Mixed reviews for local planes

The report pointed out that the airline sector in the country increased by over 23 percent during 2008, in relation to 2007.

However, according to the Investors Relations director of COPA airlines, Joseph Putaturo this year Panama will start feeling the effects of the global financial crisis and it is possible that it will experience a decrease in income from tickets of about six percent, due to a lower occupancy number and the average price of the ticket. Last year was favorable for the company with more passengers than in 2007.

“Obviously, among the major factors that will affect the behavior of the tariff are the demand and the price of fuel, ” said Putaturo.

He added that currently it is difficult to see how the slowdown of the Latin American economies will affect COPA, because it flies to 45 different destinations in the American continent, with a fleet of 42 airplanes.

On the other hand, the general manager of the domestic airline, Air Panama, Eduardo Stagg said that the demand for internal flights increased by five percent in 2008 in comparison with 2007.

Last year, Air Panama transported 165,000 passengers, the majority of them to destinations in Chiriqui and Bocas del Toro.

Stagg believes that the country has not yet felt the full impact of the world financial crisis, but during 2008 there was a small dip in the market demand, which diminished by 10 percent, especially in the second part of 2008.

Air Panama has a fleet of nine aircraft and is planning to add another two planes this year, which shows a healthy growth pattern for the internal flights airline created five years ago.

In the case of the airlines with internal routes, they do not compete with prices because there are regulated by the Civil Aviation Authority, but by the service they offer, said Stagg.

On the future of the industry in 2009, Stagg said that he foresees that the demand will be strong because Panama is going through good economic times. It is important to point out that 60 percent of Air Panama customers are Panamanians, while the other 40 percent are tourists.

Until the actual high season for tourism starts the internal airline sector will not be able to predict if 2009 is going to be a favorable year for the industry or a bad one with fewer visitors, mounting debts and lower income. All will depend on how the global economy will behave in the next six months.