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Copa Holdings, the parent of Panama’s Copa Airlines reported a profit of $122m, up more than one-third from the same quarter in pre-pandemic 2019, driven by “healthy demand”. The Panama City-headquartered carrier said on 10 May that total revenue during the first three months of the year was $867m, up 29% from the $672m reported in Q1 2019. “Copa Holdings delivered solid financial results for the first quarter of 2023,” the company says. “The company’s results were driven by a healthy demand environment in the region, which led to strong unit revenues in the quarter, and by its consistent cost execution strategy.” But while revenue rose, the airline’s expenses also increased by 20.5% to $674m. Of that, jet fuel totalled $266m, up 56% compared to the same period in 2019, due to a 61.4% higher effective fuel price, and partially offset by 3.7% fewer gallons consumed. Capacity as measured in available seat miles (ASMs) rose 2.8% to 6.6b, from 6.4b in Q1 2019, while load factor rose to 86.8%, up 3.5 percentage points over the same period in 2019. Copa took delivery of two Boeing 737 Max 9 aircraft during the first three months of the year, ending the period with 99 aircraft: 67 Boeing 737-800s, 22 737 Max 9s, nine 737-700s, and one 737-800 freighter, compared to a fleet of 102 aircraft prior to the global Covid-19 pandemic. Copa will hold an analyst call on 11 May to give more details about its first-quarter earnings results.<br/>

Colombian carrier Avianca could decide this week whether to continue pursuing its planned acquisition of low-cost domestic competitor Viva Air, which stopped flying in February due to financial difficulties. Avianca has been trying to acquire Viva for the past year, but several decisions by Colombia’s Directorate of Air Transport and Aero-Commercial Affairs – known as Aerocivil – have stymied the process. Aerocivil’s latest approval, on 25 April, reiterated a preliminary decision from March that set conditions Avianca has called “unfeasible”. Now, Avianca executives say they will decide imminently whether to continue with the acquisition. “We will make a decision by the end of the week,” Avianca CE Adrian Neuhauser says on 10 May during the airline’s first-quarter earnings call. Avianca is “not pleased” with what the authorities have presented. He adds that Viva is in a substantially different position than it was when Avianca first expressed interest in it. “The company we would integrate is not the company we were looking to” acquire, he says. Strings attached by Aerocivil include refunding customers who had bought tickets on cancelled Viva flights, and allowing those who have tickets pending to fly. The carrier must also return some take-off and landing slots at Bogota and maintain Viva’s low-cost options. Such conditions prevent “a realistic transaction for the integration and rescue of Viva”, Avianca said last month. The process to combine the two companies began in April 2022, when owners of Avianca and Viva struck a deal to form a joint holding company, saying such an arrangement would improve the carriers’ financial stability following the Covid-19 industry crisis. They planned for Viva’s Peruvian and Colombian operations to remain independent. Four months later, Avianca requested accelerated approval by Colombia’s civil aviation regulator, citing concern about Viva’s ability to compete in the face of increased financial pressure.<br/>

Colombian carrier Avianca continued its business transformation during Q1 2023, with its revenue jumping 13.5% year-on-year. The Bogota-based airline generated $1.09b in Q1 revenue, up from $811m in the same quarter of 2022, it says on 10 May. Still, Avianca lost $11.8m during the period, improved from its $76m loss in the same three months last year. “We are very proud of the quarter we have delivered, and the transformation that we have executed in a short period of time with all the challenges of a shifting market, supply chain issues, inflation, oil [price] spikes and currency devaluation… We hope to continue delivering against [the] business plan,” CE Adrian Neuhauser says during the company’s quarterly earnings call. The airline’s revenue from carrying passengers rose to $630m in Q1, up from $426m last year. Cargo revenue came to $165m, about 35% more than the company aimed but still down 7% year-on-year. Avianca transported 6.8m passengers during the three months ending on 31 March, at a load factor of just more than 80%. The carrier is now operating 132 routes – up from 124 during the final months of 2019, prior to the pandemic – including two it introduced in the first quarter. Fifty-seven of its routes are point-to-point, up from 43 previously, and the airline plans to introduce 10 routes this quarter. “One of the approaches we have taken is to run numbers [and to] test things. If they work, [the routes] stay. If they don’t work, we pull them out quickly,” says Neuhauser. “Do not assume that just because we are adding 10 new routes that they will stick around.” Aviana’s flights to North America and Europe continue to perform well, while flights to northern South America and to Central America are performing “reasonably well, better than we had projected”, he adds. “We are seeing more weakness is South America-Caribbean” flights. <br/>

Canada's two biggest airlines scored below average for customer satisfaction for economy class service among major North American carriers, according to a new survey. WestJet notched a customer satisfaction figure of 777 on a 1,000-point scale, edging out Air Canada which scored 765. However, both were below the average economy class score of 782 in a poll by J.D. Power. Pricier fares, crowded planes and fewer flight options were behind the frustration -- but demand remains strong nonetheless -- said Michael Taylor, managing director of travel, hospitality and retail at the consumer analytics company. As a result, carriers yielded higher revenues this year after a prolonged industry slump prompted by the pandemic, he said. Many are running at "peak efficiency," though higher labour and fuel costs compared with 2019 have hampered profit margins. North America is not exempt from a global pilot shortage, which partly explains why fewer planes ply the skies compared with four years ago. "They're more full -- they have a higher load factor -- and that usually decreases satisfaction," Taylor said. Some airlines have ditched smaller planes, trying to pack in as many passengers as possible per flight. Meanwhile, the surge in leisure travel after two years under border restrictions and COVID-19 health concerns has pushed prices north. While a spate of upstart airlines has made domestic air travel cheaper than ever overall in Canada -- particularly in the busiest corridors -- passengers face higher prices and scarcer trip options in many regions and on international routes, according to figures from aviation data firm Cirium. "You want to fly to, say, Winnipeg, it might be a little more expensive, because it's not the most popular destination versus, say, getting to Toronto," Taylor said.<br/>

A European Union court toppled Germany’s massive bailout of Deutsche Lufthansa AG at the height of the Covid-19 pandemic, backing Ryanair Holdings Plc’s claims that the package unfairly tilted competition toward its rival. Terms of a E6b recapitalization approved by the European Commission were too favorable to Lufthansa, and demands that Europe’s biggest network carrier forfeit take-off and landing rights in Frankfurt and Munich were structured in a way that didn’t provide a realistic chance for competition, the court ruled. The decision casts a shadow over Lufthansa’s post-pandemic recovery, potentially forcing the commission to make retroactive adjustments to the airline’s bailout package. The measures could be fairly limited, given Lufthansa has already paid back the aid. But if the commission establishes that the company unfairly benefited, it could impose financial penalties or ask it to divest more slots in Germany — where Ryanair CEO Michael O’Leary claims Lufthansa enjoys a “quasi-monopoly.” The court also sided with Ryanair on a challenge to state aid to Sweden’s SAS AB. The Irish discount carrier has a similar case pending over the bailout of Air France-KLM. The Brussels-based commission said it will “carefully study the judgment and reflect on possible next steps.” Wednesday’s judgment can be appealed. The commission allowed deep-pocketed national governments to weigh in too strongly on the side of ailing flag-carrier airlines, Ryanair said. “Today’s judgments confirm that the commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory state aid under political pressure by national governments,” the airline said. In annulling the commission’s decision to approve the aid package, the EU General Court in Luxembourg on Wednesday said the commission’s assessment included “several errors” and that it was wrong to consider that Lufthansa “was unable to obtain financing on the markets for the entirety of its needs.” CEO Carsten Spohr has pointed out that German taxpayers made a profit when the government sold its 20% stake that came with the bailout. “Lufthansa will analyze the ruling and then decide on further action,” the company said. <br/>

Singapore Airlines (SIA) is redeeming half of its mandatory convertible bonds (MCBs) that were issued in June 2021. This comes barely six months after the airline group announced the full redemption of its 2020 MCBs. These bonds were issued to support the company’s balance sheet amid an almost total shutdown of air travel during the pandemic. The latest redemption will see SIA meet the accreted principal amount payable of 108.243% of the principal amount of the MCBs, which will be approximately $3.4b. SIA said this redemption will be carried out on a pro-rata basis, with the redemption amount to be paid to eligible bond holders on June 26.“This will be fully funded by the SIA Group’s existing cash reserves, which stood at $15.4b as at Dec 31, 2022,” the company said on Wednesday. Following the post-pandemic reopening, the airline has seen a strong pickup in air travel, which has boosted its liquidity position and strengthened its balance sheet. The company said the latest 50% partial redemption of the second tranche of MCBs was part of its post-pandemic review of its long-term liquidity strategy and ongoing recalibration of its balance sheet, as it progressively brings its liquidity down to “business-as-usual level”. “In addition, the full redemption of the 2020 MCBs and partial redemption of the 2021 MCBs will reduce the risk of potential dilution of shareholders,” it added.<br/>

Air New Zealand customers will soon be able to track the location of their baggage using the airline’s app. The new feature, which has just completed a pilot with domestic travellers, will allow customers to see the last-recorded status of their bags, from check in, to being loaded onto the plane, to arrival at the destination. The feature is being gradually rolled out to customers, starting with 25% of Air New Zealand app users travelling domestically, and 5% of app users travelling on a short-haul international flight. It is expected to be available to all app users by the middle of the year. Air New Zealand chief digital officer Nikhil Ravishankar said customers could track the journey of their bag and receive guidance on what to do if it had “taken a detour”. Eventually, customers would also be able to report and monitor mishandled baggage via the app. “Baggage tracking puts information directly in the hands of our customers, streamlining processes, relieving pressure on our teams, and giving passengers peace of mind that their luggage is on the journey with them.” Mishandled baggage was a major issue over the peak summer travel period, with hundreds of lost and unclaimed bags piling up at Auckland Airport. Ravishankar said Air NZ had also worked with the Ministry of Primary Industries Biosecurity Team to avoid this kind of backlog in the future, by developing a new digital for its Baggage Tracing Unit to expedite clearance processes and remove the requirement to use paper receipts. “Since the challenges earlier this year, the introduction of digital tools has meant we have cleared the baggage backlog and we are now better prepared to deal with any future disruptions that may occur.”<br/>