Copa Holdings—the parent of Panama City-based Copa Airlines, Bogota-based Copa Airlines Colombia and low-cost carrier Wingo—has agreed to sell up to six Embraer 190s from its fleet of 19 of the type to Fort Lauderdale-based lessor Azorra Aviation.
Five of the Embraer 190s will leave Copa’s fleet in 2019, “mainly in the first part of the year,” Copa Holdings CFO José Montero told financial analysts on Thursday during the company’s third-quarter earnings conference call. Copa Holdings signed a letter of intent to sell the aircraft to Azorra Aviation in October but had not announced the deal until now.
Copa Holdings CEO Pedro Heilbron said the decision to sell the Embraer 190s came following a review of demand expectations for 2019 at Copa Holdings’ three carriers. The review indicated that although the company expects to increase its capacity next year by only 3 percent—most of which would come at the “back end” of 2019, according to Montero—it would best achieve the planned growth by replacing some of its 100-seat Embraer 190s with Boeing 737-700s and/or 737-800s already in its fleet. Replacing the six Embraer 190s will give Copa Airlines an annual revenue benefit of more than $10 million, Heilbron said.
Heilbron said the seat-demand review also led to Copa Holdings deciding to replace the four Boeing 737-700s now in service with the company’s low-cost airline Wingo with four 737-800s now in the Copa Airlines fleet. Additionally, Copa Holdings plans next year to provide Wingo with a fifth 737-800 to allow network growth. Wingo “most likely” will base that aircraft at Panamá Pacífico International Airport, Panama’s secondary international airport, he said. Wingo already serves the airport, located near the town of Balboa across the Panama Canal from Panama City, as one of the 14 destinations in its eight-country network.
“Wingo continues to do better than expected, both operationally and financially,” said Heilbron. “Up-gauging from the -700 to the -800 will make its unit costs more effective” and also potentially will make Wingo more profitable, he added. Wingo began commercial services on Decc 1, 2016.
In the first half of this year Copa Holdings returned one Embraer 190 to its lessor and the company received the last two of 68 Boeing 737-800s it had ordered or leased. In August Copa Holdings received the first of an unspecified number of Boeing 737 Max 9s on order—it ordered 68 737 Max jets in 2015 but didn’t quantify publicly the mix of Max 8s and Max 9s—and subsequently has received two more, one in October and one in November. It expects to receive two more 737 Max 9s this year and a further eight next year.