Copa Airlines Slows Growth To Argentina As Overcapacity Ensues

Panamanian flag carrier Copa Airlines plans to cap its growth to Argentina, citing oversupply in a market that has recently attracted a lot of capacity.

Concluding “Argentina has been booming” during the company’s third quarter earnings call, Copa CEO Pedro Heilbron said the devaluation of Argentina’s currency has been more predictable and the country’s inflation is “a lot more under control.”

A more liberalized approach adopted by Argentina’s government during the last couple years has also resulted in new open skies agreements forged with several countries.

All of those factors resulted in airlines adding significant levels of capacity to Argentina. Data gathered by Argentina’s government show the country’s international flights were up 19.3% year-over-year in September.

Noting Copa and other carriers have deployed a lot of supply into Argentina, Heilbron said, “when that happens, well, yields soften a little bit, but they’re still very strong.”

As a result, Copa is not growing as much in Argentina as it has in the last 12 months, Heilbron said. “And that’s probably going to be the case with most other airlines serving the country,” he noted.

Brazilian operator GOL also recently drew a similar conclusion regarding Argentina, with its executives explaining the carrier was adjusting capacity to the country in the third and fourth quarters and redeploying those aircraft back into Brazil’s domestic market.

Offering insight into Brazil, Heilbron said the country’s currency suddenly devalued last year and at the beginning of 2025, and at the same time a lot of capacity had come into the market. Now the Brazilian real has stabilized, and less capacity is being deployed to Brazil compared with the first half of last year.

“We’re seeing improvement in our Brazil load factors,” and in passenger unit revenues, Heilbron said. “It’s going in the right direction [but] not all the way back to where it was in 2023.”  

As Brazil stabilizes and Copa adjusts its capacity to Argentina, the company took delivery of five Boeing 737-8s during the September quarter and added a second 737-800 freighter under an operating lease. The company closed the quarter with 121 aircraft and subsequently took delivery of two additional 737-8s. The airline expects to add a single -8 by year-end.

Next year, Copa expects to add eight 737-8s to its fleet, two of which were expected in December of this year. The company plans 11-13% capacity growth in 2026.

Copa recorded a 6.8% increase in revenues year-over-year in the third quarter to $913 million, while expenses grew 2.9% to $701 million. The company’s third quarter net income was $173 million, up 18.7% year-over-year.