Copa Air On Track For Star Alliance Entry, Stock Up After 1Q
May 10 2012 - 12:28PM
Dow Jones News
The head of Copa Airlines said Thursday that it still expected
to join the Star global marketing pact "soon," despite a delay that
comes amid jostling for position in Latin America by the three
alliances that dominate the industry.
Copa has turned its Panama hub into a profitable fortress
linking cities in North, South and Central America that had no
connections a decade ago, and a useful addition to the Star pact
led by United Continental Holdings Inc. (UAL) and Deutsche
Lufthansa AG (LHA.XE).
Pedro Heilbron, chief executive of Copa Holdings SA (CPA), said
on a post-earnings' call that it had been due to join Star last
month, but indicated the move would take place soon after a delay
for unspecified reasons. AviancaTaca Holding S.A. (PFAVTA.BO),
formed by the merger of carriers in Colombia and El Salvador, is
also due to join Star shortly.
Copa shares soared following a rise in first-quarter profit, and
were recently up 8.8% at $84.03, just shy of an all-time high
reached earlier in the session.
Star's expansion in Latin America comes as the industry awaits
the final outcome of deliberations between LAN Airlines SA (LFL,
LAN.SN) and merger partner TAM S/A's (TAM, TAMM4.BR) over which
alliance they will join.
Chile's Lan is a member of the Oneworld alliance led by American
Airlines and British Airways, and the enlarged carrier is widely
expected by analysts to drop Tam's existing membership of Star.
The third global alliance, SkyTeam, includes Aerolineas
Argentinas and Grupo Aeromexico S.A.B. de C.V. (AEROMEX.MX) in its
ranks, while founder Delta Air Lines Inc. (DAL) this year added a
minority stake in Brazil's GOL Linhas Aereas Inteligentes S.A.
(GOL).
Copa was formerly a member of SkyTeam, but left after former
parent Continental Airlines joined Star following its merger with
United.
The airline reported a profit of $95.9 million compared with
$94.4 million a year earlier, with per-share earnings rising two
cents to $2.16.
Heilbron also said that Copa hadn't seen any reduction in demand
from Brazil despite the strength of the real, and though it raised
revenue guidance for the year, this wasn't because of any expected
reduction in capacity by American, a unit of AMR Corp. (AAMRQ).
--By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
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