Copa Airlines demands compensation from Boeing over MAX 9 groundings

Copa Airlines expects to see compensation from Boeing over the January grounding of its 737 MAX 9s and anticipated delivery delays, airline executives confirmed in a fourth-quarter earnings call, with around 20% of the airline’s daily flights cancelled in January as a result of the FAA’s emergency airworthiness directive. Although the airline’s passenger traffic was up 11.1% in the fourth quarter of 2023 (with a load factor rising marginally to 86.7%), the grounding of 21 MAX 9s – impacting operations from January 6 to 29 – marked a “significant lost opportunity”. While CEO Pedro Heilbron noted that Boeing “continues to be an important partner to Copa,” the airline does hold the manufacturer responsible and expects to be “full and fairly compensated” pending negotiations with Boeing. The scale or scope of compensation expected was not specified. Copa ended Q4 2023 with assets worth $5.2bn, added CFO Jose Montero, including three MAX 9s delivered during the final fiscal quarter; bringing the airline’s total number of the type operated to 29. However, although Copa has 11 aircraft on order in 2024 (comprising of three MAX 9s and eight MAX 10s, with financing in place for nine of these), anticipated upcoming delivery delays will reduce the carrier’s  growth by an estimated 10%. Heilbron added that Copa’s business model remains “as solid and relevant as ever”, with healthy demand in the region contributing to a net profit of $518.2 million for the full year 2023. Excluding special items (comprised of a net loss related to the company’s convertible notes as well as changes in the value of financial investments), Copa would have reported an adjusted net profit of $675.1 million. Copa’s operating profit for 2023 was $811.8 million with an operating margin of 23.5%. In January, Copa Airlines was recognised by Cirium for the ninth time as the most on-time airline in Latin America in 2023, with an on-time performance of 89.5% the highest of any carrier in the Americas. It grew its network by four additional destinations last year with low-cost subsidiary Wingo augmenting its services by six new domestic and two new international routes. However, the airline noted that further plans to expand Wingo’s fleet would be tempered by anticipated delivery delays.