Panama's Copa Airlines said yesterday that it might not have sufficient liquidity to survive the COVID-19 crisis despite cutting costs. This has become the second major airline in Latin America to suggest, it may stop to exist because of the pandemic.

In a statement it released, Copa said, "Even after giving impact to our cost-cutting efforts," they may not have adequate liquidity for their business to operate. In the said statement, it was noted as well, that under a conservative approximation, it could burn through nearly 70 percent of its cash available by the end of the year.

Moreover, Copa also said it has about 1.3 billion in cash, although it expects to run through over $750 million in the next couple of months ahead. The company elaborated that it is probable that Copa's cash burn per month could be considerably higher than the levels they presently expect.


Seeking to Sell Over $300 Million in 5-Year Bonds

Copa also said yesterday, that it sought to sell roughly "$350 million in 5-year bonds" convertible to equity. The airline company also added, shares in Copa, which is unlikely of its worldwide associates, has yet to pursue a taxpayer bailout. Essentially, Copa said, they were falling over 12 percent in New York.

Avianca Holdings of Colombia said last week that its auditors had already expressed considerable doubt over the ability of the carrier to exist one year from now, becoming the first airline company in the region "whose future" was said to be doubtful. 

Both Copa and Avianca are two companies that have been hit harder than the rest of the airlines in Latin America by this pandemic. Relatively, they are forced to cancel the totality of their passenger flights since late last month. 

However, while the latter-mentioned airline company ardently hopes to reopen and start its flights again in May, Copa admitted, it may not be able to do so or follow suit, at least in early June. More so, the company said it is currently applying emergency measures to save money.


Copa as the Most Financially-Solid Airline Company in Latin America

For a while, analysts have considered Copa as the most financially solid of all Latin American airlines since its dependence on the Panama City airport "for virtually all of its flights is representing a major cost-efficiency." 

And, from there, Copa links the travelers with the Americas aboard narrow-body planes and does not have flights to Europe. Nevertheless, that particular strength has now turned into a flaw as Panama has closed down the airport, leaving the company without the routes to stay flying.

Copa announced "a 30-day extension of the suspension of all the international flights in the country" because of the COVID-19 crisis. It expires on May 22 this year, and the company hopes to reopen on June 1, 2020.

The reopening will be made possible once the approvals which the corresponding authorities in other nations in the region required have been received. More so, from May 23 to 31, Copa is expecting to be able to improve the numbers in terms of humanitarian flights to transport more travelers back to their homes.


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