Copa Looks Like One Of The Emerging Market Airline Survivors

This is unprecedented territory for airlines. While recessions, war, and natural disasters have led to airlines grounding some or all of their fleets for relatively brief periods of time, nothing like Covid-19 has been seen in living memory on a global scale. Copa Holdings (NYSE:CPA) has grounded its entire fleet, and it's hard to say what demand will look like for the remainder of 2020, but Copa has the wherewithal to survive this and emerge on the other side still capable of generating attractive, long-term results.

Obviously, there is tremendous uncertainty when it comes to modeling Copa now. Following management's guidance for capacity additions in 2020 is a good starting point, but nobody really knows what the virus will do, what global infection rates will be like, what governments will do in response, and how quickly people will be willing and able to resume air travel. Although I believe humans are very resilient and global travel will get back to normal in a few years, there's a great deal of uncertainty in the interim, and Copa has to survive that before the long-term health of the global air travel market is even a relevant driver.

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Copa Looks Like One Of The Emerging Market Airline Survivors