Q&A With Pedro Heilbron, CEO of Copa Airlines

Note: This is an article highlight from the Summer 2024 Issue of Jetrader. To view the full magazine, including past issues, please visit the ISTAT website.

Jetrader: What was your career path prior to becoming CEO of Copa Airlines?

Pedro Heilbron (PH): I’ve actually had a very simple career in terms of full-time, real jobs (not counting summer jobs). I’ve had only two jobs my whole life, and they have both been under the same chairman. I came to Copa since I was working for a family in Panama, a significant economic group in the country, which, in the late 1980s, acquired a majority position in Copa. They were minority owners before that. So, I was basically sent from one company to the other. We weren’t sister companies, but we were closely related at the time. Now we’re a publicly traded company, so that has all changed. Copa Holdings’ chairman, Stanley Motta, was my boss in my first job at Motta International.

Jetrader: Who were your mentors and role models throughout your career?

PH: I have never really worked for many others or been part of a team reporting to someone, but when I first started working full time for Stanley, it was just him, myself and an assistant who we both shared. I worked on their private side — private investments and private ventures. From that job, I came straight to Copa seven years later, to my current position leading the company. We were a much smaller company, of course. I was reporting to the chairman, who was at first his father, Albert Motta, but Stanley was effectively my boss. So, I have pretty much always worked for him. He has been an important mentor to me.

My father, Osvaldo Heilbron, was a close friend and business partner of Stanley’s father. My father was a valuable adviser when I first started working for the Mottas and also helped me when I “applied” for the Copa job. (If I remember right, he actually suggested to Stanley that he should consider me for that position). My father was also a mentor, who showed me the way and always gave me great advice. Albert Motta was a very wise businessman and loved people. I learned a lot from him, too.

I don’t want to be cheesy here, but as mentioned before, I worked for one person sharing an assistant, and when I came to Copa, I had to lead a group of people, something I had never done before. It was a small group at first, but it grew rapidly in a short time, and I didn’t really have a lot of a lot of experience. So, my wife, Pituka Ortega Heilbron, was also a big supporter, who helped me develop my human side. I still have work to do, but I think I’m better now.

Jetrader: In 2023, Copa Airlines announced new expansion plans. Could you share with us what inspired these initiatives and how they have gone so far?

PH: A significant part of our business model, which we have been developing since the early 1990s, and it’s still what we do to today, is bringing connectivity to cities throughout the Americas — North, Central, South America and the Caribbean — that are not well connected with the rest of the Continent. The cities we have just announced fall right in that vision. For example, Florianópolis in Brazil is not connected to Central America or the Caribbean, and that’s a unique connectivity we’re going to bring to that important city. Same with Raleigh-Durham. Raleigh-Durham is a well-developed region of the U.S., but it has no non-stop flights to Latin America. We’ll be the first one. I believe another airline is going to connect Mexico City, but we will not be connecting Mexico. We will be connecting Central America, South America, some Caribbean and we will be the only service to/from Latin America to those markets, except for connection through some U.S. hubs.

It will be a unique service. We will bring unique connectivity, and we will also connect many secondary cities in South America and Central America with a single connection in Panama where the only other option will be double hub connections, which is a lot more complicated. Seamless single hub connections are what we do best and often. We are replicating that model with the new cities we have announced for June of this year.

Jetrader: Copa Airlines has garnered numerous awards and accolades over the years, including recognition for on-time performance and service excellence. How do you ensure such high standards are consistently met across the airline’s operations?

PH: We’re extremely proud of those achievements. We come from a small country in the middle of Latin America. Panama is a dynamic country, with maybe the top GDP per capita in Latin America, and we are a growing tourist destination. So, there are a lot of things about Panama that are quite positive, but we’re not known for punctuality. Actually, Latin America in general is not known for that. We’re also not necessarily known for being the most service-oriented country. We’re one of the most human, sincere and caring, but in terms of sophisticated service, sometimes we criticize ourselves. That’s why we’re very proud of showing the country and the world that at Copa it’s not that way.

Copa has consistently, like nine or 10 years in a row, been recognized as the most on-time airline in Latin America. And most of those years, we’ve been the most on-time in all the Americas, including North America. Depending who you believe, we were either three or five in terms of the most on-time airline in the whole world. Conde Nast readers chose Copa as one of the 15 top international airlines in the world. We also won the regional SKYTRAX award again and were rated a 5 Star Airline by APEX. We’re very proud of all these awards, as well as showing our country that it is possible and showing the world that a lot of great things are happening in Panama. We think we’re great ambassadors for our country.

But you asked how we accomplish it. It’s not an individual person, and, for sure, not myself, who can take credit for all of that. As an organization, we spend a lot of time and effort developing the human side of Copa, on our workforce and our people. A high percentage of our executives’ time, including mine, is dedicated to recruiting, training, recognizing and motivating our teams. It’s in our DNA, and it’s what allows us to achieve amazing results that are usually not expected from a small airline in the middle of Latin America.

A high percentage of our executives’ time, including mine, is dedicated to recruiting, training, recognizing and motivating our teams. It’s in our DNA, and it’s what allows us to achieve amazing results.

Jetrader: Your leadership has been instrumental in establishing the “Hub of the Americas” in Panama, which has been a pivotal point in Copa’s success. What challenges did you face in developing this hub, and how did you overcome them?

PH: People look at our hub today, and it’s usually in a positive way. They see its size and effectiveness, but what many people don’t realize is that we’ve been building this for over 30 years. This is not an overnight thing. It’s not an overnight success. There has been a lot of sweat and tears along the way, hurdles to climb over and challenges to deal with, from many people.

For example, when we started, the skies in Latin America were very restrictive. Most countries today have open skies agreements, or very liberal route rights agreements, but it was not like that 30 years ago. Back then, it was very difficult to obtain route rights, and the Copa team had to dedicate a lot of effort in negotiating new bilateral agreements, open skies agreements and the like. To this day, we still put some effort into that, but the skies are much more open. Most countries in Latin America that were closed 30 years ago are totally open today, and aviation, tourism and foreign investment in those countries is thriving thanks to the increased air connectivity. But it was a big challenge in the beginning.

Back in those days, infrastructure was also a challenge. At first, Panama had an underutilized airport infrastructure in terms of gates, runways, etc. But that changed as we started growing, so we had to work closely with our different governments for the infrastructure to grow alongside the airline. That involved a lot of communicating, lobbying, explaining the value of the hub to the economy, etc. It’s an effort that never ends, but we’ve been lucky that every Panamanian government has realized the importance of aviation for Panama and has invested accordingly. But it’s a ball that we can never drop.

We also had to convince international passengers that Panama, Copa and the Hub of the Americas was a good place to connect. Our alliance, as of 1998, with Continental Airlines went a long way in strengthening our product, our service, changing our fleet and convincing more passengers that this was a good airline to fly and Panama a place to connect. And then our workforce, especially our specialized workforce — pilots and mechanics — had to develop and grow alongside the airline’s own growth. We come from a very small country with not much of an aviation industry, besides Copa, so we don’t produce enough specialized professionals in Panama. Over the years, we have invested quite a bit in the training and development of young Panamanian pilots, mechanics, etc.

Jetrader: The “Panama Stopover” program has been a significant initiative in promoting tourism and economic growth in Panama. How has this program evolved since its inception, and what impact has it had on both the airline and the country?

PH: The program has been very successful, relatively speaking. We think it has a lot more potential, and we plan to continue growing it. Panama City, the Hub of the Americas, as we have branded it, is the main connecting point from South America to Central America and the Caribbean. That means that millions of passengers transit Panama annually. Working together with Panama’s DMO (destination marketing organization), PROMTUR, and with our Ministry of Tourism, we came up with a solid stopover program and also a joint marketing and promotional effort. It’s been growing nicely. It started pre-pandemic. Once we got back to full flying, we quickly reached the pre-pandemic numbers. This year, we expect to be close to 150,000 passengers, which is around 15% of the tourists Copa brings to Panama. The total tourism numbers are larger than that, but there are many other airlines that also fly to Panama and bring tourists here. We’re the major one but not the only one.

?Jetrader: The Latin American Aviation Academy (ALAS) plays a crucial role in training the next generation of pilots. What motivated Copa Airlines to invest in upgrading its training fleet, and how do you envision this contributing to the future of aviation?

PH: We call it ALAS for short, which means “wings” in Spanish. It’s a not-for-profit organization subsidized by Copa. It’s an interesting development for us. With our fast growth, we started creating a lot of pilot jobs, which are great jobs, especially for aviation enthusiasts. It’s a well-paid, great professional career. But we were having a hard time finding qualified pilots in Panama. I mentioned the size of the country already and the lack of a significant aviation industry but, also, affordability is a factor. It is not an inexpensive career, and some of the local schools were not producing commercial pilots. Most of the pilots graduating from local flight schools were not passing the Copa entry requirements, and then very few could afford to go outside, such as to the U.S.

We decided that it was our social responsibility to create an affordable, world-class academy in Panama, which we did, and that is the Latin American Aviation Academy (ALAS).

The students have to pass all the Copa entry requirements before they start spending money in the academy. Also, together with our pilot union, we have a scholarship program. Also, there’s an institution in Panama that gives financial aid to students. So, a talented student who has no financial means can graduate from ALAS without spending a dime. A percentage of their training costs might be in the form of a loan they will easily be able to pay once they start working for Copa. So, ALAS not only produces qualified first officers, which allows us to continue growing, but it’s also our social responsibility. It’s a great opportunity for talented Panamanians who could otherwise not afford the career. We have just invested in a new fleet of brand-new diamond aircraft, which we’ll be getting as of July of this year. We’re going to be able to lower the flight hour cost and provide an even better opportunity for young students.

?Jetrader: How do you view the health of the industry, especially after the recent years of turbulence?

PH: I’ll try to answer without crying. It’s been difficult. The health of the industry is impacted by mostly outside, uncontrollable factors, be it pandemics or health crises, fuel, economic recessions or slowdowns, or climate change, to name a few. Whatever we can think about affects aviation in one way or another. However, after the pandemic, which could have destroyed the industry, passengers came back in higher numbers than before. I don’t think anyone quite understands what happened. There are countries that gave subsidies, and there are other countries, like most of Latin America, where there were no subsidies for airlines and not much financial assistance for their population. Panama did give some assistance, but many did not. Passenger traffic came back strong anyways. It’s hard to explain it, but the strong passenger recovery, combined with the fact that I don’t think that, in the history of aviation, airlines have been better managed than they are today, has left our industry almost intact and growing. In the past, some airlines were well managed, but many were not. Airlines today are much better managed and are also a lot more efficient in terms of cost and service.

I don't think that, in the history of aviation, airlines have been better managed than they are today... [which] has left our industry almost intact and growing.

Combined with passengers flying in better numbers than before makes the industry a lot better prepared and more resilient to deal with the ups and downs of the economy. I’m very positive about the state of aviation and the future of aviation. Going forward, we must deal with some challenges. There’s a lot of pressure from the climate change side, and the industry is doing a lot in that sense, but we cannot do it all. We do not make fuel, we do not build engines or planes, we do not manage the airspace or the airport infrastructure. There are a lot of other factors and players that influence this, so it has to be a collective effort.

Jetrader: Relatedly, what are your and Copa Airlines’ thoughts on sustainability?

PH: Our fleet is exclusively 737s. We have both NGs and Maxs. They’re all fairly young.

We have a very strong culture and organization of always looking for efficiencies and fuel savings, reducing weight on the aircraft, flying the most direct routes, etc. It’s good for business, and it’s good for the environment.

We also have made a significant effort in eliminating single-use plastics in our aircraft, bringing on board supplies made of renewable sources. In our facilities, a high percentage of our electricity is from renewable sources, and we recycle everything that can be recycled. We’re very conscious of that.

Of course, the big challenge is in the fuel we burn, which is where around 90% of our emissions come from. That’s a big challenge for the industry. IATA came up with a net-zero target for 2050, and we have committed to that target like many other airlines. Now the whole collective group of participants in this industry, the air navigation operators, the engine and airplane manufacturers, the fuel producers, airlines and governments, need to come together to produce enough sustainable fuels to fly in a more efficient way.

Jetrader: Copa Airlines has achieved remarkable success without operating widebody aircraft on international routes, challenging the notion that only large airlines can thrive. What advice would you give to smaller airlines or businesses looking to emulate this success in a competitive industry?

PH: You ask about the success we’ve achieved without widebodies, but I would say the success we’ve achieved thanks to not having widebodies. There are two ways of looking at this, and of course there are many airlines that are extremely successful with widebodies. But the swings in the results of the airline are greater when there is a highly diverse aircraft fleet. When the business is strong, widebodies can yield great results. When the business slows down, then they are a heavy weight to carry. Our model is based on a single fleet of aircraft.

We only fly up and down the Americas, where most markets can be served with a single-aisle 737. It makes us very efficient, productive and effective. We can move aircraft around.

It’s what makes sense to us. It’s not necessarily what will make sense to everyone.

Jetrader: You have held influential positions within both the aviation industry and tourism sector. How do you leverage these roles to foster collaboration and drive growth opportunities for Copa Airlines and Panama’s tourism industry?

PH: We see ourselves as an integral part of Panama’s development as a tourist destination and as a hub for international businesses. We’re a service economy, and connectivity is very important for Panama, so that’s why we see ourselves as an integral part of that. We work closely with the government, the tourism authority and the DMO, PROMTUR, to promote the attractiveness of the country for tourism. We also work closely with the government, including the airport, to pitch foreign airlines, especially from regions or countries that are not well served, to fly to Panama. And when they do, we work closely with them to connect our two hubs. This is all very beneficial for our country.