Historical Stock Chart
5 Years : From Dec 2012 to Dec 2017
The head of Copa Airlines said Thursday that its entry to the Star alliance had been delayed by up to two months, though he forecast minimal financial impact as the three global airline marketing groups jostle for position in Latin America.
Copa was due to join in late April but already derives most of its alliance benefits from an existing partnership with United Continental Holdings Inc. (UAL), with further gains expected from linking its frequent-flier program with other Star members.
The airline 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 will be a useful addition to the Star pact led by United and Deutsche Lufthansa AG (LHA.XE).
Pedro Heilbron, chief executive of Copa Holdings SA (CPA), said on a postearnings call that it expected to join Star "very soon" after the delay of "one or two months." AviancaTaca Holding SA (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 11.3% at $85.97, and reached an all-time high of $86.50 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 (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 SA (GOL).
Copa was formerly a member of SkyTeam, but left after former parent Continental Airlines joined Star following its merger with United.
The airline late Wednesday reported an expectation-beating profit of $95.9 million compared with $94.4 million a year earlier, with per-share earnings rising two cents to $2.16. It also boosted capacity guidance by a percentage point and expects to grow by 23% this year.
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; email@example.com