Boeing MAX fallout sends Copa shares plunging 23.1%
After a year when Copa Holdings profits jumped 21% the fallout from the grounding of its MAX fleet, from Boeing since January 21, the price of its shares has fallen 23.1% on Wall Street and on Friday, closed at $ 82.48.
The market is concerned about the impact this year will have on the global paralysis, on the company’s results.
La prensa reports that In a phone call with stock analysts, Pedro Heilbron, executive director of Copa Holdings, said that, as a result of the suspension of the MAX aircraft, the company reduced its projection of capacity growth from 5% to 1% for this year.
The company has six MAX9 planes on the ground and last year it had to receive another 7 aircraft.
Heilbron said the company withdrew MAX aircraft from its programming until August but accepts that it is unclear when Boeing will receive regulatory approval to put its planes into operation.
Given this scenario, the airline group, which generated revenue of $2,707 billion last year, made the decision to delay the departure of its Embraer aircraft that would be replaced by MAX models.
The arrival of the MAX family is part of a contract that Copa signed in 2015 with Boeing, for more than 6,600 million dollars.
Heilbron said that once the suspension was lifted on the MAX models, which were involved in two accidents that ended the life of 300 people, it would take the airline between 2 and 3 weeks to put them into operation again.
“It seems that the MAX will not fly until the second half of 2020, and Boeing will not be able to deliver the amount of aircraft we expected this year. That being the case, we have reduced our capacity growth by 2020.” and we will have to curb Embraer’s transition with most of the planes that now depart in 2021.” said Heilbron.
Avianca deal
During the conference call, market analysts asked about the joint business agreement (JBA) that they announced in 2018 that Copa Airlines w would sign ith Avianca and United, Heilbron said the plan remains in force, but confirmed that The documents have not yet been submitted to market regulators for approval.
“The JBA is still there, and I think the three airlines, United, Avianca and Copa, are still very interested in presenting the JBA. So, the intention is still to present it at some time this year. But everything that has happened between the new administration of Avianca and United has delayed the presentation of the documentation, but it should happen sometime this year. When? I’m not sure right now, ”said Heilbron
