News Release
Continental Airlines Acquires Stake in Panamanian Carrier COPA
HOUSTON, May 12, 1998 -- Continental Airlines (NYSE: CAI.B and CAI.A) announced today that it has acquired a minority ownership stake in the parent holding company of Compania Panamena de Aviacion, S.A. (COPA) and related companies, and will, subject to certain conditions, enter into a comprehensive operating and marketing alliance with COPA.
After entering into its alliance with COPA and subject to government approval, Continental will codeshare on COPA's daily flights between Miami and COPA's hub in Panama City, and to Latin American destinations beyond Panama City. COPA will codeshare on Continental's daily flights between Panama City and both Houston and Newark/New York, and to numerous U.S. destinations afforded by Continental's extensive hub complexes in those cities. Travelers will be able to check-in at their point of origin through to their final destination, earn and redeem frequent flyer miles on either carrier, and utilize either airline's private airport lounges. The carriers also intend to engage in a broad array of joint marketing activities involving a significantly expanded COPA route network.
"Panama's ideal geography, thriving economy, modern Panama City airport facility and progressive 'open skies' aviation agreement with the United States make it a strategic gateway for travel between the United States and Latin America, and within Latin America," said Gordon Bethune, chairman and chief executive officer of Continental Airlines. "Working together with COPA, we don't anticipate any employee displacements resulting from this alliance."
"COPA's record of excellent customer service and strong, profitable growth is impressive, and we are excited to work with COPA's excellent management team," said Greg Brenneman, Continental's president and chief operating officer. "This investment and subsequent alliance will give Continental the opportunity to further extend its product and brand into Latin America, while preserving the distinct and attractive service COPA delivers to its customers."
"We are excited about the tremendous opportunities offered by an alliance with Continental Airlines", said Pedro Heilbron, executive president of COPA. "We expect COPA's growth and improvement in customer service to further accelerate. Continental Airlines is the perfect partner to help us strengthen and expand our already successful hub in Panama City and together we will work to deliver a great product to our customers."
"We sought to extend our profitability participation and brand identity more extensively into Latin America," said David Grizzle, senior vice president for Continental. "The strong potential to build on an already solid operation in the region made COPA the ideal strategic partner for Continental."
In entering into their agreement, Continental and COPA are relying on the Department of Transportation's tentative decision to at least eliminate the provision in the American Airlines' alliance agreement with the TACA Group (which includes COPA) precluding COPA from entering into cooperative marketing arrangements with other carriers.
COPA serves 24 destinations in 18 countries in North, Central and South America, and the Caribbean. From its base at Tocumen International Airport in Panama City, COPA operates one of the most efficient and successful hubs in Latin America. During 1997, COPA achieved high levels of customer satisfaction including an on-time performance of 88 percent.
Continental is the fifth largest airline in the U.S., offering more than 2,000 departures daily to 122 domestic and 70 international destinations. Operating major hubs in Newark, Houston, Cleveland and Guam, Continental is strategically positioned for transcontinental travel, and offers extensive service to Latin America and Europe via its Houston and Newark gateways. Continental is the second largest U.S. carrier to Latin America serving 36 destinations in 18 countries in Mexico, Central and South America and the Caribbean. Latin America is the fastest growing region in Continental's system with nearly a 40 percent increase in capacity from the U.S in 1997.