of margins, I’d expect to see these growth rates continue for awhile. Next time you see a funny looking United airplane at your airport, look twice. It might be Copa.

[Original Gatun locks at the Panama Canal photo via Shutterstock, Copa aircraft photo via Digital Media Pro /, David Lee Roth photo via s_bukley /]

Get Cranky in Your Inbox!

The airline industry moves fast. Sign up and get every Cranky post in your inbox for free.

25 comments on “Keep Your Eyes on Copa

  1. I’m looking to fly Copa for the first time next month! Seeing as they have an agreement with United to not serve the Continental hubs directly…I think this is the perfect way to leverage against WN at HOU. Have Copa start HOU-PTY service out of the common use gate that has to be built at Hobby.

    1. Agreed that PTY-HOU on Copa would be interesting. Copa’s strength is in frequency and regional coverage. In the same way that EK serves 11 points in India, Copa serves several points in Colombia with multiple daily service to PTY, including SEVEN DAILY to Bogota. As a passenger from regional Colombia, I would choose PTY over a BOG connection every time.

      The PTY hub is now at 6 banks, which means connections are usually no more than 90 min in either direction. It makes for some very compelling options in an otherwise lackluster field of competitors in Central America.

      But the reason it has succeeded is cause the Panama government is fully supportive. A terminal extension and constant upgrades of facilities is what allows Copa to operate “The Hub of The Americas”.

      Now the next step I believe is for Copa to attract Star partners to serve PTY. Right now LH seems more interested in Avianca and BOG but soon enough I believe they’ll give FRA-PTY a shot, possibly 5 weekly. Given Avianca in Star, I think Copa would have preferred to stay in SkyTeam but the United merger gave them no choice. TK has bigger fish to fry before PTY. I’m surprised KLM is able to maintain their AMS-PTY despite Copa going to Star but as the only long haul carrier they do it. Maybe we’ll see a one-off codeshare between KL and Copa.

  2. Had the chance to try CM from SCL to PTY last year, to connect to a UA flight to IAH. Good experience all the way around – on-time, friendly crews both at the gate and in the air, reasonably easy transit in PTY (though it is a bit of a hike from the CM gates to the UA gates), and a lounge agent in PTY that went out of her way to make the transit experience as comfortable as possible for a member of our party that had mobility issues. The only negative as you note is the lack of a true F/J class seat, which was a bit uncomfortable on a 6 hour flight, but given that the cost was barely more than a coach ticket, it was worth it. I’d recommend them if you’re flying to South America.

  3. While people in the USA may like their nonstops, a lot of people in the Caribbean/Central America wanting to travel between there and South American have for a long time be used to having to go north to connect in Miami to head back south to where they want to go. With Copa serving a number of major cities in South America, it makes it easier for people to travel with out having to spend the time and added money to head to MIA first.

    Copa can have a large following outside the US, but being connected with Star opens a lot up for them in the U.S.

  4. The other thing that makes PTY a great hub is that you never have to pass through immigration/customs when making a connection. Just get off your flight and take the short walk to your next gate. And being a relatively small airport, that walk is not far — a 10 min walk at worst. I fly Copa regularly, and have to say that both the airline and the airport run one fine-tuned, efficient operation.

    1. Outside of the US, I have yet to find an airport requiring immigration if you’re a transit pax. Of course, my experience is still limited, but it seems to be a pretty common setup.

      1. Australia (and, I think, New Zealand, for citizens of some countries) also has this same requirement. This includes for flights that transit Australia en route to another country – e.g. CI has a flight TPE-BNE-AKL and all pax have to disembark in BNE, clear customs (with the correct documentation) and then get back on the same aircraft.

        I worked as an agent for a student travel agency here in Melbourne, Australia for about 10 years. We had quite a few clients from Latin America (quite a few students from Venezuela, Colombia, Peru, Mexico here in Melbourne) and were always struggling with trying to get them back home for a reasonable price without transiting the US. LAN & Aerolineas are usually very expensive from here (particularly for oneways) so we’d often have them flying the ‘other’ way round (via KUL-JNB-SAO, DXB-SAO, or Europe) just because there was never any hope of them getting a transit visa for the US.

        To be honest, I’d say it’s a policy that holds back the success of US carriers, as getting a US visa is virtually impossible for a stack of Latin American or Asian citizens.

    2. I’d be interested as to how much this impacts carriers’s ability to attract connections versus Canada or another country. Its not as if we’re a great connecting point for any carrier on International-to-International, but I doubt we really gain that much security. You could argue we lose security because we’re having to push people through customs that’ll be in the country for a matter of hours. (Given that getting on an airplane going to another country is crossing the US’s functional border.)

      1. I’m sure it hurts US carriers. There is an entire wikitravel page dedicated to the topic of avoiding transiting through the U.S. But the bigger problem is that all U.S. airports are designed primarily for domestic flights, and they don’t have sterile areas for international connecting passengers. This basically makes sense, since even at JFK or LAX, the vast marjority of passengers are there either for domestic flights, or onward domestic connections following an international flight. So building up the appropriate infastructure for such sterile areas would be a pain, and not used all that much.

        1. Same thing in Russia. Youncan get a super cheap flight to Europe with a connection in Moscow, but you have to get a Russian Visa which is $$$… Even for a layover.

          1. Jared – Actually, you do not need a visa to transit in Russia. Here are the specific details for US citizens. I believe Europeans are the same.

            [Information For Normal Passports]
            TWOV (Transit Without Visa):
            Visa required, except for Holders of onward tickets for a max.
            transit [[TIRULES/R32]] time of 24 hours.
            – TWOV not applicable if transit is to/from Belarus.
            – There are no transit facilities available at Krasnodar
            (KRR). Passengers are required to clear Immigration and
            – If in transit to/from Belarus; or if the airport of arrival
            is different from the airport of departure within the same
            Russian city; or if transferring between Moscow Sheremetyevo
            (SVO) Terminals B/C and Terminals D/E/F, then a Russian
            (transit) visa is required.

  5. Copa has been marketing Panama as a great way to get to Asia and Europe without going into the U.S. which requires a visa even if you don’t leave the airport. But Copa is using the same reasoning as Emirates, Qatar, Etihad in creating new travel patterns as an option to the more expensive traditional hubs. Air Canada is doing the same, marketing itself as an alternative to U.S. hubs especially for those connecting to/from Europe and Asia. Again, no visa requirement. The range of its 737s makes it an idea partner for the growing communities of interest between Asia and South America. At least it provides fascinating possibilities!

    1. PTY-NRT would be way too far to be economically viable. NRT-LAX is 10 hours and LAX-PTY is 6 hours so I doubt a nonstop to Asia would work.

      Now regarding Europe, its great but right now not a lot of onward feed to Europe once you get to PTY. United prefers that everyone travel through IAH and South America is covered by Avianca or nonstops from Brazil to Star hubs at LIS/FRA/ZRH/IST.

      Copa is trying hard to get a Star partner serving PTY but we’ll see. It basically boils down to LH doing FRA-PTY cause that’s the only one with enough feed to work.

      It will be interesting to see if any West African carriers can get their acts together (e.g. Senegal, Morocco) and start hubbing people from the Americas eastward.

      1. At the moment, Copa’s only connection to Europe is via their code-share agreement with (non-Star Alliance member) KLM.

        FYI, the only other connections to Europe from PTY are Iberia (MAD) and Condor (FRA).

        Unless Copa adds a new type of aircraft to their fleet, their geographic reach will remain limited to the Americas – neither Asia nor Europe will figure in their plans.

        But that’s not necessarily a bad thing. They’ve hit on a money-making formula, so good for them. And of all the Latin American carriers I’ve flown, I give Copa the top marks in service.

  6. I had never heard of Copa’s marketing plan but it sounds great. I hope they don’t mess it up with willy-nilly growth that drains resources without making profits. They sound like they are doing well so far but the declining profit margin needs to be reversed within a few years if they are to continue to grow. American, TWA, Western, Eastern, PSA, etc. could have learned from Copa.

  7. I like reading about airlines that take a different tack, either with routing, in flight services, aircraft utilization or, that rare trait among airlines, profitability! Copa seems to be doing all of these, kudos to them!

  8. Cranky, Thanks for a very interesting and informative update. I am projecting a trip from LAX to Asuncion, Paraguay and COPA has the shortest, mort direct flights – bar none. Safety record is good, prices competitive. I really haven’t studied cabin service or comfort, etc. After reading your latest input I will definitely consider going COPA next time I return to South America!

  9. The stock is trading around $109 with a target price of $118/119, so there is still upside. Also, PE Ratio of 12 signifies an undervaluation compared to peers. Good Call.

  10. I fly Copa all the time from LAX through Panama to Colombia. It’s by far the best option from the west coast to Colombia (since Avianca no longer serves LAX). A super well run airline. Their business class product (50+” pitch, footrests, personal avod) is much better than what United offers, flying 37s and 57s with a domestic first class seat (i.e., limited recline, 38″ pitch).

  11. Won’t be a destination for Copa, as Panama City (their hub) is the only Panama airport they fly to, and they haven’t indicated any interest in flying anywhere else in the country.

    The only scheduled airline service at DAV is with Air Panama, which connects them to the Panama City (Albrook Airport), Bocas del Toro, and San Jose, Costa Rica.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Cranky Flier