The expansion of Panama’s Tocumen International Airport is giving flagship carrier Copa Airlines good reason to pursue its growth strategy.
Pedro Heilbron, CEO of Panama-based, publicly listed Copa Airlines, says: “The Terminal 2 expansion is key for Copa’s future, enabling medium-term growth in accordance with our plans, and immediately improving our passengers’ experience of connecting through the 'hub of the Americas' in Panama.”
An Americas hub
Panama has frequently capitalised on its geography to drive development and business opportunities. In the 19th century, its isthmus caught the eye of foreign powers that were keen to build an interoceanic canal. The US eventually pulled it off (though not without hiccups), and retained the management of the Panama Canal until the late 20th century. More recently, policymakers and businesses have re-envisaged the country’s position at the heart of Latin America into an airport hub that connects the whole continent.
While Panama has a domestic population of just over 4 million, Tocumen airport handled a record 16.5 million passengers in 2019 (most of them transit passengers), from just over 7 million a decade earlier, according to official figures. Authorities now expect to bring passenger traffic to 25 million passengers a year with the new Terminal 2 opening in 2020, strengthening Tocumen’s position as one of Latin America’s 10 busiest airports.
In Tocumen, Copa Airlines (which is responsible for more than 80% of passenger traffic) enjoys a growing base from which to unlock the potential of its network of air connections. These are focused on underserved markets in the region – 81% have fewer than 20 passengers per day.
A focused model
“We are a company focused on its business mode, which seeks to further consolidate the 'hub of the Americas' at Tocumen International Airport as the best intra-America connection centre in the region, with more international flights. We still see many opportunities to continue adding underserved markets and bringing world-class connectivity and economic development opportunities to our region. Operating long-haul flights to Europe or Asia is not in our future plans,” says Mr Heilbron.
The company expects traffic within Latin America to grow by 6% a year in the next 20 years, against a world average of 4.6% a year, which has prompted the company to establish an ambitious $1.01bn investment plan for 2020, its biggest investment campaign of the past four years.
“The capital expenditure increase is directly related to our fleet plan, as we have a significant aircraft order with more than 65 deliveries planned for the next five years. Some of the aircraft will be used for growth, while others will be replacements for the expiring leases of older aircraft in the fleet,” says Mr Heilbron.
Copa has also beefed up its local services and maintenance operations, with a new hangar to accommodate its growing fleet. The airport’s brand new Terminal 2 is now ready to service the airline’s ambitions, strengthening Panama’s place at the heart of the Americas' airline connections.