UPDATE 2-Panama airline Copa, grounded due to pandemic, reports 98% drop in revenue

(Adds detail on Copa’s cash position)

By Marcelo Rochabrun

Aug 5 (Reuters) – Panama’s Copa Airlines on Wednesday reported that it earned almost no income between April and June, with revenue falling 98% as coronavirus-related measures virtually shuttered the Panama City airport that serves as its home base.

Panama’s tough anti-coronavirus measures, including a travel ban that will go at least through August, has also become a radical test of Copa’s resilience. In normal times, Copa is considered Latin America’s most financially successful airline, known for steady profits, low debt and a strong cash position.

But in the second quarter, Copa earned only $14 million in revenue but spent $400 million keeping the business running, it said in an earnings release. As a result, it swung to a $386 million net loss from a $50 million profit a year earlier.

Other publicly-traded airlines in Latin America have also had to cope with significant travel bans, but none saw their commercial operations come to a total halt for three months.

Copa said in a statement that its only revenue in the quarter came from “a small number of charters and humanitarian flights.”

Colombia’s Avianca Holdings and Chile’s LATAM Airlines Group both filed for bankruptcy protection in May, crushed by looming debt payments, while Copa has so far managed to hold on without significant restructuring.

Copa said it had total liquidity of $1.3 billion at the end of June, of which $308 million was in readily-available cash, and $741 million was short-term investments, plus it had a $150 million unused credit line.

Copa also benefited from a bond issuance that raised $343 million in cash during the quarter.

It hopes to restart flying on Sept. 4, although tentative restart dates have already been pushed back several times since the pandemic upended air travel in March. (Reporting by Marcelo Rochabrun in Sao Paulo; editing by David Gregorio and Rosalba O’Brien)

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