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

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(Adds details on Copa’s cash position)

Aug 5 (Reuters) – Panamanian carrier Copa Airlines said on Wednesday it earned almost no revenue between April and June, with revenue down 98% as coronavirus-related measures virtually shut down the airline. Panama City airport which serves as its home port.

Panama’s tough anti-coronavirus measures, including a travel ban that will last until at least August, have also become a stark test of Copa’s resilience. In normal times, Copa is considered the most successful airline in Latin America, known for its stable profits, low debt and strong cash flow.

But in the second quarter, Copa only made $14 million in revenue but spent $400 million to keep the business running, it said in an earnings statement. As a result, it went to a net loss of $386 million from a profit of $50 million a year earlier.

Other publicly listed airlines in Latin America have also faced significant travel bans, but none saw 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 charter and humanitarian flights”.

Colombia’s Avianca Holdings and Chile’s LATAM Airlines Group both filed for bankruptcy protection in May, crushed by impending 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, including $308 million in readily available cash and $741 million in short-term investments, in addition to an unused line of credit of $150 million.

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

It hopes to resume flights on September 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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