Copa Airlines Admits to Be Cash-Strapped, Unable to Keep Operations Running

Copa Airlines said on Monday it may not have enough liquidity to survive the coronavirus crisis despite cutting costs, becoming the second major Latin American airline to suggest that it may cease to exist due to the outbreak.

According to Yahoo! Finance, Copa has allegedly $1.13 billion in cash but expects to run through more than $750 million in the next nine months.

Copa also said on Monday it was seeking to sell $350 million in 5-year bonds that can be converted to equity.

Shares in Copa, which unlike many of its global cohorts has yet to seek a taxpayer bailout, were falling more than 12% in New York.

Colombia's Avianca Holdings said last week that its auditors expressed "substantial doubt" over the carrier's ability to exist a year from now, becoming the first airline in the region whose future was put in doubt.

Copa and Avianca have been hit harder than most Latin American airlines by the crisis, which forced both to cancel the entirety of their passenger flights since late March. But while Avianca hopes to restart flights in May, Copa says it may not be able to do so until at least June 1 and is applying emergency measures to save cash.

Copa has long been considered by analysts as the most financially solid of Latin America's airlines, because its reliance on the Panama City airport for virtually all of its flights represents a big cost efficiency. From there, Copa connects travelers only to the Americas on narrowbody planes and has no flights to Europe.

But that strength has now become a weakness as Panama has shut down the airport, leaving Copa with no routes to keep flying, the report on Yahoo! Finance concludes.