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Topic: Would United Ever Take 100% Of Copa?
Username: VC10er
Posted 2013-07-20 05:22:09 and read 6745 times.

I have recently wondered why United (or ex Continental) wouldn't want to buy and fold Copa into the main United brand? Are there foreign ownership laws? Different cost structures that would be too difficult to integrate? Union of pilot contract issues?

United is already such a behemoth mega airline, imagine how much bigger they would be if the absorbed Copa! (Im not suggesting that United getting bigger is a good thing) BUT, they already walk, talk, look and fly as if they are United already.

Curious?

Topic: RE: Would United Ever Take 100% Of Copa?
Username: ORDBOSEWR
Posted 2013-07-20 06:07:35 and read 6618 times.

First thing is I don't see the benefits for UA?

I mean as a UA FF you get treated like you are flying on UA (ie FF accrual, million miler, upgrades, etc) but you aren't.

What would corporate UA get?

It would be another unique market that is outside of their home market.
I can't speak to the ownership laws of Panama, but they would likely not want it to become a US carrier since it would then affect the bi-laterals that are impacted by them.
Not to mention all of the contracts and that those may not be good to be under the new UA contracts. That would be a real challenge.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: mcoatc
Posted 2013-07-20 07:57:29 and read 6343 times.

Quoting VC10er (Thread starter):
BUT, they already walk, talk, look and fly as if they are United already.

No offense to anyone, but Copa is none of those things in relation to United. Copa pilots often barely speak english and their flying is often sloppy....wrong headings, ugly visual approaches, and lining up for the wrong runway. They read back a correct heading and then do something else entirely. I know this because I see them 4 times a day and everyone has to watch them closer because of past occurrences.

Flight crews have started to get much better in the last year, as they have really stressed improvement internally and it is showing. I believe Copa is also recruiting more qualified candidates. Having said that, United they are not.

Quoting VC10er (Thread starter):
I have recently wondered why United (or ex Continental) wouldn't want to buy and fold Copa into the main United brand?

United, but actually Continental before the merger, has continually decreased its share of Copa, rather than the increased ownership that you suggest. While CO used to be a 51% shareholder, a 2008 SEC filing showed no ownership at all. While the branding is similar and there are still ties through Star and FF programs, I believe that is the only tie between them.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: SHAQ
Posted 2013-07-20 08:10:46 and read 6306 times.

Quoting mcoatc (Reply 2):
Copa pilots often barely speak english and their flying is often sloppy....wrong headings, ugly visual approaches, and lining up for the wrong runway.

Are you suggesting that COPA is an unsafe airline?

Topic: RE: Would United Ever Take 100% Of Copa?
Username: jcarv
Posted 2013-07-20 08:24:58 and read 6260 times.

Does UAL only codeshare with Copa on flights to UAL hubs? Curious as to why the UA-code isn't on the new BOS-PTY flight. It can't hurt anything. Can only benefit I would think.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: MasseyBrown
Posted 2013-07-20 08:42:19 and read 6200 times.

At one point, CO owned 49% of Copa and they chose to sell the stake. I'm not sure how pressured they were by post 9/11 financial difficulties; but, presumably, they ran the numbers and decided that an investment in CO was more valuable than an investment in Copa.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: davidho1985
Posted 2013-07-20 08:53:11 and read 6155 times.

Why spending money to do so?
Basically Copa is already under UA's control, acquiring additional shares (assume allowed by the law) will not bring much benefit to UA, Those capital can be used elsewhere which will bring more benefit to UA and their shareholders.

Really no point for UA to have 100% / additional ownership

Topic: RE: Would United Ever Take 100% Of Copa?
Username: mcoatc
Posted 2013-07-20 09:59:53 and read 5997 times.

Quoting SHAQ (Reply 3):
Are you suggesting that COPA is an unsafe airline?

Although I shouldn't take the bait on this, and it is off topic, I did not say that. If that's what you can infer from my comments, so be it. Different people have different criteria for what they deem as unsafe.

My point is that Copa does not talk and fly the same as UA. UA and CO have an exemplary safety record and veteran pilots, with a training system that is on par with the top airlines in the world.

Copa, although it has been around for years, has experienced massive growth in recent years and due to that, has experienced "growing pains". Trying to source crew for a rapidly growing carrier seems to have proven challenging, and Copa has admitted as much. They met with staff here after a number of "incidents" that required communication.

As I mentioned, improvement has been seen and they seem to be getting better every month. I did not say I wasn't going to step on a Copa jet. What I am saying is that sitting in a control tower, it's very easy to see the major differences in the carriers we are discussing. I know people hired at CM and I know what their requirements are. My intent isn't to offend anyone, just to state that the facts.

Quoting davidho1985 (Reply 6):
Basically Copa is already under UA's control, acquiring additional shares (assume allowed by the law) will not bring much benefit to UA

CM is not under UA's control as UA has no ownership in Copa, just a very cozy relationship.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: VC10er
Posted 2013-07-20 11:59:14 and read 5807 times.

For clarification, what I really meant is that between the livery and even interiors, 737's etc to a novice like ME the do LOOK like a strange subbrand of CO, now UA. The "fly" part was meant to be more of a joke.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: oneskyjet
Posted 2013-07-20 12:08:41 and read 5772 times.

They couldnt afford it. COPA's market cap is over $6 billion, more than half of UA's value on an airline 1/8th its size.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: einsteinboricua
Posted 2013-07-20 12:37:41 and read 5663 times.

Quoting mcoatc (Reply 2):
Quoting VC10er (Thread starter):
I have recently wondered why United (or ex Continental) wouldn't want to buy and fold Copa into the main United brand?

United, but actually Continental before the merger, has continually decreased its share of Copa, rather than the increased ownership that you suggest. While CO used to be a 51% shareholder, a 2008 SEC filing showed no ownership at all. While the branding is similar and there are still ties through Star and FF programs, I believe that is the only tie between them.

CO actually sold the stake it had with CM. A relation between the airlines is the only link that was left.

Quoting davidho1985 (Reply 6):
Why spending money to do so?
Basically Copa is already under UA's control, acquiring additional shares (assume allowed by the law) will not bring much benefit to UA, Those capital can be used elsewhere which will bring more benefit to UA and their shareholders.

Copa's parent company is Copa Holdings...completely independent of United Continental Holdings.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: ghifty
Posted 2013-07-20 13:04:04 and read 5478 times.

What is the benefit to UA for having a carrier (CM) with such similar branding and identity? I see the benefit for Copa, no doubt, but United (especially if the concerns raised earlier are valid)?

Topic: RE: Would United Ever Take 100% Of Copa?
Username: Viscount724
Posted 2013-07-20 13:28:20 and read 5269 times.

Quoting VC10er (Thread starter):
I have recently wondered why United (or ex Continental) wouldn't want to buy and fold Copa into the main United brand? Are there foreign ownership laws?

A foreign carrier couldn't own more than 49% of Copa, as CO once did until they sold their entire investment in 2 or 3 stages.

And why would a highly successful and profitable carrier like Copa want to sell themselves? In the latest annual Aviation Week & Space Technology "Top Performing Airlines" survey (see the July 1 issue), which analyzes all publicly-traded airlines on various performance factors, mainly financial, Copa ranked #4 of all airlines in the world (and the only Latin American carrier in the top 10). For airlines with annual revenues of between $2 billion and $6 billion, they ranked #1, slightly ahead of #2, Canada's WestJet.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: copa330200
Posted 2013-07-20 14:16:28 and read 4922 times.

Quoting einsteinboricua (Reply 10):
Copa's parent company is Copa Holdings...completely independent of United Continentl Holdings.

  

Quoting Reply 9):
They couldnt afford it. COPA's market cap is over $6 billion, more than half of UA's value on an airline 1/8th its size.

  

CM learned a lot from CO when they were "partners" including the frequent flyer program , actually Boeing gave CM prices similar or equal to CO for their initialir 737  

Topic: RE: Would United Ever Take 100% Of Copa?
Username: stlgph
Posted 2013-07-20 14:28:06 and read 4862 times.

Continental sold off its shares in 2008 at $35 a share, roughly.

Today, Copa stock trades at $140. Clearly a bad decision.

And at today's prices, as mentioned above, United couldn't afford it.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: ghifty
Posted 2013-07-20 15:05:06 and read 4623 times.

Quoting stlgph (Reply 14):
Continental sold off its shares in 2008 at $35 a share, roughly.

Today, Copa stock trades at $140. Clearly a bad decision.

Stock price is mostly only relevant in comparisons when supplied with volume, unless you're looking to trade in the short-run. Your company might have shares worth $100/share but only have 100,000 available. Conversely, you could have $1 shares but have 5,000,000 available. So then who's better..??

In the case of UA and Copa:
-UA trades at $35.41 (vol. 2,759,812).
-Copa is trading at $141.75 (vol. 154,858).
*as of 07/20, 3:00pm PDT

Using those numbers.. UA is "worth" roughly $97.72b. Copa is almost worth $22b.

I'll leave it at that.

Noting that one company is worth more than the other, or trades at a lower price, is not a very sound way of making investment decisions/analyses. Being worth more can mean jack squat if you're gonna go out of business (not implying UA/CM will). Expected growth, profit margins, performance, market outlooks, etc. would all be better metrics to go by since UA, even if it's worth less/more per asset value, is still the larger airline and will, by default, be worth more.

[Edited 2013-07-20 15:08:30]

Topic: RE: Would United Ever Take 100% Of Copa?
Username: MCOGVADCA
Posted 2013-07-20 16:24:10 and read 4218 times.

Quoting ghifty (Reply 15):
Stock price is mostly only relevant in comparisons when supplied with volume, unless you're looking to trade in the short-run. Your company might have shares worth $100/share but only have 100,000 available. Conversely, you could have $1 shares but have 5,000,000 available. So then who's better..??

In the case of UA and Copa:
-UA trades at $35.41 (vol. 2,759,812).
-Copa is trading at $141.75 (vol. 154,858).
*as of 07/20, 3:00pm PDT

Using those numbers.. UA is "worth" roughly $97.72b. Copa is almost worth $22b.

Umm, that's not how you calculate market capitalization. It's not market price x volume (which is largely irrelevant when evaluating the value of a stock, just its liquidity): It's shares x market price.

CPA is trading at 141.75 and has 44.36m shares outstanding for a market capitalization of 6.2B USD.
UAL is trading at 31.45 and has 333.94m shares for a market capitalization of 11.52B USD.

While UAL is still a more "valuable" company by this metric, the gap isn't as large as you claimed. As well, looking at other metrics though (such as EPS), it becomes patently obvious that CPA is a much healthier/more profitable company than its American counterpart. I could see United wanting to reclaim a piece of the COPA empire, but I see little reason why the Panamanians would want to be sucked back into an operation that vacillates between profitability and losses, when they've found a formula that works.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: ghifty
Posted 2013-07-20 17:16:12 and read 3997 times.

Quoting MCOGVADCA (Reply 16):
Umm, that's not how you calculate market capitalization. It's not market price x volume (which is largely irrelevant when evaluating the value of a stock, just its liquidity): It's shares x market price.

CPA is trading at 141.75 and has 44.36m shares outstanding for a market capitalization of 6.2B USD.
UAL is trading at 31.45 and has 333.94m shares for a market capitalization of 11.52B USD.

Thanks for the correction!  
Quoting MCOGVADCA (Reply 16):
As well, looking at other metrics though (such as EPS),

Glad I was on the right track.

Quoting MCOGVADCA (Reply 16):
it becomes patently obvious that CPA is a much healthier/more profitable company than its American counterpart.

This is what I was trying to get at.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: 2travel2know2
Posted 2013-07-21 07:12:39 and read 2149 times.

UA hasn't even started a rumoured SFO-PTY as its "CM getting into Star Alliance gift", making a CM PTY-SFO (plus PTY-DEN) most likely and when HOU gets an in-terminal F.I.S. the like-hood of CM flying to Houston is a big one.

Continental chose to sell its stock long before there were any CO-UA merger talks.
If UA top-people think CM would add something else to their airline, given how UA looks at CM and CM having AV/TA too in Star Alliance, perhaps CM management won't see it the same way.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: greenmow
Posted 2013-07-21 10:05:27 and read 1960 times.

Copa Holding share structure is designed to guarantee a Panamanian control of the airline.

Besides that the premium that should be offered for a hugely profitable business to Motta family is definitely out of United's reach.

Topic: RE: Would United Ever Take 100% Of Copa?
Username: luisde8cd
Posted 2013-07-22 08:54:20 and read 1553 times.

Quoting mcoatc (Reply 2):
No offense to anyone, but Copa is none of those things in relation to United. Copa pilots often barely speak english and their flying is often sloppy....wrong headings, ugly visual approaches, and lining up for the wrong runway. They read back a correct heading and then do something else entirely. I know this because I see them 4 times a day and everyone has to watch them closer because of past occurrences.

I'm a Copa frequent flyer and sometimes I bring a radio scanner when I fly so I can listen to the ATC while I'm at the gate waiting for my flight to start boarding. Having said that, I'd like to add that since 2010, Copa crews communicate always in English with PTY's ATC. That's surprising, as before 2010 they spoke Spanish in the frequency. Additionally, I've also seen Copa hiring American/Canadian/European pilots as they make English-only announcements to pax.

With this English-only move, I would had expected Copa crews to have a better command of the English language, however from your comments it seems nothing has changed. Lastly, just wanted to add that once in a CTG-PTY flight last year (I think it was a Copa Colombia crew), we experienced a very tight turn to final for runway 03R in PTY, it was the hardest turn I have experienced in a jetliner, it almost felt like flying in a fighter plane!

Regards,
Luis


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