Copa Airlines' Rebound May Depend on a Latin American Turnaround
Skift Take
Someday Latin American economies will boom again, and the region's airlines will be big investor favorites. But until then, investors may remain wary of companies like Panama's Copa Airlines.
When major Latin American economies turn around, Copa Airlines again likely will be a major beneficiary, capitalizing on its well-placed hub on the Isthmus of Panama to shuttle high-margin passengers between North and South America.
But for now, the airline's business is choppy, Copa executives warned investors earlier this month as they shared second quarter earnings. In addition to the challenges every airline faces, such as higher fuel prices, Copa has been dealing with operational challenges in Venezuela and currency devaluations in two key countries, Brazil and Argentina.
The hiccups made for a challenging quarter for Copa, which had been until earlier this year an investor favorite. While the airline remains profitable — it reported about $50 million in net income and 9 percent operating margin — investors have been spooked by weakness on key metrics. The airline's yield, a rough measure of revenue from ticket sales, decreased 2.2 percent, year-over-year.
The rest of the year might not be better. Last week, Copa altered its guidance for its full-year operating margin to 14-16 percent, down b
