#i just really want people to understand that there is successes in repatriation even if its a long and difficult process with many setbacks

[void-of-unparalled-chaos]

So glad to see someone acknowledge repatriation efforts! I feel like a ton of people think that it's the scientists and academics who are the problem, but in my experience, the overwhelming majority of them are all for repatriation and are actively working towards it. Major setbacks are typically at a governmental level, and even if we manage to fix that mess, it's still going to take time because well...

You would think that academic and museum collections would be organized. As someone who has actively worked in curation, I am telling you they are not and that also causes issues for repatriation.

In the case of the paleontology curation I used to work with, it was a bit more straight forward than it would have been with Archaeological artifacts (paleo has less governmental protections than arch, which is fucking awful in many ways but slightly beneficial in terms of repatriation efforts). The collection had lost funding about 30 years prior and just regained it when they hired myself and my PI.

During those thirty years, most of our specimens sat stagnant in the cabinets, but a ton of it also went missing. There were also a lot of fossils that didn't have all of their proper information recorded such as when/where it was recovered or what it was. This causes issues, because typically (at least by USA law), the ownership of a fossil is whoever's land it was found on, and ownership of land changes hands over time. If we want to repatriate something, we need to know who we are repatriating it too, hence the need for a recovery time and location. Then there was all the missing stuff. We could look at our papers and see that we are supposed to have 45 specimens from Morrocco, but sometimes they just aren't where they are supposed to be. It will say on paper that they are in cabinet C7 but sometimes they aren't, and now you have to figure out where they went.

Despite this we were still successful in begining the repatriation process for some fossils, and to my knowledge, at least a few of them have already been sent on their way!

Archaeology has these same issues with that extra level of governmental restrictions. An example: my university.

My university has an active archaeology program and is also home to the state repository of archaeological artifacts. This unfortunately includes human remains, specifically Native American remains which were sourced unethically back in the 30s 40s and 50s. Even with the law now in favor of their repatriation, it's super difficult to figure out where exactly they belong because many of these skeletons were shoved in cabinets in the back of one of the classrooms without proper identification information and were forgotten about until they were rediscovered just recently.

The department wants to repatriate them, but they have NO IDEA who these people were, nevermind what tribe they were from. I don't know what specifically is being done right now, but I know the remains were relocated to a safer, more proper storage location. I believe the possibility of genetic testing has been discussed, but in order for that to work the tribes in the area would have to agree to be tested too, and people don't always want to provide their genetic information. Basically the department is at an impasse last I checked.

All this is to say that the majority of scientists and academics are trying, but repatriation is not as straightforward as you might be led to believe. Keep putting preassure on the right people to get those governmental restrictions redacted, and don't buy artifacts from shady people, especially Native American ones if you live in the USA. If for whatever reason one comes into your possession, I strongly urge you to give it to the correct people so that steps to repatriate it can begin.

“The entire British museum is an active crime scene” - John Oliver

[battle-of-alberta]

Hi and welcome to this thing that's sort of a prequel to the timeline I'm working on. The working title is Alberta Story, but as you can see I kind of changed directions midway through as I thought about it more, I figured if I was getting frustrated then surely Ed was also getting frustrated with it so I turned it over to him to express that, haha. I wrote the first half of this last fall and stewed on it for about a year and decided, screw it, I don't know where I'm going with this but I will slap on a few more panels and figure it out as I go.

This might be the closest thing to a reboot of the BoAB main storyline for a while. I wanted to do something that gave a cursory outline of Canadian / Albertan history for people who are new to it, but of course it runs the risk of repeating every narrative Canada / Alberta have about themselves and that's quite frustrating, to be honest! Particularly when you are trying to write characters who lived through a great chunk of it.

I was trying to think about where to "start" the story of Alberta, particularly after reading Mavericks: An Incorrigible History of Alberta. A lot of the tongue in cheek ahistorical assigning of Albertan-ness to even protozoic life rubbed me the wrong way even though I found it an interesting narrative, so I wanted to illustrate the difficulty of "beginning".

Additionally: I really find it frustrating in the Hetalia fandom when people kind of take Himaruya's approach and suggest the colonized personifications almost predate colonization somehow, like they were "always there", or the approach that they are direct descendants of some ambiguous ancestral "Native America" that mysteriously no longer exists. At the same time, I sort of understand how it also happens with the narratives we construct ourselves, in textbooks and museums, that have long illustrated "pre-history" (Indigenous history) as opposed to "history" (the "Real" history of Euro-Canadians). It's a cultural underpinning that needs to be undone.

I don't make any ambitious claims to produce real, decolonizing work, I realize there's this big gap in this universe I'm building that acknowledges municipal personifications and only vaguely gestures at the idea of others and there's a myriad of issues with that, but it's a place that I as a euro-canadian myself am starting with and I hope to continue learning and growing from here.

"Here" is summed up as: isn't it crazy that a company that was just gifted 1/12th of the surface of the Earth not only predates the idea of this country and its cities but also still exists and is just a place you end up in at the mall now?

More detailed explanation of each panel follows.

Diver's Claw: Several stories in different First Nations cosmologies reference the Creator or another figure making a flood that covered the whole earth, where a survivor (Wisakedjek in Cree/Ojibwe stories, Na'pi in Blackfoot, etc) sends down a succession of animals to the bottom of the waters to retrieve a piece of the old earth, which they can then use to create anew.

Mounds of Earth: When the Northwest Mounted Police were sent out west from Canada after purchasing the territories (including Alberta) from the Hudson's Bay Company in 1870, they marked the border along what would become the 49th parallel between Canada and the United States with piles of dirt.

Descent from the Stars: This is supposed to be a depiction of Manitou Asiniy, also known as the Manitou Stone or Creator's Stone, a meteorite that has spiritual significance to many Indigenous peoples. As I write this, he (as a sacred being, he is referred to with these pronouns) is currently in the custody of the Royal Alberta Museum which has recently agreed to return him to the site where he was originally taken from near Hardisty in 1866. Currently, the gallery is open for worship and ceremony until it is time to repatriate him.

Bodies liquified in coral: this is NOT a scientific illustration, haha. The idea is that a lot of Albertan identity comes from about 400 million years ago in the Devonian period. At the time, a big chunk of "Alberta" was covered by ocean. The organisms lived, died, and over time became crushed by sediment layered over them. Coral has a lot of holes perfect for holding this sludge and fossilizes nicely here, and it is this layer of Earth's long history that speculators are looking for when drilling for oil.

Lips to a book: Alberta joined Confederation on September 1st, 1905, which our last premier tried to commemorate with a holiday that no one showed up to. Back at the turn of the century however, it was a massive party attended by Prime Minister Wilfrid Laurier and the Governor General, a position in Canadian parliament that represents the King or Queen of England. Govenor General Grey (his grandpa was the Earl Grey the tea was named for, I believe) was the one who kissed the bible at this inauguration.

Prince: The prince here is Prince Rupert, who Rupert's Land was named for, and the king in question is Charles II of England (yes, the Restoration and Great Fire of London party guy from the Stuart era). Rupert's Land centred on Hudson's Bay and made up over 40% of what is now considered Canada. The Hudson's Bay Company was granted the charter to all this territory - if they found the Northwest Passage while they were at the business of acquiring beaver or otter pelts, it was certainly a bonus.

The rest is fairly self explanatory, I hope. Like I said, I felt like I was falling into the trap of the same old story of pioneers and exploration that has been absolutely done to death in Canadian history, and I didn't have anything particularly new to say about it that would maintain this storybook level of accessibility so I just. Stopped! Shifted gears! haha. Still, I think the fur trade is a very important piece to the puzzle that often gets either a bit overhyped or glossed over in favour of railroads in Canadian history and almost entirely ignored and forgotten in American history, and it makes sense to start there, particularly for Ed who has a lot of Complicated Feelings about it.

Enjoy! Maybe one day I will figure out part two.

[dallasareaopinion]

Border Wall: I’ll give Trump one, and then another

Maybe Trump has a plan for the border wall. I will give him the opportunity to espouse it. And I hope he takes it. Maybe he should spend time explaining to the independents and undecideds how his border wall fits into the big picture. Maybe he can give us a comprehensive immigration reform package along with it. All in all he should.

 So, Mr. President to help you give us a plan I will frame some ideas I have. Feel free to run with them.

 Immigration reform has popped up as an issue infrequently, yet enough times to actually mean something to the political body of these United States. And we really do need reform. For example, have you seen how many different types of cards immigrants, refugees, temporary workers, permanent residents, temporary residents are handed out by the State Department in general. And it breaks down into subtypes for some of these categories. Once you receive one card for residence the immigrant works their way through hoops to become either a permanent resident or possibly even a citizen.

If you are curious, here are a few websites you would need to research to get started.

https://travel.state.gov/content/travel/en/us-visas/immigrate/the-immigrant-visa-process.html

https://travel.state.gov/content/travel/en/us-visas/visa-information-resources/all-visa-categories.html

https://ar.usembassy.gov/visas/what-to-expect-after-your-visa-is-approved-and-issued/

 And this is just a walk through of various sites a person would have to navigate if they want to come here. And by no means is this everything. Do the internet search.

 Consolidating just some of this process will be helpful to people wanting to come here, yet it would also be helpful to the people who must manage this program.

 And then you need to manage the different types of groups, individuals, refugees, workers students, tourists, asylum seekers, people who want to live here and become citizens.

 So as part of this process lets break down some of the categories and talk about what we want to do with each group and afterwards discuss border security. The “Wall” in your parlance Mr. President.

 This is not an all-inclusive solution for all problems discussion. This is a rough draft of some ideas our Congress and you should be developing instead of hacks like me.

 I think we can agree many people want to come here and live, hopefully experiencing the greatness of our country and the Constitution. We want to grant this opportunity to people who want to come here and contribute.  Our nation is great because of the diverse groups of people who have migrated here, found success, and raised families instilling in them the virtues and values upon which we are founded.

 Do we make it harder than before to become a citizen to maybe limit the number of people entering our country? Do we open up more? I think that is a question our Representatives need to ask their constituents to get a feel. And then bring their answers to DC to begin the process of the whole reform.

 Procedurally it must be easier. We should break down the categories into:

People applying for permanent residence and/or citizenship should have the same criteria, same application, and well same red tape. And right now this is pretty similar. The goal becomes how stringent do we make the qualifications to apply.  One card, one process, one group with our government to manage them and keep track of them.

 The next group(s) get a bit trickier. Let’s make refugees and asylum seekers the second priority. Why? I think we need to define what we consider potential eligible refugees and asylum seekers in advance.  We lay out the criteria in general and so anytime there is a crisis around the world, our State Department can apply to Congress for people under this situation to become eligible to apply. The process becomes the same no matter where they come from once the situation is pronounced to meet the criteria. Every single person from everywhere gets the same card, has the same restrictions, must follow the same rules, and must contribute to finding a solution to get them back to their country of origin. We do not have to and maybe we shouldn’t offer blanket citizenship or permanent residents to a refugees at all. They can eventually apply via the process determined for residency, but have to meet the criteria established with the first group above. And each year the State Department would come to Congress and prove there is still a need for the group in question to still fit under refugee or asylum seeker status. Congress keeps passing laws for all sorts of situations. We need to have one shoe to fit all feet so to speak. And have it reviewed every year. And with predetermined criteria built into the system, this annual process should be somewhat cookie cutter and also allows flexibility throughout the year when a crisis develops. Once a scenario is determined to be safe again, our State Department begins the process of repatriating the refugees. Yes, this will incur some tax payer expense, but allows the government to better manage the flow of people becoming citizens in general and people overstaying their time. More on this when I discuss border security.

 The third major group is temporary workers. And this category encompasses a wide range of possible applicants, yet the same procedural philosophy can be applied. All people wanting to be a temporary worker uses the same application, goes through the same sub-group within our government, follows the same rules and restrictions as all within this group, and has an exit strategy with one exception which I will come to. The rules here apply to anyone wanting to work here either on a short or long term basis. The only different group would be people who work here year in and year out for seasonal or contracted work, yet go home for part of the year. They follow all other rules except they do not have an exit time frame. In days gone by, the term migrant farm workers might come to mine, yet we would be a bit more expansive. The exit time frame can be years from application, yet they are not here to become citizens or permanent residents and only for those hired by companies for job specific purposes. Here are some proposed rules for their employment. First there is modified minimum wage requirements. And this is especially important for the seasonal or temporary permanent workers. It applies to all though. Second, they do not pay income taxes as we know it. Instead they would pay fees based on their income. It would work like our graduated income tax is suppose to work. Income tax is another disaster conversation for another day. I wish people would remember there is a Constitutional Amendment (16) around this topic. For now though I propose a graduated fee for working here on a temporary basis. This fee is withheld from workers paychecks and is used to help fund the Immigration policies, procedures, and personnel the government manages. It isn’t the full budget for immigration, yet helps to offset the costs of the overall program.  There are no forms to fill out like a 1040, no refunds, no extra pay at end of year, it is an amount determined as a graduated percentage by the amount of pay. And if pay varies, so does the amount withheld. Also a small portion can be set aside to help employers pay workman’s compensation which also has limited benefits, yet allows the temporary worker full medical coverage for injuries on the job. They do not pay into or earn social security. They do not receive unemployment benefits and if there job tenure ends early they still need to leave early. Employers have three responsibilities, one if they hire illegals fines are much higher than they are now and possible jail time could be explored, two, they must report if the employee is no longer working to the appropriate government group and give last address, contact and family info known to them.  A 2b would be they need to update the temporary workers info regularly, and three they make sure they comply with fee withholding and sending to the government. Enforcement comes from the fees collected by the employers.

 Next group is student visas. This can be real cut and dry. I am open about them being allowed part time employment while students, but face same rules as the temporary workers for the employment. Second the school is responsible for their information being updated with the government once they graduate or leave school. They can apply to go to a different school, but that must be approved with the same process as their original application to study here. The cannot arbitrarily change schools.

 There are other categories, but this is a good over view of what can be done, still allow immigrants, yet manage our resources. And if you didn’t catch it, each category has its own subgroup within the State Department’s umbrella. This allows the government worker to get to know and better understand the groups they are managing.

 Border security would be part of the mix in the comprehensive reform to be passed by Congress. And let’s talk categories of people that cause problems under the theme of border security. You can generalize and say anyone not meeting the criteria established in the immigration reform is an illegal alien and can be deported immediately. For now we will talk about the more infamous situations.

 Drug smugglers and drugs being imported into our country. I am not going to address this because my ideas are so controversial that saying we need to make marijuana legal is the least controversial part of the program. There are an enormous amount of players involved that would need to be brought into the negotiations and there is too much detail for this post which is already running long. One benefit is the chance for Mexico to develop a larger middle class once the program is fully established. Mexico having a stronger middle-class was one of the selling points of the original NAFTA, yet corporate greed killed that so we need to follow through if this proposal comes to fruition.

What about all the bad guys Mr. President? I agree we need to be tougher. I think if an illegal or even legal immigrant breaks the law they have two choices. Serve full time for the crime as any citizen of the US would or be deported. No plea bargain and no time off for good behavior, they receive max time under the law once found guilty of any crime, then they get sent home. No appeal. If they come back, even without committing another crime, if found would serve twice the adjudicated sentence with no chance to go home until the full sentence is served. This may sound harsh to some, yet this is where the average citizen has a right to feel protected in their homes and in this country. This is the law, no exceptions.

 People caught smuggling humans into the country, Smugglers get full prison term and the people smuggled are treated as refugees with immediate determination of their home situation to see if it meets the criteria determined as outlined above. If no crisis in their home country, they are sent home via the same process as refugees who are determined not to be given refugee status anymore.

 And in general we build a better tracking system for all people entering our country for their benefit and ours. When their time is up they have “X” amount of time to return home. If they do not return timely, our government can seize assets to pay for their return home. Sounds harsh, but if we want to have a successful immigration policy that allows a vibrant interchange of culture and people we must protect ourselves against people overreaching or taking advantage of the situation. Everyone has time to leave respectfully, but there is a limit. Our government is given their information routinely by employers etc, so there is no excuse or there are penalties for failure to comply.

 These are just a few examples of developing a broad immigration reform policy, yes that might sound harsh on the surface, but if managed openly, transparently, and gives people the chance to become permanent residents or work here as wanted or needed we should embrace them being here. It is up to us as citizens to teach and show them our culture and our values in a positive way to make their experience beneficial for the short or long duration.

 See Mr. President you can have immigration reform and not spend one dime on a wall that is counter productive to the growth of our nation. Remember for over 400 years that area of the world has been in flux from exploration to the mix of people enjoying life, sharing culture and trade, a moving boundary that is arbitrary at best, and one that for generations actually means nothing because it is all family.  Maybe it is only important to decide the most basic of necessities, but if you live, work, or play on the Southwest border you know how wonderful this part of the world can be if you treat the area and all the people with respect. Problems can be solved if you define and identify the problem and leave what works alone.

 Cheers.

[sunisalee2020]

(originally posted to my supposed private tumblr) Random thinking - With what is happening in Afghanistan it reminded me of my Hmong people’s stories. Many had to fight their way on to US airplanes and escape Laos. For the unfortunate they were left behind or had to cross the Mekong river to Thailand refugee camps. Afghanistan and Laos’s history is different but there are some common themes. During the Vietnam war USA lost and they had to pull out. USA recruited lots of Hmong to fight the Vietnamese communists. Hmong people even had lots of generals. Most famous Hmong General Vang Pao. Lots of Hmong and other smaller ethnic groups had to flee Laos because it became a communist nation.

This music is Hmong song about 1975 of the 5th month when Hmong had to escape. Nine years later I was born in Canada. One of the first Hmong people to be born in the western world. Our parents were still dealing with lots of trauma from the war. It’s crazy my parents and grandparents went through all this! Most people don’t know this. Sometimes people would think it’s fake. The only random thing about this video is it seems there was a video from 2003. My paternal grandparents and uncles were finally all able to come to USA around 2003. Hmong people came in different waves. Not many Hmong people were allowed to go to Canada since Canada was not involved with Hmong people in Vietnam war.

From my understanding the Hmong who fled Laos to Thailand in 1975 that never got to resettle in western nations had to be repatriated back to Laos in the early 2000′s. Hence why my paternal uncles and cousins were able to come to USA. I know my uncles were not Thai citizens but some of my cousins did have Thai citizenship but I guess they did not want to be broken up. Also from what I understand many Hmong Laotian refugees were never allowed Thai citizenship. The USA decided to help bring some Hmong to USA since it was illogical to repatriate Hmong Laotian refugees back to Laos. It’s really sad because once Hmong refugees went back to Laos they were persecuted again and many escaped back to Thailand. So many tragedy all over again. Though things do seem to be okay now.  

In Canada we do have a sizable Afghan population but they all have their own unique ethnic groups. I actually forgot what ethnic group they are but I met some that looked Asian, meaning they looked like me and I was surprised they looked a bit Asian. So just remember Afghanistan has lots of different tribes and ethnic people who will be coming to Canada/USA as refugees. I’m not sure what the biggest or main ethnic groups they will be.

Maybe I’m naive? I hope all the best to Afghan people. They will be okay in USA/Canada. I can’t say much for their country though. The world will always have problems. Sometimes I think powerful nations should just leave others alone but also I don’t know. Like Russia/USA/Canada should not go to Afghanistan in the first place? Everything is tricky. Because at the other hand some Western nations ideas are good. If I was not born in Canada I can’t even imagine what it’s like to be Hmong in Asia. For the majority of Hmong people in Asia it’s not easy. Lots are really poor. But this does not mean there are no wealthy or successful Hmong people in Asia. Just that I don’t think I would have been one of the fortunate Hmong in Asia. But who knows. We don’t get to choose everything in our life story. Some are orphans some get disable :(. Maybe I think too much? We just need more empathy, sympathy and compassion in the world.

[lolitalempicki]

Working in the consular section at our mission in one of the tourist destination cities and the busiest international ports in the world has been a whole ride of experience.

Since the dawn of my career as a diplomat, I know that I have signed up to work in any field and indeed, it is an honor to serve the Indonesian citizens overseas. Listening to their stories, complaints, and problems, have enriched my soul inside and out. All I can offer to their situations is assistance and help.

The pandemic has escalated the level of distress of many people overseas, especially when the distance becomes really matter as the lockdown started at level 5 and national emergency status has blocked face-to-face interaction which is central of our existence as human being. On the other hand, we can't deny that our emotional stability heavily relies on how we develop good rapport with our surroundings. That said, you will feel secured and trust someone by sensing them. I can throw a lot more of psychology 101 about it, but I simply won't bore you with that.

That's where I started my journey in the consular affairs. I meet the Indonesians to understand their positions from their points of view. I would, instead, consider myself as their friend and companion.

Being close with them whom I serve is my way to build the trust and open communication channel so that we can work together. Inda is no exception.

She reached out for our office in Cape Town upon her arrival here. I was not aware where she from and what was her purpose back then. She only asked me about how SA manages the spread of COVID19 and given that she was from UK - a red zone- and had no symptoms, I suggested her to wait and see for a few more days and consulted to any medical practicioner later on only if the symptoms appear. I just checked her whereabouts and whether she planned on self-quarantine or not. That time, I was about to build up database and open up a communication network of stranded Indonesian tourists to keep anyone on the loop.

On 24th of June, she said she was gonna leave the country with Emirates. It turned out that her flight schedule was the same like my mom's. I gleefully said that I can meet her up at the airport and see her off. We finally met up at CTIA.

Little did we know that most of international flights already canceled their schedules a few days before the lockdown began. Emirates was literally the last flight to fly out SA. It got delayed for 5 hours and consequently, my mom and Inda couldn't catch the connecting flight from Dubai to Jakarta. The guys behind check-in counter simply referred us to contact emirates office in a deadpan manner. It was close to 16.30 when the office was nearly closed. I thought I could give a try. It was ultimately futile. I would never forget how they responded irresponsibly: "you're gonna miss the last flight then." I don't think I would need a customer service officer to say that inane fact.

I remembered vividly how airport scene turned like a drama set. Distress, rage, and panic expressions were displayed altogether. It was downright dramageddon. Many people bursted into tears. Most of those people's plans were jeopardized by emirates' so called delayed 'last flight'. Everyone fell into the same predicament.

That time I felt like 'geez, I feel like they feel.' How you might carefully plan to reunite with your beloved, but then missed the last fuckin chance?! An ineffable sensation started creeping in.

I turned to Inda and asked her next plan. She was a brave, fearless, and cool girl. Just like in her story, she pulled off the Cape Town trip by herself. Despite the pandemonium, she pressed on regardless. She ended up looking for miracle and flight ticket to Jakarta throughout that late afternoon.

I left her there at the airport and offered her the help, in case she needed anything. She texted me at 8 pm later that evening. She asked if she could crash at my place for a night. I responded, yeah sure. It was late and cape town is not a safe place for non-inhabitant or tourist. I must say, we feel like living in the hood here. My mind was twisted. I could just pull out my car and picked her up at the airport, but then she said she could just meet me at the consulate's office. That night I didn't even think twice to offer her my place. I said to myself, if she appears to contract covid 19 and I was about to be infected down the road. I couldn't even care less. If I were about to die because of this disease, at least I helped her and did something meaningful for others. I would be happy on my deathbed.

It took me 15 mins to communicate with the Consul General as well as my other colleagues to evacuate Inda to the guesthouse. I can't be thankful enough to have such a supportive work environment during such a circumstance.

The next morning, the consulate's driver and I took Inda to find another flight ticket. Ethiopian. The sales people at Cape Town Airport were working from home and they were out of reach. I called the manager of EA airport office just to find that EA temporarily halted its operation to Indonesia. We rushed to the airport and got no result either. It was frustrating. Still, Inda could put on her best smile.

Outmanouvred by the random flight cancelation, I then consulted my CG. He later asked Inda to stay at the Residence. The rest is history.

We updated her and other stranded Indonesian citizens every other day on the repatriation plan. We also checked their well being. Are they okay? Do they need anything?

Lucky enough, the South African government offered Indonesian government repatriation exchange. She was included on the list and she made it back all the way to Indonesia.

Inda is now back in UK and we are still in contact every now and then. I wish her a success and splendid career anywhere she wants. Thank you for the trust in us and the positivity that you shared.

[billehrman]

“Get On Board Or Get Run Over”

Spoken like a true diplomat, NOT, but those were the words spoken from our President this past Thursday at his first press conference. Clearly he possesses no emotional intelligence sending a message to the media and his major antagonists in that way.

He does not understand how to disarm his naysayers and enroll them into his agenda and worldview. Someone that I know and trust agrees with my thinking and in the next breath said “but I’m glad that he said it.”  This is analogous to the election where most citizens would not admit out loud that they supported him; yet they voted for him once in the ballot booth.  I get up every morning only to read/hear negative press about Trump, his team and his agenda in the media fully expecting the markets to decline; but low and behold, they go up both here and abroad. What gives? Is the investing public so foolish or do they see that Trump’s reflationary agenda is not only good for the United States but for them as well. A strong America is good for most everyone excluding maybe Russia and China; although they, too, will benefit economically from an expanding U.S. economy.

Trump remains true to his word and continues to go down his list of campaign promises checking them off day by day. If you simply listen and accept what he says, profitable investing is not that hard. I keep questioning whether the markets, especially the reflation beneficiaries, are ahead of themselves despite only being in the early days of a Trump Presidency. But then I go back to my days when I was CIO of the Quantum Fund and remember how George Soros would stay invested in a trend until he felt that it was over. He would never get off in the early innings and would add on any weakness. Investing, not trading, was his way to create real wealth. Same with Paix et Prospérité.

Trump, at the Boeing facility on Friday, said that his mantra is “Hire America, Buy America” which sums up his campaign slogan “Make America Great Again” in a nutshell.  He went on to repeat that his administration would:

Cut taxes for individuals and businesses including a deal to repatriate foreign retained earnings currently over $2.3 trillion dollars

Reduce the regulatory burdens including Dodd-Frank that have held back businesses of all sizes

Change trade policies to create a level playing field for U.S. corporations

Repeal and replace Obamacare with a better alternative for all Americans

Reduce/eliminate waste and abuse in government while using its purchasing power to lower costs

Make America energy sufficient

Improve our National Defense/Intelligence while adding support to local police forces

Rebuild the infrastructure of America

Protect our borders with a new and stronger immigration policy

Appoint justices to the Supreme Court who view the Constitution like former Justice Antonin Scalia

Raise the status/respect/reliability of America as a leader/partner on the world scene

Quite a mouthful! Do you believe that the media and the Democrat establishment can stop him because they don’t like him or his tactics or that he does not have the people in place or a majority in Congress to implement his agenda? How do you explain the rise in stock markets everywhere since his election, the increase in the slope of the global yield curve, the rise in commodity prices, and the huge increase in both consumer and business optimism? Trump is not running a popularity contest but is leading a call to action as we were stuck in the mud long enough under the Democratic administration. Don’t be fooled by the rise in the stock market under Obama’s watch. It was all fueled by monetary policy pushing rates near 0 here and negative abroad. Economic growth was anemic at best while corporate profits declined.

So what is the road map to Peace and Prospérité?  First. one needs a global perspective with an understanding of the relationships between and amongst all nations as it pertains to economic, monetary, political and social issues, as there will be winners and losers. Invest at the margin looking to own those nations/industries/companies that will be improving and sell or short those whose incremental returns are in the process of peaking.

Trump’s agenda to “Make America Great Again” along with “America First” clearly means that the U.S. will be on the rise as its global position improves at the margin. Then drill down further and analyze what industries will benefit most from his policies, both domestic and foreign, and which industries won’t. It is equally clear that the reflation beneficiaries include industrials, financials, technology, industrial commodities like steel, aluminum, copper, chemicals, and energy, capital goods and stay long the dollar while those that won’t include retail, large pharma, consumer durable and non-durable companies, utilities, REITSs and bonds of all durations. Owning foreign multinational reflation beneficiaries that have a large component of their U.S. businesses manufactured here will benefit too. The U.S. will become the engine for global growth once again and most of the benefit will accrue to those industries/companies located here.

I want to digress for a moment and comment on active vs. passive management and fees. I re-entered the hedge fund arena in 2013 to prove that investing rather than trading was the only way to create real wealth utilizing a global macro-economic perspective and in-depth fundamental independent research. Hedge funds as an asset class was under attack as it had under-performed for several years. What investors fail to realize is that hedge funds/active managers really achieve most of their out-performance when markets decline and rarely stay ahead in up markets as they always hedge to a degree. Passive or index funds are always fully invested which means that they go up with the market and down with the market rarely outperforming over time. We have had a straight up market for 8 years now so you can guess the consequences on relative performance.  

Secondly there has been a proliferation of hedge funds after 2008, which is akin to a cyclical company expanding its capacity at the top of a cycle, which exacerbates its next downturn. There continues to be shakeout in the hedge fund industry just like in many industries over the last several years with the weak falling by the wayside.

Finally I want to say that not all hedge managers are alike. Why did Apple become an innovator again and a huge success once Steve Jobs returned; why has Nucor in the steel industry been able to increase its dividends each year over the last 38; and so on and so forth.  It comes down to management. When I invest in a company, I look first, second and third at management as I know that great management can succeed in virtually any industry in any environment and will create real value for its investors over time. Same for the hedge fund industry. Do you really mind if great management teams earn big bonuses if they create huge returns for their investors? Management fee is another story, as I believe that it should not be a big profit center for large hedge funds that earn incentive fees too. Finally I believe that hedge funds should provide hurdle rates equal to the 10-year risk-free return with high-water marks and no gates.

I am very proud of my accomplishments and success at Paix et Prospérité over the last three years and want to personally thank our investors and all of you who have read my blogs week after week. I hope that it has created real value for you as it does for me. Keep the comments and questions coming.

Finally I want to suggest that all of you listen to or read the transcripts of year-end results for all the companies that you are interested in investing in. Managements are discussing their goals for the following year along with their strategies for the future. It is clear that business has improved since Trump’s election, as there is a sound of optimism that I have not heard for years. The order books show it too.  Even if you don’t approve of Trump’s tactics, his strategy to “Make America Great Again” is being heard everywhere and spirits are rising.

Remember to review all the facts; pause, reflect, be patient and consider mindset shifts; adjust your capital allocation and risk controls; do in-depth independent research and…

Invest Accordingly!

Bill Ehrman Paix et Prospérité LLC

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New world news from Time: These Syrian Refugees Made It to Europe. But There Still Isn’t an Answer to the Crisis

Seven-year-old Syrian refugee Wael Alsaleh only just started second grade in the Greek city of Thessaloniki, and he still doesn’t understand much of what his peers say. But the minute his teacher announces, in Greek, that it’s time to color, he reaches for the paper and markers, and launches into his favorite image of a tall, colorful house surrounded by green grass, trees and a smiling sun. He’s probably drawn 50 of those houses since he started school in October, says his teacher, Maria Liberi. “It’s not complicated,” she says when asked to interpret his drawings. “I think he’s really longing for a home.”

Wael’s family has been on the move for the past five years, ever since his mother scooped him out of bed one night to escape a bombing raid on his village outside of Deir ez-Zor in 2012. They hopscotched through refugee camps and temporary shelters scattered across Syria, Turkey and Greece. Since August, the family of seven has been living in a three-bedroom apartment located across the street from the school and paid for by the United Nations’ refugee body, UNHCR. For the first time, Wael, a pensive introvert whose quiet calm visibly separates him from his more rambunctious siblings, can go to school. He has a lot of catching up to do, says his teacher, “but he’s bright and determined. Give him stability and he will do just fine.”

Stability is not in Wael’s future. After nearly two years of struggling to find a foothold in Europe, his parents have just found out that they will be granted asylum in Greece. But what should be cause for celebration is rapidly turning into trepidation. A lawyer has told them that once they get their papers, they will be treated like any other Greek resident. They will have to move out of their UNHCR-funded apartment, and they will no longer be eligible for the monthly €550 ($646) in asylum-seeker benefits that have sustained the family for the past several months. Wael’s father Minhel Alsaleh, 39, an illiterate farmer who can barely speak Greek, will have to find a job in a nation with a 21% unemployment rate. “We have no choice,” he says. “We will have to leave.” Leave for where? “Germany. Where there are jobs. We will become refugees again.”

The fact that a family of Syrian refugees who waited nearly two years to get asylum in Europe is now contemplating uprooting itself once again raises the urgent question of just how much progress the E.U. has made in managing the influx of migrants that have arrived on its shores since 2015. That year, Europe witnessed chaotic scenes of thousands of migrants coming ashore on beaches and massing at unsecured borders. German Chancellor Angela Merkel, incensed by the images of starving migrants living in squalid camps on European soil, pledged that any Syrian who could make it to Germany could apply for asylum there, effectively reversing a long-standing E.U. regulation that refugees must claim asylum in the country of first arrival. The resulting surge of migrants crossing Eastern Europe strained border controls, prompting fears that Islamist militants could use the turmoil as cover to slip, unnoticed, into European capitals.

Lynsey Addario—Verbatim for TIME

The number of new arrivals did not itself pose an existential threat; even at its peak in 2015, when a million people landed on Greek and Italian shores, the desperate newcomers numbered less than half a percent of the E.U.’s population. But populist movements capitalized on the demographic panic, and anti-migrant rhetoric became their rallying cry. The crisis played into the Brexit vote in 2016 and coursed through elections in Holland, France and Germany this year. Even when Europe’s new nativists didn’t gain power in legislative elections, they succeeded in pushing centrist parties to the right. As a result, nationalistic causes are entering the mainstream, and threatening the very identity of an E.U. forged from the ashes of a war over competing nationalisms. “This crisis has, in its way, become Europe’s Sept. 11,” says Ivan Krastev, a Vienna-based political scientist and the author of After Europe, which explores the future of the union, “in that it has fundamentally altered how Europe’s citizens look at the world.”

The crisis is not over. Although the numbers of asylum seekers reaching Europe have slowed to a fraction of the 2015 arrivals through a combination of deterrence measures, detentions and deportations, more than 163,000 migrants and asylum seekers still arrived by sea in 2017. More than 3,000 died in the attempt. The E.U. as a whole has yet to come up with a solution. Over two years after the image of a drowned Syrian toddler on a Turkish beach ricocheted around the world as an indelible reminder of the cost of human desperation, migrants are still dying in the Mediterranean. Some 200,000 asylum seekers and migrants are still warehoused in abysmal conditions in Greece and Italy, awaiting resolution for their cases. If European leaders can’t overcome this seemingly intractable problem, the 28-nation bloc is likely to face an even greater crisis in the near future, says Gerald Knaus, founder of the Berlin-based European Stability Initiative, a policy-analysis organization. “If the E.U. cannot make a success of this, then all the other steps it is taking to manage migration are doomed.”

In early 2016, three families joined tens of thousands of others crossing the Aegean Sea in one of the biggest refugee movements in modern history. For the past 18 months, TIME has been following them as part of its Finding Home project, as each brought a new child into the world. At the time of their departure from the Turkish coast, the families had hopes of joining at least half a million other refugees from Syria who had found safety in northern Europe. Instead, they and 60,000 other migrants were trapped in Greece when E.U. leaders shut the land borders in an attempt to put a stop to the irregular flow of migrants northward.

The families were housed in Greek refugee camps, waiting to be sent to a secondary European country under the quota system introduced in September 2015. To alleviate the burden on Greece, a country already in dire economic straits, the E.U. planned to distribute the asylum seekers among member states, rather than enforce the historic rules that said migrants could apply for asylum only in the member state where they first set foot.

The “relocation program,” as it was called, was a stopgap measure that proved hugely unpopular, among both the refugees and the countries tasked with taking them in. Asylum seekers had no say in where they might be sent, and the application process took up to two years. Meanwhile, the migrants were in a constant state of upheaval as the Greek government shuttled them through a series of camps and temporary shelters in search of adequate housing.

As well as being unpopular, the program has been ineffective. By the time it formally concluded in September, only 21,531 asylum seekers had been relocated, even though 63,000 spaces had been promised by member states through the quota system. (A similar program for arrivals in Italy saw only 10,844 placements out of 35,000 spots.) “It would be a struggle to find anyone who would claim the E.U. relocation program is working on any level,” says Katy Long, a writer and researcher on migration issues and an honorary fellow at the University of Edinburgh. The E.U. blames issues of eligibility for the shortfall.

All three of the Finding Home families were eventually relocated, but the results differed wildly from the intended outcomes. Throughout the year, TIME has reported on their struggles to navigate Europe’s shambolic decisionmaking on refugee affairs.

The first of the three families, Nourelhuda Altallaa, 25, Yousef Alarsan, 27, and their infant daughter Rahaf, were relocated to Germany in July, but even after spending six months in temporary housing, they are still awaiting a final decision on whether they will be allowed to stay, and if so, for how long. After throwing open its doors to refugees in 2015, Germany is now seeing a political backlash. Merkel is struggling to form a coalition in the wake of elections that brought a populist far-right party–Alternative for Germany (AfD)–to Parliament for the first time in Germany’s postwar history, largely on the back of an anti-immigrant campaign. Talks have broken down over whether to put a cap on the number of refugees Germany will take in, and how long they will be able to stay. Even members of Merkel’s party, the Christian Democratic Union, are considering parts of the AfD’s call to repatriate Syrian refugees, saying the war in Syria is nearly over.

Wael’s family was at first assigned to Lithuania but ultimately rejected on unspecified security grounds–the only justification a reluctant E.U. member state has for refusing to take refugees it never wanted in the first place. Once rejected, Wael’s family had no choice but to apply for asylum in Greece, even though they knew they were unlikely to stay there.

A third family was granted asylum in Estonia, but it too fled for Germany in the hopes of finding a bigger community of Syrians, better opportunities and a more welcoming environment. There is no Europe-wide accounting of what is called secondary movement for relocated refugees, but in Estonia more than half of arrivals from Greece eventually left for elsewhere in the E.U. In Lithuania, it was two-thirds. In neighboring Latvia, all of them left.

The reasons are varied: refugees in remote areas or countries feel isolated; others want to join family elsewhere. The benefits on offer vary wildly, reflecting the local economy and attitudes toward integration. Secondary movement puts an unfair burden on popular destinations, like Germany and Sweden, while countries that resent the E.U. quota system do little to integrate their refugees and happily look the other way when they leave.

The problem lies in one of the foundational tenets of the E.U.: open borders. The Schengen Agreement, in place since 1995, allows for passport-free travel across 26 countries. As the E.U. expanded, so did the Schengen area, but many of the newer member states are suspicious of the bloc’s values, says Elizabeth Collett, founding director of Migration Policy Institute Europe, a Brussels-based research institute. These mainly Eastern European states have less capacity in their asylum systems and negative attitudes about immigration, and offer less help with integration.

The refugee crisis has driven a wedge between these smaller, newer states and the larger, mainly Western ones. Many of the former have only grudgingly accepted the quotas set by the E.U.; Hungary, Poland and Slovakia have refused to take in any refugees at all. Hungary’s Prime Minister Viktor Orban has become one of the most outspoken critics of the E.U.-wide migrant policy, building a border fence and demanding that would-be migrants be processed in Africa or Turkey, rather than in Europe. In September, the E.U. Court of Justice ruled that the three countries would have to abide by the quota. Only Slovakia has acquiesced.

E.U. member states are now in the process of negotiating a more workable system. A new law, proposed by the body’s executive in May, aims to make it easier for migrants to enter legally, in order to discourage the use of smuggling routes. Meanwhile, it wants to strike deals with countries in the Middle East and Africa to take back failed asylum seekers and forge a more permanent quota system. Germany is a strong supporter of the proposal, largely because Merkel needs to demonstrate to her people that the country is not being unfairly burdened. French President Emmanuel Macron is also onboard. But the split between large and small still exists; countries like Hungary and Poland do not want their migration policies to be imposed from Brussels or Berlin, and instead want to toughen border controls.

Refugee advocates call for a more liberalized approach–a human response to what has been treated as a logistical challenge. To start with, says Collett, the application process should take into account the desires of the refugees themselves. But that will have to be accompanied by a much stronger education effort, so that applicants are better informed about the destination countries. At the same time, says Knaus, relocated refugees must be guaranteed roughly comparable living conditions wherever they go, including access to education, health care and a path to citizenship, which is not currently the case. “If I could keep my apartment and my benefits, I wouldn’t need to go to Germany,” says Alsaleh. “Greece has been very good to us, but without the benefits, it’s impossible to stay.”

That may sound costly, but the E.U., through its partners in Greece, Germany and Estonia, spent an average of €800 ($938) per month for each of the Finding Home families to cover shelter, relocation travel, health care, meals and living stipends as their asylum claims were processed. A more streamlined system could free up funds to support successful applicants like Alsaleh long enough for him to stand on his own feet in Greece.

If the E.U. is to build an asylum system that works, it will need to be built to last. The surge in migrants over the past three years is not a trend, analysts say, but a preview of what is to come as regional conflicts evolve and climate change starts driving people from the Middle East and northern Africa. The International Organization for Migration warns that climate change will cause a “substantial rise in the scale of migration and displacement.”

First, Europe must examine its standards for what constitutes a refugee. Right now, Syrians are widely considered to be refugees and are accorded some degree of protection. But those fleeing Afghanistan, a country that has been at war for most of the past 37 years, are increasingly considered to be economic migrants, and Germany is already sending some back. The urgency of the 2015 crisis has blurred the lines between migrant and refugee, says Krastev, the political scientist. As the nature of conflict changes, Europe may have to rethink its definitions, and response. “We are living in a world in which potentially there are hundreds of millions of people who could defend the fact that they are refugees–from war, yes, but also from sexual violence, from climate change, from anti-homosexual persecution, from religious crackdowns,” he says. “How are we going to treat the first climate-change refugees that show up in Europe? As refugees? As labor migrants?”

It must also think long-term. Asylum is considered a temporary refuge from danger, even though instability in many regions of the world can last for decades. Yet many countries are moving in the opposite direction. When refugees from Syria first started arriving in Sweden and Germany, both countries offered full refugee status, which includes the right to permanent residency and a path to citizenship. Now, because of political pressures, Germany offers only so-called subsidiary protection to Syrian refugees–which lasts up to three years and denies many the right to bring over close family members. This may become even less liberal as Merkel seeks to build a coalition between political parties that differ on refugee integration. Even members of her own party have suggested that some Syrian refugees might be able to return home in 2018, citing a pending peace deal negotiated by Russia and Iran.

Altallaa and Alarsan, who were relocated to Germany, say they intend to return home as soon as the war ends. But that statement belies the realities of a shattered country that will take years to rebuild, even under the best circumstances. If European governments want to reverse the flow of refugees, they will have to make it easier for them to go home. And one of the best ways to do that is to offer them long-term residency in the country of asylum, says migration expert Long. It may seem paradoxical, but her research shows that refugees are much more willing to risk returning home to rebuild when they know they have a fallback if war breaks out again. “Giving a refugee permanent status somewhere else actually makes them far more likely to return home in the first months and years of a peace process, because they know they have an exit route,” she says. “They won’t have to get back on a smuggler’s boat if things go wrong.”

Even as E.U. leaders struggle to define a comprehensive policy, the crisis continues to cast a shadow on the continent. Populist politicians across the board are calling for a fresh crackdown on migration. Hungary’s Orban, inspired by Australia’s draconian policy, wants to withhold asylum from any migrant caught illegally entering Europe. This vision of Fortress Europe is gaining currency, and if far-right parties perform well in Italy’s elections next year, it could spread there too. This can be effective, to judge by the declining numbers of arrivals. But at what cost? At least some of the reduction is attributable to a dubious E.U. deal with Libyan mercenaries to prevent would-be migrants from departing the North African coast on smugglers’ boats. Instead, they end up in detention centers where they are abused, tortured, held for ransom and even sold as slaves.

The debate over how to handle migration isn’t going to end Europe, but it will define it. Stricter policies could mean more dead bodies washing up on Europe’s beaches. More liberal ones, if managed badly, could further embolden far-right agendas. “This really is a battle over the soul of Europe,” says Knaus. “If we can show that it is possible to not only reduce arrivals but to reduce the number of deaths in the Mediterranean, while also treating those who arrive decently and allowing them to successfully integrate into society, we can achieve so much more for Europe as a whole.”

Not just for Europe, but for the lives of those who come seeking refuge and a new life free from fear, from tyranny and from war. The refugee crisis may be a political challenge, but it is one that plays out on a human scale. Wael did not choose to leave his home in Syria, and his parents would not take him out of the only school he has ever known if they felt they had a choice. Like the other children TIME has been following over the past year and a half, Wael is a member of Europe’s Generation Refugee. One that, by accident of history or confluence of world events, will only grow in the years and decades to come. What they experience now may, in the end, shape Europe’s future.

–With reporting by IRENE LIOUMI and ABEER ALBADAWI/THESSALONIKI; LAMIS ALJASEM/VERL; and BILLY PERRIGO/LONDON

Reporting for this project is supported by a grant from the Pulitzer Center on Crisis Reporting and Merck for Mothers (known as MSD for Mothers outside of the U.S. and Canada)

Experience our Finding Home multimedia package at time.com/finding-home

This appears in the December 25, 2017 issue of TIME. December 18, 2017 at 09:43PM ClusterAssets Inc., https://ClusterAssets.wordpress.com https://ClusterAssets.tk

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Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Over 30 years, Copa CEO Pedro Heilbron has turned the airline from a tiny regional player into one of the most profitable carrier sin the Americas. Copa Airlines

Skift Take: Panama's Copa Airlines is not well-known in most of North America, but it's among the most profitable airlines in the Americas. Its secret? Like Southwest Airlines, it keeps its model simple.

— Brian Sumers

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, as well as our CMO series across verticals, we’ve launched another series, this time focused on the CEOs of leading airlines outside of the United States. To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights. Read the rest of the series here.

This is the latest interview in the series.

In the last year, Copa Airlines’ stock price has more than doubled, rising roughly 135 percent on the New York Stock Exchange.

What do investors know that casual flyers might not?

Panama’s flag carrier is among the best-run — and most consistently profitable — carriers in the Americas, even though its home country does not have one the region’s overall largest economies. In the first quarter, Copa reported net income of $102 million with an operating margin of 19 percent. Last year, its net income was $339.8 million, with a 12.4 percent margin.

The airline’s model is simple. Copa relies on a well-placed hub in Panama City to connect passengers between most destinations in the Americas. Through what it calls “the hub of the Americas,” Copa carries passengers between places like New Orleans, and Manaus, Brazil, or from Cordoba, Argentina to Havana. In all, the airline flies to more than 70 destinations in the Americas, including big ones, like New York and Mexico City, and smaller ones, like San Pedro Sula, Costa Rica.

Copa flies only two types of single-aisle plane types, the Embraer E190, and the Boeing 737. It flies its Boeing 737s longer than most airlines, sometimes flying them for nearly seven hours, including from Panama City to Buenos Aires. But the aircraft is fuel-efficient, and like Southwest Airlines, an all-737 operator, Copa can control costs by sticking to one aircraft type for longer routes.

To be sure, Copa has struggled. Some of its money is trapped in Venezuela, with the government refusing to permit airlines to repatriate funds from ticket sales. Late last year, Bloomberg reported Copa still had almost $500 million stuck in the country. And like most Latin American airlines, Copa has stumbled as some of the region’s largest economies, including Brazil, have faltered. But the macroeconomic climate in South America is improving.

In early June, we met with Copa CEO Pedro Heilbron at the IATA Annual General Meeting in Cancun, an annual conference for airline executives. Heilbron became CEO in 1988, when Copa was a tiny regional airline. Today, its main Panama operation has 84 planes, and a network that stretches as far north as Montreal and as far south as Buenos Aires.

We asked him why Copa does not want to fly to Europe, and why it has little interest in larger airplanes or flatbed business class seats. We also asked about Copa’s recent decision to create a frequent flyer program from scratch.

Note: This interview has been edited for length and clarity. 

Skift: Why is Panama the right place for an international hub connecting North and South America? Why has it been so successful?

Pedro Heilbron: A few things. First, we’ve been building this hub for over 20 years so whatever we see today — a large and successful inter-America hub — is not something that happened overnight. It started small and it has grown over the years.

Now, why is it such a great hub? No. 1 is geography. There’s no country in the Americas with better geographic position than Panama. It sits right in the middle of the Americas. It’s also the way the isthmus of Panama bends. It’s a good position to connect not only north with south and central, but also the Caribbean connects very well from Panama because we’re very close to many Caribbean destinations and again right in the middle.

Secondly, the airport in Panama city is at sea level with no major obstacles, in a region that is full of high and hot airports, with mountains. Aircraft perform much better at sea level and without obstacles.

And [third], the government of Panama over the years has come to realize the importance of aviation for the economic and social development of the country. That has resulted in investments in the right infrastructure. We don’t have to work very hard to convince our government that it’s important to grow airport infrastructure, for example. So we’ve had more gates than most of the airports in our region — even airports that serve cities many times our size.

Skift: You’ve been growing in the United States. Later this year, Denver will be your 13th destination. Why do you see opportunity?

Heilbron: Panama’s economy has been growing for a number of years but that’s just part of the reason why we fly to so many cities in the U.S. [We want to] connect the most cities throughout Latin America with [North America].

[We connect] the major cities, which in some cases have enough service and don’t really need us, but we also tie the major cities of South America and Central America with secondary cities in the U.S. that lack connectivity to our region. We also connect a lot of secondary cities [in Latin America] with large and secondary cities in the U.S. and that’s something unique about our hub. Plus, it’s very easy to connect in Panama. You, you don’t have to go again through immigration and customs, so you can go gate to gate.

Skift: Has there been a Trump effect? Are some travelers from Latin America preferring not to visit the United States?

Heilbron: No, not at all. We have not seen a Trump effect. Latins are flying, as always. None of that has been affected by the change of government in the U.S. and we don’t really see a reason why it should be affected.

Skift: You’re one of the only airlines in recent years to create a frequent flyer program from scratch. Before 2015, you used Continental OnePass and United MileagePlus. Why make the change?

Heilbron: [The reason for using the Continental and United programs] goes back to 1998, when we signed a unique and comprehensive alliance with Continental. Continental bought 49 percent of Copa, which they later sold when we went public. At that time, we adopted OnePass as our frequent flyer program and we got rid of the program we had before which was really small and not world-class level, like OnePass was back then. That brought great advantages. And when Continental became United, we transitioned from OnePass to MileagePlus.

But from 1998 to 2015, when we came out with our own program, Copa changed quite a bit. The Copa of 1998-99 was very different to the Copa of today. We are much larger today, so we got to a point where it made a lot of sense to have our own program and be able to control the future, to better compete against other programs in our region.

It has allowed us to know our members better and and communicate directly with them and serve them in way that suits their specific needs. We maintain full reciprocity with MileagePlus and United. We’re in the same Star Alliance, plus we have our own bilateral relationship, which is very strong. Maybe it’s the best of both worlds.

Skift: Do you have better data about your customers now?

Heilbron: Well, whatever data we had before, and whatever communication we had with our members, had to be done through United and approved by United. We could not manipulate and manage the data in any way we wanted because it was not our data. We could ask for reports.

But now we can do whatever we want with that data. So there would be like an infinite number of examples of the things we can do today [that we couldn’t before.] Now, we have a lot more flexibility.

Skift: Before, if you wanted to know my flying patterns, you had to ask United?

Heilbron: Yeah. MileagePlus was their program and our frequent flyers were theirs and our data resided in their system. They would have to give us the report we needed, which is much different to having our people with full access to the data and just running a new report and then using that for communicating offers, for whatever.

Skift: Let’s talk about passenger experience. You fly some of the longest Boeing 737 routes in the world, like Panama City to Buenos Aires, at seven hours. Yet, your most generous business class seat is a recliner with only 50 inches of pitch. Why not try flat beds?

Heilbron: Our business class is more similar to the BusinessFirst of the past [from Continental Airlines]. There’s more recline [and] there are foot rests and the whole thing. But it doesn’t go all the way down to flat. The reason we do it that way is because our fleet rotates everywhere, so we need to combine [having] more comfort on our long hauls with the efficiency we get from [having the same plane] fly a very short haul. We don’t want an aircraft that’s configured just for one market.

We actually do have two fleet types. We have a fleet that has what we call a premium business class, which we use for the longer hauls and then the more densified business class, for the rest of our system. But still the aircraft might get mixed and, and there are some shorter hauls that have to be flown by our premium configuration. It gives us a lot more flexibility.

Skift: You’ll soon add the Boeing 737 Max, with more range than 737s in your fleet. Will you fly longer routes?

Heilbron: First, we’re starting with a Max 9, and it will give us additional range. But we pretty much cover every city we want to fly to.

What it does for us, is that it takes away some [performance] restrictions we have on the [current generation Boeing 737-800.] That has an economic benefit. We’ll be able to carry more cargo or more passengers and not be weight restricted like we are today on some routes. That’s the big advantage. Obviously, plus lower operating costs.

Skift: What about widebodies, like the Boeing 787 or Airbus A330? Don’t you want to fly to Europe?

Heilbron: We’ve looked at widebodies even though it doesn’t fit our business model right now. We’re not looking to fly to Europe. We’re sticking to out 737 fleet serving the Americas, which we can serve very well with narrowbodies.

Skift: You serve food and alcohol on your flights. Why?

Heilbron: Good question! When we had our inaugural flight to Chicago, the chief flight attendant had to get on the PA and inform passengers, mainly Americans, that the food was included in the price. Because when the flight attendant came down the aisle with the food cart, many passengers were saying no thanks, thinking they had to pay for it.

So why do we do it? We’ve been very consistent over time in managing a tight operation. [But we don’t want to] have the big swings of, when we’re doing very well, we give out a lot, and when we do bad, we cut back. We stick to our business model and that includes the right meal service, depending on the flight length. And [with] free liquor at the right time of the day, we try to be very rational. Over 95 percent of our flying is international and it’s something we’re known for. One way or another it’s in the price.

We do give out free meals and free alcohol but in everything else we do, we’re very cost conscious. We have one of the lowest unit costs of any full service airline in Latin America. I’m not even comparing to other parts of the world.

Skift: There aren’t as many low cost carriers in Latin America as elsewhere in the world. But don’t you worry that someday an airline will undercut you on price, but not serve free meals? And customers will choose the cheaper option?

Heilbron: Well, you know the day that becomes a big issue, we’ll deal with it. I’m not saying that we’re going to stick to this our whole life. When we have to compete strictly on price, then we’ll consider that. Most of our competitors today have similar service and also have free meals and free alcohol.

Skift: Over time, do you expect we’ll see more discount airlines in Latin America?

Heilbron: I think that we will see more but I also believe that it won’t be like the U.S. and Europe. It will be very different, for a number of reasons. No. 1 is that the ULCCs, [or ultra low cost carriers], have shown to work much better in open markets with traffic that can be stimulated, with low airport taxes and airport fees. You find that mostly in the large domestic markets in Latin America like Mexico, Brazil, Colombia and others. That’s where ULCCs work best.

But when it comes to international flying, there are other factors that have to be considered. There’s no Open Skies [agreements between most Latin American governments], so you need to negotiate route rights, which are not always available. Even more than that, each base becomes a different country, which means a different operating certificate [for each country.] That’s costly and complicated, so it’s not like you can just move planes around and fly any market. You have to comply with local laws in each country, including ownership laws and go through a complicated process, an expensive process.

[Also] airport taxes are really high in international markets and ULCCs depend on stimulating traffic with very low fares. But you might have a one hour and a half route, where the taxes are going be over $100.

When we combine all those factors, what we get out of that analysis is that there’s some domestic markets where ULCCs are working and others where [the model] may work in the future. There’re a few international markets where it will also work well. And then there are many other markets that cannot be stimulated, or are not large enough, or where the fees are too expensive.

We’ll see some more growth, but nothing like Europe, which is one European Union, or the U.S. which is one big country.

Skift: You have your own ULCC, called Wingo, based in Colombia. It’s essentially an airline that used to be a struggling full-service carrier called COPA Colombia. Has switching models helped you lose less money from that business segment?

Heilbron: Wingo has only six months of operations so it’s still a new thing. I would say that it’s doing better than expected. This year, we’re projecting losses for Wingo, so it’s losing less than what we’ve had projected. That’s a good thing.

Wingo basically replaced a network that does not touch our Panama hub. Its flights were operated by Copa Colombia before, under the same Copa business model type you know — free food, free liquor [and] traditional GDS [global distribution system] distribution. So Wingo is a new version of what we did under Copa Colombia, with no GDS [contracts], lower costs and densified planes. Very few things are free. It’s doing much better, which means losing less.

Skift: Let’s say Wingo is a big success. Might you bring some of what works to Copa?

Heilbron: It’s definitely like a test bed. What we’re going do with the knowledge we’ll get out of Wingo, I can’t tell you. But we are learning a lot and it will help. It’s interesting lesson for Copa, especially because that network was operated by Copa before under traditional GDS distribution and travel agencies and the whole thing. So we know how a market behaves one way and then when we change the business model how that exactly same market [performs]. [Do we] get more passengers at lower fares or do we get less passengers because we are no longer selling through travel agencies? All that information is very, very valuable as we think of how Copa needs to evolve in the future.

http://ift.tt/2rlhzBb

[hughessherryma]

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Over 30 years, Copa CEO Pedro Heilbron has turned the airline from a tiny regional player into one of the most profitable carrier sin the Americas. Copa Airlines

Skift Take: Panama's Copa Airlines is not well-known in most of North America, but it's among the most profitable airlines in the Americas. Its secret? Like Southwest Airlines, it keeps its model simple.

— Brian Sumers

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, as well as our CMO series across verticals, we’ve launched another series, this time focused on the CEOs of leading airlines outside of the United States. To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights. Read the rest of the series here.

This is the latest interview in the series.

In the last year, Copa Airlines’ stock price has more than doubled, rising roughly 135 percent on the New York Stock Exchange.

What do investors know that casual flyers might not?

Panama’s flag carrier is among the best-run — and most consistently profitable — carriers in the Americas, even though its home country does not have one the region’s overall largest economies. In the first quarter, Copa reported net income of $102 million with an operating margin of 19 percent. Last year, its net income was $339.8 million, with a 12.4 percent margin.

The airline’s model is simple. Copa relies on a well-placed hub in Panama City to connect passengers between most destinations in the Americas. Through what it calls “the hub of the Americas,” Copa carries passengers between places like New Orleans, and Manaus, Brazil, or from Cordoba, Argentina to Havana. In all, the airline flies to more than 70 destinations in the Americas, including big ones, like New York and Mexico City, and smaller ones, like San Pedro Sula, Costa Rica.

Copa flies only two types of single-aisle plane types, the Embraer E190, and the Boeing 737. It flies its Boeing 737s longer than most airlines, sometimes flying them for nearly seven hours, including from Panama City to Buenos Aires. But the aircraft is fuel-efficient, and like Southwest Airlines, an all-737 operator, Copa can control costs by sticking to one aircraft type for longer routes.

To be sure, Copa has struggled. Some of its money is trapped in Venezuela, with the government refusing to permit airlines to repatriate funds from ticket sales. Late last year, Bloomberg reported Copa still had almost $500 million stuck in the country. And like most Latin American airlines, Copa has stumbled as some of the region’s largest economies, including Brazil, have faltered. But the macroeconomic climate in South America is improving.

In early June, we met with Copa CEO Pedro Heilbron at the IATA Annual General Meeting in Cancun, an annual conference for airline executives. Heilbron became CEO in 1988, when Copa was a tiny regional airline. Today, its main Panama operation has 84 planes, and a network that stretches as far north as Montreal and as far south as Buenos Aires.

We asked him why Copa does not want to fly to Europe, and why it has little interest in larger airplanes or flatbed business class seats. We also asked about Copa’s recent decision to create a frequent flyer program from scratch.

Note: This interview has been edited for length and clarity. 

Skift: Why is Panama the right place for an international hub connecting North and South America? Why has it been so successful?

Pedro Heilbron: A few things. First, we’ve been building this hub for over 20 years so whatever we see today — a large and successful inter-America hub — is not something that happened overnight. It started small and it has grown over the years.

Now, why is it such a great hub? No. 1 is geography. There’s no country in the Americas with better geographic position than Panama. It sits right in the middle of the Americas. It’s also the way the isthmus of Panama bends. It’s a good position to connect not only north with south and central, but also the Caribbean connects very well from Panama because we’re very close to many Caribbean destinations and again right in the middle.

Secondly, the airport in Panama city is at sea level with no major obstacles, in a region that is full of high and hot airports, with mountains. Aircraft perform much better at sea level and without obstacles.

And [third], the government of Panama over the years has come to realize the importance of aviation for the economic and social development of the country. That has resulted in investments in the right infrastructure. We don’t have to work very hard to convince our government that it’s important to grow airport infrastructure, for example. So we’ve had more gates than most of the airports in our region — even airports that serve cities many times our size.

Skift: You’ve been growing in the United States. Later this year, Denver will be your 13th destination. Why do you see opportunity?

Heilbron: Panama’s economy has been growing for a number of years but that’s just part of the reason why we fly to so many cities in the U.S. [We want to] connect the most cities throughout Latin America with [North America].

[We connect] the major cities, which in some cases have enough service and don’t really need us, but we also tie the major cities of South America and Central America with secondary cities in the U.S. that lack connectivity to our region. We also connect a lot of secondary cities [in Latin America] with large and secondary cities in the U.S. and that’s something unique about our hub. Plus, it’s very easy to connect in Panama. You, you don’t have to go again through immigration and customs, so you can go gate to gate.

Skift: Has there been a Trump effect? Are some travelers from Latin America preferring not to visit the United States?

Heilbron: No, not at all. We have not seen a Trump effect. Latins are flying, as always. None of that has been affected by the change of government in the U.S. and we don’t really see a reason why it should be affected.

Skift: You’re one of the only airlines in recent years to create a frequent flyer program from scratch. Before 2015, you used Continental OnePass and United MileagePlus. Why make the change?

Heilbron: [The reason for using the Continental and United programs] goes back to 1998, when we signed a unique and comprehensive alliance with Continental. Continental bought 49 percent of Copa, which they later sold when we went public. At that time, we adopted OnePass as our frequent flyer program and we got rid of the program we had before which was really small and not world-class level, like OnePass was back then. That brought great advantages. And when Continental became United, we transitioned from OnePass to MileagePlus.

But from 1998 to 2015, when we came out with our own program, Copa changed quite a bit. The Copa of 1998-99 was very different to the Copa of today. We are much larger today, so we got to a point where it made a lot of sense to have our own program and be able to control the future, to better compete against other programs in our region.

It has allowed us to know our members better and and communicate directly with them and serve them in way that suits their specific needs. We maintain full reciprocity with MileagePlus and United. We’re in the same Star Alliance, plus we have our own bilateral relationship, which is very strong. Maybe it’s the best of both worlds.

Skift: Do you have better data about your customers now?

Heilbron: Well, whatever data we had before, and whatever communication we had with our members, had to be done through United and approved by United. We could not manipulate and manage the data in any way we wanted because it was not our data. We could ask for reports.

But now we can do whatever we want with that data. So there would be like an infinite number of examples of the things we can do today [that we couldn’t before.] Now, we have a lot more flexibility.

Skift: Before, if you wanted to know my flying patterns, you had to ask United?

Heilbron: Yeah. MileagePlus was their program and our frequent flyers were theirs and our data resided in their system. They would have to give us the report we needed, which is much different to having our people with full access to the data and just running a new report and then using that for communicating offers, for whatever.

Skift: Let’s talk about passenger experience. You fly some of the longest Boeing 737 routes in the world, like Panama City to Buenos Aires, at seven hours. Yet, your most generous business class seat is a recliner with only 50 inches of pitch. Why not try flat beds?

Heilbron: Our business class is more similar to the BusinessFirst of the past [from Continental Airlines]. There’s more recline [and] there are foot rests and the whole thing. But it doesn’t go all the way down to flat. The reason we do it that way is because our fleet rotates everywhere, so we need to combine [having] more comfort on our long hauls with the efficiency we get from [having the same plane] fly a very short haul. We don’t want an aircraft that’s configured just for one market.

We actually do have two fleet types. We have a fleet that has what we call a premium business class, which we use for the longer hauls and then the more densified business class, for the rest of our system. But still the aircraft might get mixed and, and there are some shorter hauls that have to be flown by our premium configuration. It gives us a lot more flexibility.

Skift: You’ll soon add the Boeing 737 Max, with more range than 737s in your fleet. Will you fly longer routes?

Heilbron: First, we’re starting with a Max 9, and it will give us additional range. But we pretty much cover every city we want to fly to.

What it does for us, is that it takes away some [performance] restrictions we have on the [current generation Boeing 737-800.] That has an economic benefit. We’ll be able to carry more cargo or more passengers and not be weight restricted like we are today on some routes. That’s the big advantage. Obviously, plus lower operating costs.

Skift: What about widebodies, like the Boeing 787 or Airbus A330? Don’t you want to fly to Europe?

Heilbron: We’ve looked at widebodies even though it doesn’t fit our business model right now. We’re not looking to fly to Europe. We’re sticking to out 737 fleet serving the Americas, which we can serve very well with narrowbodies.

Skift: You serve food and alcohol on your flights. Why?

Heilbron: Good question! When we had our inaugural flight to Chicago, the chief flight attendant had to get on the PA and inform passengers, mainly Americans, that the food was included in the price. Because when the flight attendant came down the aisle with the food cart, many passengers were saying no thanks, thinking they had to pay for it.

So why do we do it? We’ve been very consistent over time in managing a tight operation. [But we don’t want to] have the big swings of, when we’re doing very well, we give out a lot, and when we do bad, we cut back. We stick to our business model and that includes the right meal service, depending on the flight length. And [with] free liquor at the right time of the day, we try to be very rational. Over 95 percent of our flying is international and it’s something we’re known for. One way or another it’s in the price.

We do give out free meals and free alcohol but in everything else we do, we’re very cost conscious. We have one of the lowest unit costs of any full service airline in Latin America. I’m not even comparing to other parts of the world.

Skift: There aren’t as many low cost carriers in Latin America as elsewhere in the world. But don’t you worry that someday an airline will undercut you on price, but not serve free meals? And customers will choose the cheaper option?

Heilbron: Well, you know the day that becomes a big issue, we’ll deal with it. I’m not saying that we’re going to stick to this our whole life. When we have to compete strictly on price, then we’ll consider that. Most of our competitors today have similar service and also have free meals and free alcohol.

Skift: Over time, do you expect we’ll see more discount airlines in Latin America?

Heilbron: I think that we will see more but I also believe that it won’t be like the U.S. and Europe. It will be very different, for a number of reasons. No. 1 is that the ULCCs, [or ultra low cost carriers], have shown to work much better in open markets with traffic that can be stimulated, with low airport taxes and airport fees. You find that mostly in the large domestic markets in Latin America like Mexico, Brazil, Colombia and others. That’s where ULCCs work best.

But when it comes to international flying, there are other factors that have to be considered. There’s no Open Skies [agreements between most Latin American governments], so you need to negotiate route rights, which are not always available. Even more than that, each base becomes a different country, which means a different operating certificate [for each country.] That’s costly and complicated, so it’s not like you can just move planes around and fly any market. You have to comply with local laws in each country, including ownership laws and go through a complicated process, an expensive process.

[Also] airport taxes are really high in international markets and ULCCs depend on stimulating traffic with very low fares. But you might have a one hour and a half route, where the taxes are going be over $100.

When we combine all those factors, what we get out of that analysis is that there’s some domestic markets where ULCCs are working and others where [the model] may work in the future. There’re a few international markets where it will also work well. And then there are many other markets that cannot be stimulated, or are not large enough, or where the fees are too expensive.

We’ll see some more growth, but nothing like Europe, which is one European Union, or the U.S. which is one big country.

Skift: You have your own ULCC, called Wingo, based in Colombia. It’s essentially an airline that used to be a struggling full-service carrier called COPA Colombia. Has switching models helped you lose less money from that business segment?

Heilbron: Wingo has only six months of operations so it’s still a new thing. I would say that it’s doing better than expected. This year, we’re projecting losses for Wingo, so it’s losing less than what we’ve had projected. That’s a good thing.

Wingo basically replaced a network that does not touch our Panama hub. Its flights were operated by Copa Colombia before, under the same Copa business model type you know — free food, free liquor [and] traditional GDS [global distribution system] distribution. So Wingo is a new version of what we did under Copa Colombia, with no GDS [contracts], lower costs and densified planes. Very few things are free. It’s doing much better, which means losing less.

Skift: Let’s say Wingo is a big success. Might you bring some of what works to Copa?

Heilbron: It’s definitely like a test bed. What we’re going do with the knowledge we’ll get out of Wingo, I can’t tell you. But we are learning a lot and it will help. It’s interesting lesson for Copa, especially because that network was operated by Copa before under traditional GDS distribution and travel agencies and the whole thing. So we know how a market behaves one way and then when we change the business model how that exactly same market [performs]. [Do we] get more passengers at lower fares or do we get less passengers because we are no longer selling through travel agencies? All that information is very, very valuable as we think of how Copa needs to evolve in the future.

http://ift.tt/2rlhzBb

[isabellatrevinool42]

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Over 30 years, Copa CEO Pedro Heilbron has turned the airline from a tiny regional player into one of the most profitable carrier sin the Americas. Copa Airlines

Skift Take: Panama's Copa Airlines is not well-known in most of North America, but it's among the most profitable airlines in the Americas. Its secret? Like Southwest Airlines, it keeps its model simple.

— Brian Sumers

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, as well as our CMO series across verticals, we’ve launched another series, this time focused on the CEOs of leading airlines outside of the United States. To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights. Read the rest of the series here.

This is the latest interview in the series.

In the last year, Copa Airlines’ stock price has more than doubled, rising roughly 135 percent on the New York Stock Exchange.

What do investors know that casual flyers might not?

Panama’s flag carrier is among the best-run — and most consistently profitable — carriers in the Americas, even though its home country does not have one the region’s overall largest economies. In the first quarter, Copa reported net income of $102 million with an operating margin of 19 percent. Last year, its net income was $339.8 million, with a 12.4 percent margin.

The airline’s model is simple. Copa relies on a well-placed hub in Panama City to connect passengers between most destinations in the Americas. Through what it calls “the hub of the Americas,” Copa carries passengers between places like New Orleans, and Manaus, Brazil, or from Cordoba, Argentina to Havana. In all, the airline flies to more than 70 destinations in the Americas, including big ones, like New York and Mexico City, and smaller ones, like San Pedro Sula, Costa Rica.

Copa flies only two types of single-aisle plane types, the Embraer E190, and the Boeing 737. It flies its Boeing 737s longer than most airlines, sometimes flying them for nearly seven hours, including from Panama City to Buenos Aires. But the aircraft is fuel-efficient, and like Southwest Airlines, an all-737 operator, Copa can control costs by sticking to one aircraft type for longer routes.

To be sure, Copa has struggled. Some of its money is trapped in Venezuela, with the government refusing to permit airlines to repatriate funds from ticket sales. Late last year, Bloomberg reported Copa still had almost $500 million stuck in the country. And like most Latin American airlines, Copa has stumbled as some of the region’s largest economies, including Brazil, have faltered. But the macroeconomic climate in South America is improving.

In early June, we met with Copa CEO Pedro Heilbron at the IATA Annual General Meeting in Cancun, an annual conference for airline executives. Heilbron became CEO in 1988, when Copa was a tiny regional airline. Today, its main Panama operation has 84 planes, and a network that stretches as far north as Montreal and as far south as Buenos Aires.

We asked him why Copa does not want to fly to Europe, and why it has little interest in larger airplanes or flatbed business class seats. We also asked about Copa’s recent decision to create a frequent flyer program from scratch.

Note: This interview has been edited for length and clarity. 

Skift: Why is Panama the right place for an international hub connecting North and South America? Why has it been so successful?

Pedro Heilbron: A few things. First, we’ve been building this hub for over 20 years so whatever we see today — a large and successful inter-America hub — is not something that happened overnight. It started small and it has grown over the years.

Now, why is it such a great hub? No. 1 is geography. There’s no country in the Americas with better geographic position than Panama. It sits right in the middle of the Americas. It’s also the way the isthmus of Panama bends. It’s a good position to connect not only north with south and central, but also the Caribbean connects very well from Panama because we’re very close to many Caribbean destinations and again right in the middle.

Secondly, the airport in Panama city is at sea level with no major obstacles, in a region that is full of high and hot airports, with mountains. Aircraft perform much better at sea level and without obstacles.

And [third], the government of Panama over the years has come to realize the importance of aviation for the economic and social development of the country. That has resulted in investments in the right infrastructure. We don’t have to work very hard to convince our government that it’s important to grow airport infrastructure, for example. So we’ve had more gates than most of the airports in our region — even airports that serve cities many times our size.

Skift: You’ve been growing in the United States. Later this year, Denver will be your 13th destination. Why do you see opportunity?

Heilbron: Panama’s economy has been growing for a number of years but that’s just part of the reason why we fly to so many cities in the U.S. [We want to] connect the most cities throughout Latin America with [North America].

[We connect] the major cities, which in some cases have enough service and don’t really need us, but we also tie the major cities of South America and Central America with secondary cities in the U.S. that lack connectivity to our region. We also connect a lot of secondary cities [in Latin America] with large and secondary cities in the U.S. and that’s something unique about our hub. Plus, it’s very easy to connect in Panama. You, you don’t have to go again through immigration and customs, so you can go gate to gate.

Skift: Has there been a Trump effect? Are some travelers from Latin America preferring not to visit the United States?

Heilbron: No, not at all. We have not seen a Trump effect. Latins are flying, as always. None of that has been affected by the change of government in the U.S. and we don’t really see a reason why it should be affected.

Skift: You’re one of the only airlines in recent years to create a frequent flyer program from scratch. Before 2015, you used Continental OnePass and United MileagePlus. Why make the change?

Heilbron: [The reason for using the Continental and United programs] goes back to 1998, when we signed a unique and comprehensive alliance with Continental. Continental bought 49 percent of Copa, which they later sold when we went public. At that time, we adopted OnePass as our frequent flyer program and we got rid of the program we had before which was really small and not world-class level, like OnePass was back then. That brought great advantages. And when Continental became United, we transitioned from OnePass to MileagePlus.

But from 1998 to 2015, when we came out with our own program, Copa changed quite a bit. The Copa of 1998-99 was very different to the Copa of today. We are much larger today, so we got to a point where it made a lot of sense to have our own program and be able to control the future, to better compete against other programs in our region.

It has allowed us to know our members better and and communicate directly with them and serve them in way that suits their specific needs. We maintain full reciprocity with MileagePlus and United. We’re in the same Star Alliance, plus we have our own bilateral relationship, which is very strong. Maybe it’s the best of both worlds.

Skift: Do you have better data about your customers now?

Heilbron: Well, whatever data we had before, and whatever communication we had with our members, had to be done through United and approved by United. We could not manipulate and manage the data in any way we wanted because it was not our data. We could ask for reports.

But now we can do whatever we want with that data. So there would be like an infinite number of examples of the things we can do today [that we couldn’t before.] Now, we have a lot more flexibility.

Skift: Before, if you wanted to know my flying patterns, you had to ask United?

Heilbron: Yeah. MileagePlus was their program and our frequent flyers were theirs and our data resided in their system. They would have to give us the report we needed, which is much different to having our people with full access to the data and just running a new report and then using that for communicating offers, for whatever.

Skift: Let’s talk about passenger experience. You fly some of the longest Boeing 737 routes in the world, like Panama City to Buenos Aires, at seven hours. Yet, your most generous business class seat is a recliner with only 50 inches of pitch. Why not try flat beds?

Heilbron: Our business class is more similar to the BusinessFirst of the past [from Continental Airlines]. There’s more recline [and] there are foot rests and the whole thing. But it doesn’t go all the way down to flat. The reason we do it that way is because our fleet rotates everywhere, so we need to combine [having] more comfort on our long hauls with the efficiency we get from [having the same plane] fly a very short haul. We don’t want an aircraft that’s configured just for one market.

We actually do have two fleet types. We have a fleet that has what we call a premium business class, which we use for the longer hauls and then the more densified business class, for the rest of our system. But still the aircraft might get mixed and, and there are some shorter hauls that have to be flown by our premium configuration. It gives us a lot more flexibility.

Skift: You’ll soon add the Boeing 737 Max, with more range than 737s in your fleet. Will you fly longer routes?

Heilbron: First, we’re starting with a Max 9, and it will give us additional range. But we pretty much cover every city we want to fly to.

What it does for us, is that it takes away some [performance] restrictions we have on the [current generation Boeing 737-800.] That has an economic benefit. We’ll be able to carry more cargo or more passengers and not be weight restricted like we are today on some routes. That’s the big advantage. Obviously, plus lower operating costs.

Skift: What about widebodies, like the Boeing 787 or Airbus A330? Don’t you want to fly to Europe?

Heilbron: We’ve looked at widebodies even though it doesn’t fit our business model right now. We’re not looking to fly to Europe. We’re sticking to out 737 fleet serving the Americas, which we can serve very well with narrowbodies.

Skift: You serve food and alcohol on your flights. Why?

Heilbron: Good question! When we had our inaugural flight to Chicago, the chief flight attendant had to get on the PA and inform passengers, mainly Americans, that the food was included in the price. Because when the flight attendant came down the aisle with the food cart, many passengers were saying no thanks, thinking they had to pay for it.

So why do we do it? We’ve been very consistent over time in managing a tight operation. [But we don’t want to] have the big swings of, when we’re doing very well, we give out a lot, and when we do bad, we cut back. We stick to our business model and that includes the right meal service, depending on the flight length. And [with] free liquor at the right time of the day, we try to be very rational. Over 95 percent of our flying is international and it’s something we’re known for. One way or another it’s in the price.

We do give out free meals and free alcohol but in everything else we do, we’re very cost conscious. We have one of the lowest unit costs of any full service airline in Latin America. I’m not even comparing to other parts of the world.

Skift: There aren’t as many low cost carriers in Latin America as elsewhere in the world. But don’t you worry that someday an airline will undercut you on price, but not serve free meals? And customers will choose the cheaper option?

Heilbron: Well, you know the day that becomes a big issue, we’ll deal with it. I’m not saying that we’re going to stick to this our whole life. When we have to compete strictly on price, then we’ll consider that. Most of our competitors today have similar service and also have free meals and free alcohol.

Skift: Over time, do you expect we’ll see more discount airlines in Latin America?

Heilbron: I think that we will see more but I also believe that it won’t be like the U.S. and Europe. It will be very different, for a number of reasons. No. 1 is that the ULCCs, [or ultra low cost carriers], have shown to work much better in open markets with traffic that can be stimulated, with low airport taxes and airport fees. You find that mostly in the large domestic markets in Latin America like Mexico, Brazil, Colombia and others. That’s where ULCCs work best.

But when it comes to international flying, there are other factors that have to be considered. There’s no Open Skies [agreements between most Latin American governments], so you need to negotiate route rights, which are not always available. Even more than that, each base becomes a different country, which means a different operating certificate [for each country.] That’s costly and complicated, so it’s not like you can just move planes around and fly any market. You have to comply with local laws in each country, including ownership laws and go through a complicated process, an expensive process.

[Also] airport taxes are really high in international markets and ULCCs depend on stimulating traffic with very low fares. But you might have a one hour and a half route, where the taxes are going be over $100.

When we combine all those factors, what we get out of that analysis is that there’s some domestic markets where ULCCs are working and others where [the model] may work in the future. There’re a few international markets where it will also work well. And then there are many other markets that cannot be stimulated, or are not large enough, or where the fees are too expensive.

We’ll see some more growth, but nothing like Europe, which is one European Union, or the U.S. which is one big country.

Skift: You have your own ULCC, called Wingo, based in Colombia. It’s essentially an airline that used to be a struggling full-service carrier called COPA Colombia. Has switching models helped you lose less money from that business segment?

Heilbron: Wingo has only six months of operations so it’s still a new thing. I would say that it’s doing better than expected. This year, we’re projecting losses for Wingo, so it’s losing less than what we’ve had projected. That’s a good thing.

Wingo basically replaced a network that does not touch our Panama hub. Its flights were operated by Copa Colombia before, under the same Copa business model type you know — free food, free liquor [and] traditional GDS [global distribution system] distribution. So Wingo is a new version of what we did under Copa Colombia, with no GDS [contracts], lower costs and densified planes. Very few things are free. It’s doing much better, which means losing less.

Skift: Let’s say Wingo is a big success. Might you bring some of what works to Copa?

Heilbron: It’s definitely like a test bed. What we’re going do with the knowledge we’ll get out of Wingo, I can’t tell you. But we are learning a lot and it will help. It’s interesting lesson for Copa, especially because that network was operated by Copa before under traditional GDS distribution and travel agencies and the whole thing. So we know how a market behaves one way and then when we change the business model how that exactly same market [performs]. [Do we] get more passengers at lower fares or do we get less passengers because we are no longer selling through travel agencies? All that information is very, very valuable as we think of how Copa needs to evolve in the future.

http://ift.tt/2rlhzBb

[griffinandreatd]

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Over 30 years, Copa CEO Pedro Heilbron has turned the airline from a tiny regional player into one of the most profitable carrier sin the Americas. Copa Airlines

Skift Take: Panama's Copa Airlines is not well-known in most of North America, but it's among the most profitable airlines in the Americas. Its secret? Like Southwest Airlines, it keeps its model simple.

— Brian Sumers

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, as well as our CMO series across verticals, we’ve launched another series, this time focused on the CEOs of leading airlines outside of the United States. To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights. Read the rest of the series here.

This is the latest interview in the series.

In the last year, Copa Airlines’ stock price has more than doubled, rising roughly 135 percent on the New York Stock Exchange.

What do investors know that casual flyers might not?

Panama’s flag carrier is among the best-run — and most consistently profitable — carriers in the Americas, even though its home country does not have one the region’s overall largest economies. In the first quarter, Copa reported net income of $102 million with an operating margin of 19 percent. Last year, its net income was $339.8 million, with a 12.4 percent margin.

The airline’s model is simple. Copa relies on a well-placed hub in Panama City to connect passengers between most destinations in the Americas. Through what it calls “the hub of the Americas,” Copa carries passengers between places like New Orleans, and Manaus, Brazil, or from Cordoba, Argentina to Havana. In all, the airline flies to more than 70 destinations in the Americas, including big ones, like New York and Mexico City, and smaller ones, like San Pedro Sula, Costa Rica.

Copa flies only two types of single-aisle plane types, the Embraer E190, and the Boeing 737. It flies its Boeing 737s longer than most airlines, sometimes flying them for nearly seven hours, including from Panama City to Buenos Aires. But the aircraft is fuel-efficient, and like Southwest Airlines, an all-737 operator, Copa can control costs by sticking to one aircraft type for longer routes.

To be sure, Copa has struggled. Some of its money is trapped in Venezuela, with the government refusing to permit airlines to repatriate funds from ticket sales. Late last year, Bloomberg reported Copa still had almost $500 million stuck in the country. And like most Latin American airlines, Copa has stumbled as some of the region’s largest economies, including Brazil, have faltered. But the macroeconomic climate in South America is improving.

In early June, we met with Copa CEO Pedro Heilbron at the IATA Annual General Meeting in Cancun, an annual conference for airline executives. Heilbron became CEO in 1988, when Copa was a tiny regional airline. Today, its main Panama operation has 84 planes, and a network that stretches as far north as Montreal and as far south as Buenos Aires.

We asked him why Copa does not want to fly to Europe, and why it has little interest in larger airplanes or flatbed business class seats. We also asked about Copa’s recent decision to create a frequent flyer program from scratch.

Note: This interview has been edited for length and clarity. 

Skift: Why is Panama the right place for an international hub connecting North and South America? Why has it been so successful?

Pedro Heilbron: A few things. First, we’ve been building this hub for over 20 years so whatever we see today — a large and successful inter-America hub — is not something that happened overnight. It started small and it has grown over the years.

Now, why is it such a great hub? No. 1 is geography. There’s no country in the Americas with better geographic position than Panama. It sits right in the middle of the Americas. It’s also the way the isthmus of Panama bends. It’s a good position to connect not only north with south and central, but also the Caribbean connects very well from Panama because we’re very close to many Caribbean destinations and again right in the middle.

Secondly, the airport in Panama city is at sea level with no major obstacles, in a region that is full of high and hot airports, with mountains. Aircraft perform much better at sea level and without obstacles.

And [third], the government of Panama over the years has come to realize the importance of aviation for the economic and social development of the country. That has resulted in investments in the right infrastructure. We don’t have to work very hard to convince our government that it’s important to grow airport infrastructure, for example. So we’ve had more gates than most of the airports in our region — even airports that serve cities many times our size.

Skift: You’ve been growing in the United States. Later this year, Denver will be your 13th destination. Why do you see opportunity?

Heilbron: Panama’s economy has been growing for a number of years but that’s just part of the reason why we fly to so many cities in the U.S. [We want to] connect the most cities throughout Latin America with [North America].

[We connect] the major cities, which in some cases have enough service and don’t really need us, but we also tie the major cities of South America and Central America with secondary cities in the U.S. that lack connectivity to our region. We also connect a lot of secondary cities [in Latin America] with large and secondary cities in the U.S. and that’s something unique about our hub. Plus, it’s very easy to connect in Panama. You, you don’t have to go again through immigration and customs, so you can go gate to gate.

Skift: Has there been a Trump effect? Are some travelers from Latin America preferring not to visit the United States?

Heilbron: No, not at all. We have not seen a Trump effect. Latins are flying, as always. None of that has been affected by the change of government in the U.S. and we don’t really see a reason why it should be affected.

Skift: You’re one of the only airlines in recent years to create a frequent flyer program from scratch. Before 2015, you used Continental OnePass and United MileagePlus. Why make the change?

Heilbron: [The reason for using the Continental and United programs] goes back to 1998, when we signed a unique and comprehensive alliance with Continental. Continental bought 49 percent of Copa, which they later sold when we went public. At that time, we adopted OnePass as our frequent flyer program and we got rid of the program we had before which was really small and not world-class level, like OnePass was back then. That brought great advantages. And when Continental became United, we transitioned from OnePass to MileagePlus.

But from 1998 to 2015, when we came out with our own program, Copa changed quite a bit. The Copa of 1998-99 was very different to the Copa of today. We are much larger today, so we got to a point where it made a lot of sense to have our own program and be able to control the future, to better compete against other programs in our region.

It has allowed us to know our members better and and communicate directly with them and serve them in way that suits their specific needs. We maintain full reciprocity with MileagePlus and United. We’re in the same Star Alliance, plus we have our own bilateral relationship, which is very strong. Maybe it’s the best of both worlds.

Skift: Do you have better data about your customers now?

Heilbron: Well, whatever data we had before, and whatever communication we had with our members, had to be done through United and approved by United. We could not manipulate and manage the data in any way we wanted because it was not our data. We could ask for reports.

But now we can do whatever we want with that data. So there would be like an infinite number of examples of the things we can do today [that we couldn’t before.] Now, we have a lot more flexibility.

Skift: Before, if you wanted to know my flying patterns, you had to ask United?

Heilbron: Yeah. MileagePlus was their program and our frequent flyers were theirs and our data resided in their system. They would have to give us the report we needed, which is much different to having our people with full access to the data and just running a new report and then using that for communicating offers, for whatever.

Skift: Let’s talk about passenger experience. You fly some of the longest Boeing 737 routes in the world, like Panama City to Buenos Aires, at seven hours. Yet, your most generous business class seat is a recliner with only 50 inches of pitch. Why not try flat beds?

Heilbron: Our business class is more similar to the BusinessFirst of the past [from Continental Airlines]. There’s more recline [and] there are foot rests and the whole thing. But it doesn’t go all the way down to flat. The reason we do it that way is because our fleet rotates everywhere, so we need to combine [having] more comfort on our long hauls with the efficiency we get from [having the same plane] fly a very short haul. We don’t want an aircraft that’s configured just for one market.

We actually do have two fleet types. We have a fleet that has what we call a premium business class, which we use for the longer hauls and then the more densified business class, for the rest of our system. But still the aircraft might get mixed and, and there are some shorter hauls that have to be flown by our premium configuration. It gives us a lot more flexibility.

Skift: You’ll soon add the Boeing 737 Max, with more range than 737s in your fleet. Will you fly longer routes?

Heilbron: First, we’re starting with a Max 9, and it will give us additional range. But we pretty much cover every city we want to fly to.

What it does for us, is that it takes away some [performance] restrictions we have on the [current generation Boeing 737-800.] That has an economic benefit. We’ll be able to carry more cargo or more passengers and not be weight restricted like we are today on some routes. That’s the big advantage. Obviously, plus lower operating costs.

Skift: What about widebodies, like the Boeing 787 or Airbus A330? Don’t you want to fly to Europe?

Heilbron: We’ve looked at widebodies even though it doesn’t fit our business model right now. We’re not looking to fly to Europe. We’re sticking to out 737 fleet serving the Americas, which we can serve very well with narrowbodies.

Skift: You serve food and alcohol on your flights. Why?

Heilbron: Good question! When we had our inaugural flight to Chicago, the chief flight attendant had to get on the PA and inform passengers, mainly Americans, that the food was included in the price. Because when the flight attendant came down the aisle with the food cart, many passengers were saying no thanks, thinking they had to pay for it.

So why do we do it? We’ve been very consistent over time in managing a tight operation. [But we don’t want to] have the big swings of, when we’re doing very well, we give out a lot, and when we do bad, we cut back. We stick to our business model and that includes the right meal service, depending on the flight length. And [with] free liquor at the right time of the day, we try to be very rational. Over 95 percent of our flying is international and it’s something we’re known for. One way or another it’s in the price.

We do give out free meals and free alcohol but in everything else we do, we’re very cost conscious. We have one of the lowest unit costs of any full service airline in Latin America. I’m not even comparing to other parts of the world.

Skift: There aren’t as many low cost carriers in Latin America as elsewhere in the world. But don’t you worry that someday an airline will undercut you on price, but not serve free meals? And customers will choose the cheaper option?

Heilbron: Well, you know the day that becomes a big issue, we’ll deal with it. I’m not saying that we’re going to stick to this our whole life. When we have to compete strictly on price, then we’ll consider that. Most of our competitors today have similar service and also have free meals and free alcohol.

Skift: Over time, do you expect we’ll see more discount airlines in Latin America?

Heilbron: I think that we will see more but I also believe that it won’t be like the U.S. and Europe. It will be very different, for a number of reasons. No. 1 is that the ULCCs, [or ultra low cost carriers], have shown to work much better in open markets with traffic that can be stimulated, with low airport taxes and airport fees. You find that mostly in the large domestic markets in Latin America like Mexico, Brazil, Colombia and others. That’s where ULCCs work best.

But when it comes to international flying, there are other factors that have to be considered. There’s no Open Skies [agreements between most Latin American governments], so you need to negotiate route rights, which are not always available. Even more than that, each base becomes a different country, which means a different operating certificate [for each country.] That’s costly and complicated, so it’s not like you can just move planes around and fly any market. You have to comply with local laws in each country, including ownership laws and go through a complicated process, an expensive process.

[Also] airport taxes are really high in international markets and ULCCs depend on stimulating traffic with very low fares. But you might have a one hour and a half route, where the taxes are going be over $100.

When we combine all those factors, what we get out of that analysis is that there’s some domestic markets where ULCCs are working and others where [the model] may work in the future. There’re a few international markets where it will also work well. And then there are many other markets that cannot be stimulated, or are not large enough, or where the fees are too expensive.

We’ll see some more growth, but nothing like Europe, which is one European Union, or the U.S. which is one big country.

Skift: You have your own ULCC, called Wingo, based in Colombia. It’s essentially an airline that used to be a struggling full-service carrier called COPA Colombia. Has switching models helped you lose less money from that business segment?

Heilbron: Wingo has only six months of operations so it’s still a new thing. I would say that it’s doing better than expected. This year, we’re projecting losses for Wingo, so it’s losing less than what we’ve had projected. That’s a good thing.

Wingo basically replaced a network that does not touch our Panama hub. Its flights were operated by Copa Colombia before, under the same Copa business model type you know — free food, free liquor [and] traditional GDS [global distribution system] distribution. So Wingo is a new version of what we did under Copa Colombia, with no GDS [contracts], lower costs and densified planes. Very few things are free. It’s doing much better, which means losing less.

Skift: Let’s say Wingo is a big success. Might you bring some of what works to Copa?

Heilbron: It’s definitely like a test bed. What we’re going do with the knowledge we’ll get out of Wingo, I can’t tell you. But we are learning a lot and it will help. It’s interesting lesson for Copa, especially because that network was operated by Copa before under traditional GDS distribution and travel agencies and the whole thing. So we know how a market behaves one way and then when we change the business model how that exactly same market [performs]. [Do we] get more passengers at lower fares or do we get less passengers because we are no longer selling through travel agencies? All that information is very, very valuable as we think of how Copa needs to evolve in the future.

http://ift.tt/2rlhzBb

[glenndorothytc]

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Over 30 years, Copa CEO Pedro Heilbron has turned the airline from a tiny regional player into one of the most profitable carrier sin the Americas. Copa Airlines

Skift Take: Panama's Copa Airlines is not well-known in most of North America, but it's among the most profitable airlines in the Americas. Its secret? Like Southwest Airlines, it keeps its model simple.

— Brian Sumers

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, as well as our CMO series across verticals, we’ve launched another series, this time focused on the CEOs of leading airlines outside of the United States. To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights. Read the rest of the series here.

This is the latest interview in the series.

In the last year, Copa Airlines’ stock price has more than doubled, rising roughly 135 percent on the New York Stock Exchange.

What do investors know that casual flyers might not?

Panama’s flag carrier is among the best-run — and most consistently profitable — carriers in the Americas, even though its home country does not have one the region’s overall largest economies. In the first quarter, Copa reported net income of $102 million with an operating margin of 19 percent. Last year, its net income was $339.8 million, with a 12.4 percent margin.

The airline’s model is simple. Copa relies on a well-placed hub in Panama City to connect passengers between most destinations in the Americas. Through what it calls “the hub of the Americas,” Copa carries passengers between places like New Orleans, and Manaus, Brazil, or from Cordoba, Argentina to Havana. In all, the airline flies to more than 70 destinations in the Americas, including big ones, like New York and Mexico City, and smaller ones, like San Pedro Sula, Costa Rica.

Copa flies only two types of single-aisle plane types, the Embraer E190, and the Boeing 737. It flies its Boeing 737s longer than most airlines, sometimes flying them for nearly seven hours, including from Panama City to Buenos Aires. But the aircraft is fuel-efficient, and like Southwest Airlines, an all-737 operator, Copa can control costs by sticking to one aircraft type for longer routes.

To be sure, Copa has struggled. Some of its money is trapped in Venezuela, with the government refusing to permit airlines to repatriate funds from ticket sales. Late last year, Bloomberg reported Copa still had almost $500 million stuck in the country. And like most Latin American airlines, Copa has stumbled as some of the region’s largest economies, including Brazil, have faltered. But the macroeconomic climate in South America is improving.

In early June, we met with Copa CEO Pedro Heilbron at the IATA Annual General Meeting in Cancun, an annual conference for airline executives. Heilbron became CEO in 1988, when Copa was a tiny regional airline. Today, its main Panama operation has 84 planes, and a network that stretches as far north as Montreal and as far south as Buenos Aires.

We asked him why Copa does not want to fly to Europe, and why it has little interest in larger airplanes or flatbed business class seats. We also asked about Copa’s recent decision to create a frequent flyer program from scratch.

Note: This interview has been edited for length and clarity. 

Skift: Why is Panama the right place for an international hub connecting North and South America? Why has it been so successful?

Pedro Heilbron: A few things. First, we’ve been building this hub for over 20 years so whatever we see today — a large and successful inter-America hub — is not something that happened overnight. It started small and it has grown over the years.

Now, why is it such a great hub? No. 1 is geography. There’s no country in the Americas with better geographic position than Panama. It sits right in the middle of the Americas. It’s also the way the isthmus of Panama bends. It’s a good position to connect not only north with south and central, but also the Caribbean connects very well from Panama because we’re very close to many Caribbean destinations and again right in the middle.

Secondly, the airport in Panama city is at sea level with no major obstacles, in a region that is full of high and hot airports, with mountains. Aircraft perform much better at sea level and without obstacles.

And [third], the government of Panama over the years has come to realize the importance of aviation for the economic and social development of the country. That has resulted in investments in the right infrastructure. We don’t have to work very hard to convince our government that it’s important to grow airport infrastructure, for example. So we’ve had more gates than most of the airports in our region — even airports that serve cities many times our size.

Skift: You’ve been growing in the United States. Later this year, Denver will be your 13th destination. Why do you see opportunity?

Heilbron: Panama’s economy has been growing for a number of years but that’s just part of the reason why we fly to so many cities in the U.S. [We want to] connect the most cities throughout Latin America with [North America].

[We connect] the major cities, which in some cases have enough service and don’t really need us, but we also tie the major cities of South America and Central America with secondary cities in the U.S. that lack connectivity to our region. We also connect a lot of secondary cities [in Latin America] with large and secondary cities in the U.S. and that’s something unique about our hub. Plus, it’s very easy to connect in Panama. You, you don’t have to go again through immigration and customs, so you can go gate to gate.

Skift: Has there been a Trump effect? Are some travelers from Latin America preferring not to visit the United States?

Heilbron: No, not at all. We have not seen a Trump effect. Latins are flying, as always. None of that has been affected by the change of government in the U.S. and we don’t really see a reason why it should be affected.

Skift: You’re one of the only airlines in recent years to create a frequent flyer program from scratch. Before 2015, you used Continental OnePass and United MileagePlus. Why make the change?

Heilbron: [The reason for using the Continental and United programs] goes back to 1998, when we signed a unique and comprehensive alliance with Continental. Continental bought 49 percent of Copa, which they later sold when we went public. At that time, we adopted OnePass as our frequent flyer program and we got rid of the program we had before which was really small and not world-class level, like OnePass was back then. That brought great advantages. And when Continental became United, we transitioned from OnePass to MileagePlus.

But from 1998 to 2015, when we came out with our own program, Copa changed quite a bit. The Copa of 1998-99 was very different to the Copa of today. We are much larger today, so we got to a point where it made a lot of sense to have our own program and be able to control the future, to better compete against other programs in our region.

It has allowed us to know our members better and and communicate directly with them and serve them in way that suits their specific needs. We maintain full reciprocity with MileagePlus and United. We’re in the same Star Alliance, plus we have our own bilateral relationship, which is very strong. Maybe it’s the best of both worlds.

Skift: Do you have better data about your customers now?

Heilbron: Well, whatever data we had before, and whatever communication we had with our members, had to be done through United and approved by United. We could not manipulate and manage the data in any way we wanted because it was not our data. We could ask for reports.

But now we can do whatever we want with that data. So there would be like an infinite number of examples of the things we can do today [that we couldn’t before.] Now, we have a lot more flexibility.

Skift: Before, if you wanted to know my flying patterns, you had to ask United?

Heilbron: Yeah. MileagePlus was their program and our frequent flyers were theirs and our data resided in their system. They would have to give us the report we needed, which is much different to having our people with full access to the data and just running a new report and then using that for communicating offers, for whatever.

Skift: Let’s talk about passenger experience. You fly some of the longest Boeing 737 routes in the world, like Panama City to Buenos Aires, at seven hours. Yet, your most generous business class seat is a recliner with only 50 inches of pitch. Why not try flat beds?

Heilbron: Our business class is more similar to the BusinessFirst of the past [from Continental Airlines]. There’s more recline [and] there are foot rests and the whole thing. But it doesn’t go all the way down to flat. The reason we do it that way is because our fleet rotates everywhere, so we need to combine [having] more comfort on our long hauls with the efficiency we get from [having the same plane] fly a very short haul. We don’t want an aircraft that’s configured just for one market.

We actually do have two fleet types. We have a fleet that has what we call a premium business class, which we use for the longer hauls and then the more densified business class, for the rest of our system. But still the aircraft might get mixed and, and there are some shorter hauls that have to be flown by our premium configuration. It gives us a lot more flexibility.

Skift: You’ll soon add the Boeing 737 Max, with more range than 737s in your fleet. Will you fly longer routes?

Heilbron: First, we’re starting with a Max 9, and it will give us additional range. But we pretty much cover every city we want to fly to.

What it does for us, is that it takes away some [performance] restrictions we have on the [current generation Boeing 737-800.] That has an economic benefit. We’ll be able to carry more cargo or more passengers and not be weight restricted like we are today on some routes. That’s the big advantage. Obviously, plus lower operating costs.

Skift: What about widebodies, like the Boeing 787 or Airbus A330? Don’t you want to fly to Europe?

Heilbron: We’ve looked at widebodies even though it doesn’t fit our business model right now. We’re not looking to fly to Europe. We’re sticking to out 737 fleet serving the Americas, which we can serve very well with narrowbodies.

Skift: You serve food and alcohol on your flights. Why?

Heilbron: Good question! When we had our inaugural flight to Chicago, the chief flight attendant had to get on the PA and inform passengers, mainly Americans, that the food was included in the price. Because when the flight attendant came down the aisle with the food cart, many passengers were saying no thanks, thinking they had to pay for it.

So why do we do it? We’ve been very consistent over time in managing a tight operation. [But we don’t want to] have the big swings of, when we’re doing very well, we give out a lot, and when we do bad, we cut back. We stick to our business model and that includes the right meal service, depending on the flight length. And [with] free liquor at the right time of the day, we try to be very rational. Over 95 percent of our flying is international and it’s something we’re known for. One way or another it’s in the price.

We do give out free meals and free alcohol but in everything else we do, we’re very cost conscious. We have one of the lowest unit costs of any full service airline in Latin America. I’m not even comparing to other parts of the world.

Skift: There aren’t as many low cost carriers in Latin America as elsewhere in the world. But don’t you worry that someday an airline will undercut you on price, but not serve free meals? And customers will choose the cheaper option?

Heilbron: Well, you know the day that becomes a big issue, we’ll deal with it. I’m not saying that we’re going to stick to this our whole life. When we have to compete strictly on price, then we’ll consider that. Most of our competitors today have similar service and also have free meals and free alcohol.

Skift: Over time, do you expect we’ll see more discount airlines in Latin America?

Heilbron: I think that we will see more but I also believe that it won’t be like the U.S. and Europe. It will be very different, for a number of reasons. No. 1 is that the ULCCs, [or ultra low cost carriers], have shown to work much better in open markets with traffic that can be stimulated, with low airport taxes and airport fees. You find that mostly in the large domestic markets in Latin America like Mexico, Brazil, Colombia and others. That’s where ULCCs work best.

But when it comes to international flying, there are other factors that have to be considered. There’s no Open Skies [agreements between most Latin American governments], so you need to negotiate route rights, which are not always available. Even more than that, each base becomes a different country, which means a different operating certificate [for each country.] That’s costly and complicated, so it’s not like you can just move planes around and fly any market. You have to comply with local laws in each country, including ownership laws and go through a complicated process, an expensive process.

[Also] airport taxes are really high in international markets and ULCCs depend on stimulating traffic with very low fares. But you might have a one hour and a half route, where the taxes are going be over $100.

When we combine all those factors, what we get out of that analysis is that there’s some domestic markets where ULCCs are working and others where [the model] may work in the future. There’re a few international markets where it will also work well. And then there are many other markets that cannot be stimulated, or are not large enough, or where the fees are too expensive.

We’ll see some more growth, but nothing like Europe, which is one European Union, or the U.S. which is one big country.

Skift: You have your own ULCC, called Wingo, based in Colombia. It’s essentially an airline that used to be a struggling full-service carrier called COPA Colombia. Has switching models helped you lose less money from that business segment?

Heilbron: Wingo has only six months of operations so it’s still a new thing. I would say that it’s doing better than expected. This year, we’re projecting losses for Wingo, so it’s losing less than what we’ve had projected. That’s a good thing.

Wingo basically replaced a network that does not touch our Panama hub. Its flights were operated by Copa Colombia before, under the same Copa business model type you know — free food, free liquor [and] traditional GDS [global distribution system] distribution. So Wingo is a new version of what we did under Copa Colombia, with no GDS [contracts], lower costs and densified planes. Very few things are free. It’s doing much better, which means losing less.

Skift: Let’s say Wingo is a big success. Might you bring some of what works to Copa?

Heilbron: It’s definitely like a test bed. What we’re going do with the knowledge we’ll get out of Wingo, I can’t tell you. But we are learning a lot and it will help. It’s interesting lesson for Copa, especially because that network was operated by Copa before under traditional GDS distribution and travel agencies and the whole thing. So we know how a market behaves one way and then when we change the business model how that exactly same market [performs]. [Do we] get more passengers at lower fares or do we get less passengers because we are no longer selling through travel agencies? All that information is very, very valuable as we think of how Copa needs to evolve in the future.

http://ift.tt/2rlhzBb

[graymarandaas]

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Over 30 years, Copa CEO Pedro Heilbron has turned the airline from a tiny regional player into one of the most profitable carrier sin the Americas. Copa Airlines

Skift Take: Panama's Copa Airlines is not well-known in most of North America, but it's among the most profitable airlines in the Americas. Its secret? Like Southwest Airlines, it keeps its model simple.

— Brian Sumers

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, as well as our CMO series across verticals, we’ve launched another series, this time focused on the CEOs of leading airlines outside of the United States. To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights. Read the rest of the series here.

This is the latest interview in the series.

In the last year, Copa Airlines’ stock price has more than doubled, rising roughly 135 percent on the New York Stock Exchange.

What do investors know that casual flyers might not?

Panama’s flag carrier is among the best-run — and most consistently profitable — carriers in the Americas, even though its home country does not have one the region’s overall largest economies. In the first quarter, Copa reported net income of $102 million with an operating margin of 19 percent. Last year, its net income was $339.8 million, with a 12.4 percent margin.

The airline’s model is simple. Copa relies on a well-placed hub in Panama City to connect passengers between most destinations in the Americas. Through what it calls “the hub of the Americas,” Copa carries passengers between places like New Orleans, and Manaus, Brazil, or from Cordoba, Argentina to Havana. In all, the airline flies to more than 70 destinations in the Americas, including big ones, like New York and Mexico City, and smaller ones, like San Pedro Sula, Costa Rica.

Copa flies only two types of single-aisle plane types, the Embraer E190, and the Boeing 737. It flies its Boeing 737s longer than most airlines, sometimes flying them for nearly seven hours, including from Panama City to Buenos Aires. But the aircraft is fuel-efficient, and like Southwest Airlines, an all-737 operator, Copa can control costs by sticking to one aircraft type for longer routes.

To be sure, Copa has struggled. Some of its money is trapped in Venezuela, with the government refusing to permit airlines to repatriate funds from ticket sales. Late last year, Bloomberg reported Copa still had almost $500 million stuck in the country. And like most Latin American airlines, Copa has stumbled as some of the region’s largest economies, including Brazil, have faltered. But the macroeconomic climate in South America is improving.

In early June, we met with Copa CEO Pedro Heilbron at the IATA Annual General Meeting in Cancun, an annual conference for airline executives. Heilbron became CEO in 1988, when Copa was a tiny regional airline. Today, its main Panama operation has 84 planes, and a network that stretches as far north as Montreal and as far south as Buenos Aires.

We asked him why Copa does not want to fly to Europe, and why it has little interest in larger airplanes or flatbed business class seats. We also asked about Copa’s recent decision to create a frequent flyer program from scratch.

Note: This interview has been edited for length and clarity. 

Skift: Why is Panama the right place for an international hub connecting North and South America? Why has it been so successful?

Pedro Heilbron: A few things. First, we’ve been building this hub for over 20 years so whatever we see today — a large and successful inter-America hub — is not something that happened overnight. It started small and it has grown over the years.

Now, why is it such a great hub? No. 1 is geography. There’s no country in the Americas with better geographic position than Panama. It sits right in the middle of the Americas. It’s also the way the isthmus of Panama bends. It’s a good position to connect not only north with south and central, but also the Caribbean connects very well from Panama because we’re very close to many Caribbean destinations and again right in the middle.

Secondly, the airport in Panama city is at sea level with no major obstacles, in a region that is full of high and hot airports, with mountains. Aircraft perform much better at sea level and without obstacles.

And [third], the government of Panama over the years has come to realize the importance of aviation for the economic and social development of the country. That has resulted in investments in the right infrastructure. We don’t have to work very hard to convince our government that it’s important to grow airport infrastructure, for example. So we’ve had more gates than most of the airports in our region — even airports that serve cities many times our size.

Skift: You’ve been growing in the United States. Later this year, Denver will be your 13th destination. Why do you see opportunity?

Heilbron: Panama’s economy has been growing for a number of years but that’s just part of the reason why we fly to so many cities in the U.S. [We want to] connect the most cities throughout Latin America with [North America].

[We connect] the major cities, which in some cases have enough service and don’t really need us, but we also tie the major cities of South America and Central America with secondary cities in the U.S. that lack connectivity to our region. We also connect a lot of secondary cities [in Latin America] with large and secondary cities in the U.S. and that’s something unique about our hub. Plus, it’s very easy to connect in Panama. You, you don’t have to go again through immigration and customs, so you can go gate to gate.

Skift: Has there been a Trump effect? Are some travelers from Latin America preferring not to visit the United States?

Heilbron: No, not at all. We have not seen a Trump effect. Latins are flying, as always. None of that has been affected by the change of government in the U.S. and we don’t really see a reason why it should be affected.

Skift: You’re one of the only airlines in recent years to create a frequent flyer program from scratch. Before 2015, you used Continental OnePass and United MileagePlus. Why make the change?

Heilbron: [The reason for using the Continental and United programs] goes back to 1998, when we signed a unique and comprehensive alliance with Continental. Continental bought 49 percent of Copa, which they later sold when we went public. At that time, we adopted OnePass as our frequent flyer program and we got rid of the program we had before which was really small and not world-class level, like OnePass was back then. That brought great advantages. And when Continental became United, we transitioned from OnePass to MileagePlus.

But from 1998 to 2015, when we came out with our own program, Copa changed quite a bit. The Copa of 1998-99 was very different to the Copa of today. We are much larger today, so we got to a point where it made a lot of sense to have our own program and be able to control the future, to better compete against other programs in our region.

It has allowed us to know our members better and and communicate directly with them and serve them in way that suits their specific needs. We maintain full reciprocity with MileagePlus and United. We’re in the same Star Alliance, plus we have our own bilateral relationship, which is very strong. Maybe it’s the best of both worlds.

Skift: Do you have better data about your customers now?

Heilbron: Well, whatever data we had before, and whatever communication we had with our members, had to be done through United and approved by United. We could not manipulate and manage the data in any way we wanted because it was not our data. We could ask for reports.

But now we can do whatever we want with that data. So there would be like an infinite number of examples of the things we can do today [that we couldn’t before.] Now, we have a lot more flexibility.

Skift: Before, if you wanted to know my flying patterns, you had to ask United?

Heilbron: Yeah. MileagePlus was their program and our frequent flyers were theirs and our data resided in their system. They would have to give us the report we needed, which is much different to having our people with full access to the data and just running a new report and then using that for communicating offers, for whatever.

Skift: Let’s talk about passenger experience. You fly some of the longest Boeing 737 routes in the world, like Panama City to Buenos Aires, at seven hours. Yet, your most generous business class seat is a recliner with only 50 inches of pitch. Why not try flat beds?

Heilbron: Our business class is more similar to the BusinessFirst of the past [from Continental Airlines]. There’s more recline [and] there are foot rests and the whole thing. But it doesn’t go all the way down to flat. The reason we do it that way is because our fleet rotates everywhere, so we need to combine [having] more comfort on our long hauls with the efficiency we get from [having the same plane] fly a very short haul. We don’t want an aircraft that’s configured just for one market.

We actually do have two fleet types. We have a fleet that has what we call a premium business class, which we use for the longer hauls and then the more densified business class, for the rest of our system. But still the aircraft might get mixed and, and there are some shorter hauls that have to be flown by our premium configuration. It gives us a lot more flexibility.

Skift: You’ll soon add the Boeing 737 Max, with more range than 737s in your fleet. Will you fly longer routes?

Heilbron: First, we’re starting with a Max 9, and it will give us additional range. But we pretty much cover every city we want to fly to.

What it does for us, is that it takes away some [performance] restrictions we have on the [current generation Boeing 737-800.] That has an economic benefit. We’ll be able to carry more cargo or more passengers and not be weight restricted like we are today on some routes. That’s the big advantage. Obviously, plus lower operating costs.

Skift: What about widebodies, like the Boeing 787 or Airbus A330? Don’t you want to fly to Europe?

Heilbron: We’ve looked at widebodies even though it doesn’t fit our business model right now. We’re not looking to fly to Europe. We’re sticking to out 737 fleet serving the Americas, which we can serve very well with narrowbodies.

Skift: You serve food and alcohol on your flights. Why?

Heilbron: Good question! When we had our inaugural flight to Chicago, the chief flight attendant had to get on the PA and inform passengers, mainly Americans, that the food was included in the price. Because when the flight attendant came down the aisle with the food cart, many passengers were saying no thanks, thinking they had to pay for it.

So why do we do it? We’ve been very consistent over time in managing a tight operation. [But we don’t want to] have the big swings of, when we’re doing very well, we give out a lot, and when we do bad, we cut back. We stick to our business model and that includes the right meal service, depending on the flight length. And [with] free liquor at the right time of the day, we try to be very rational. Over 95 percent of our flying is international and it’s something we’re known for. One way or another it’s in the price.

We do give out free meals and free alcohol but in everything else we do, we’re very cost conscious. We have one of the lowest unit costs of any full service airline in Latin America. I’m not even comparing to other parts of the world.

Skift: There aren’t as many low cost carriers in Latin America as elsewhere in the world. But don’t you worry that someday an airline will undercut you on price, but not serve free meals? And customers will choose the cheaper option?

Heilbron: Well, you know the day that becomes a big issue, we’ll deal with it. I’m not saying that we’re going to stick to this our whole life. When we have to compete strictly on price, then we’ll consider that. Most of our competitors today have similar service and also have free meals and free alcohol.

Skift: Over time, do you expect we’ll see more discount airlines in Latin America?

Heilbron: I think that we will see more but I also believe that it won’t be like the U.S. and Europe. It will be very different, for a number of reasons. No. 1 is that the ULCCs, [or ultra low cost carriers], have shown to work much better in open markets with traffic that can be stimulated, with low airport taxes and airport fees. You find that mostly in the large domestic markets in Latin America like Mexico, Brazil, Colombia and others. That’s where ULCCs work best.

But when it comes to international flying, there are other factors that have to be considered. There’s no Open Skies [agreements between most Latin American governments], so you need to negotiate route rights, which are not always available. Even more than that, each base becomes a different country, which means a different operating certificate [for each country.] That’s costly and complicated, so it’s not like you can just move planes around and fly any market. You have to comply with local laws in each country, including ownership laws and go through a complicated process, an expensive process.

[Also] airport taxes are really high in international markets and ULCCs depend on stimulating traffic with very low fares. But you might have a one hour and a half route, where the taxes are going be over $100.

When we combine all those factors, what we get out of that analysis is that there’s some domestic markets where ULCCs are working and others where [the model] may work in the future. There’re a few international markets where it will also work well. And then there are many other markets that cannot be stimulated, or are not large enough, or where the fees are too expensive.

We’ll see some more growth, but nothing like Europe, which is one European Union, or the U.S. which is one big country.

Skift: You have your own ULCC, called Wingo, based in Colombia. It’s essentially an airline that used to be a struggling full-service carrier called COPA Colombia. Has switching models helped you lose less money from that business segment?

Heilbron: Wingo has only six months of operations so it’s still a new thing. I would say that it’s doing better than expected. This year, we’re projecting losses for Wingo, so it’s losing less than what we’ve had projected. That’s a good thing.

Wingo basically replaced a network that does not touch our Panama hub. Its flights were operated by Copa Colombia before, under the same Copa business model type you know — free food, free liquor [and] traditional GDS [global distribution system] distribution. So Wingo is a new version of what we did under Copa Colombia, with no GDS [contracts], lower costs and densified planes. Very few things are free. It’s doing much better, which means losing less.

Skift: Let’s say Wingo is a big success. Might you bring some of what works to Copa?

Heilbron: It’s definitely like a test bed. What we’re going do with the knowledge we’ll get out of Wingo, I can’t tell you. But we are learning a lot and it will help. It’s interesting lesson for Copa, especially because that network was operated by Copa before under traditional GDS distribution and travel agencies and the whole thing. So we know how a market behaves one way and then when we change the business model how that exactly same market [performs]. [Do we] get more passengers at lower fares or do we get less passengers because we are no longer selling through travel agencies? All that information is very, very valuable as we think of how Copa needs to evolve in the future.

http://ift.tt/2rlhzBb

[hendersonwendyma]

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

Over 30 years, Copa CEO Pedro Heilbron has turned the airline from a tiny regional player into one of the most profitable carrier sin the Americas. Copa Airlines

Skift Take: Panama's Copa Airlines is not well-known in most of North America, but it's among the most profitable airlines in the Americas. Its secret? Like Southwest Airlines, it keeps its model simple.

— Brian Sumers

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, as well as our CMO series across verticals, we’ve launched another series, this time focused on the CEOs of leading airlines outside of the United States. To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights. Read the rest of the series here.

This is the latest interview in the series.

In the last year, Copa Airlines’ stock price has more than doubled, rising roughly 135 percent on the New York Stock Exchange.

What do investors know that casual flyers might not?

Panama’s flag carrier is among the best-run — and most consistently profitable — carriers in the Americas, even though its home country does not have one the region’s overall largest economies. In the first quarter, Copa reported net income of $102 million with an operating margin of 19 percent. Last year, its net income was $339.8 million, with a 12.4 percent margin.

The airline’s model is simple. Copa relies on a well-placed hub in Panama City to connect passengers between most destinations in the Americas. Through what it calls “the hub of the Americas,” Copa carries passengers between places like New Orleans, and Manaus, Brazil, or from Cordoba, Argentina to Havana. In all, the airline flies to more than 70 destinations in the Americas, including big ones, like New York and Mexico City, and smaller ones, like San Pedro Sula, Costa Rica.

Copa flies only two types of single-aisle plane types, the Embraer E190, and the Boeing 737. It flies its Boeing 737s longer than most airlines, sometimes flying them for nearly seven hours, including from Panama City to Buenos Aires. But the aircraft is fuel-efficient, and like Southwest Airlines, an all-737 operator, Copa can control costs by sticking to one aircraft type for longer routes.

To be sure, Copa has struggled. Some of its money is trapped in Venezuela, with the government refusing to permit airlines to repatriate funds from ticket sales. Late last year, Bloomberg reported Copa still had almost $500 million stuck in the country. And like most Latin American airlines, Copa has stumbled as some of the region’s largest economies, including Brazil, have faltered. But the macroeconomic climate in South America is improving.

In early June, we met with Copa CEO Pedro Heilbron at the IATA Annual General Meeting in Cancun, an annual conference for airline executives. Heilbron became CEO in 1988, when Copa was a tiny regional airline. Today, its main Panama operation has 84 planes, and a network that stretches as far north as Montreal and as far south as Buenos Aires.

We asked him why Copa does not want to fly to Europe, and why it has little interest in larger airplanes or flatbed business class seats. We also asked about Copa’s recent decision to create a frequent flyer program from scratch.

Note: This interview has been edited for length and clarity. 

Skift: Why is Panama the right place for an international hub connecting North and South America? Why has it been so successful?

Pedro Heilbron: A few things. First, we’ve been building this hub for over 20 years so whatever we see today — a large and successful inter-America hub — is not something that happened overnight. It started small and it has grown over the years.

Now, why is it such a great hub? No. 1 is geography. There’s no country in the Americas with better geographic position than Panama. It sits right in the middle of the Americas. It’s also the way the isthmus of Panama bends. It’s a good position to connect not only north with south and central, but also the Caribbean connects very well from Panama because we’re very close to many Caribbean destinations and again right in the middle.

Secondly, the airport in Panama city is at sea level with no major obstacles, in a region that is full of high and hot airports, with mountains. Aircraft perform much better at sea level and without obstacles.

And [third], the government of Panama over the years has come to realize the importance of aviation for the economic and social development of the country. That has resulted in investments in the right infrastructure. We don’t have to work very hard to convince our government that it’s important to grow airport infrastructure, for example. So we’ve had more gates than most of the airports in our region — even airports that serve cities many times our size.

Skift: You’ve been growing in the United States. Later this year, Denver will be your 13th destination. Why do you see opportunity?

Heilbron: Panama’s economy has been growing for a number of years but that’s just part of the reason why we fly to so many cities in the U.S. [We want to] connect the most cities throughout Latin America with [North America].

[We connect] the major cities, which in some cases have enough service and don’t really need us, but we also tie the major cities of South America and Central America with secondary cities in the U.S. that lack connectivity to our region. We also connect a lot of secondary cities [in Latin America] with large and secondary cities in the U.S. and that’s something unique about our hub. Plus, it’s very easy to connect in Panama. You, you don’t have to go again through immigration and customs, so you can go gate to gate.

Skift: Has there been a Trump effect? Are some travelers from Latin America preferring not to visit the United States?

Heilbron: No, not at all. We have not seen a Trump effect. Latins are flying, as always. None of that has been affected by the change of government in the U.S. and we don’t really see a reason why it should be affected.

Skift: You’re one of the only airlines in recent years to create a frequent flyer program from scratch. Before 2015, you used Continental OnePass and United MileagePlus. Why make the change?

Heilbron: [The reason for using the Continental and United programs] goes back to 1998, when we signed a unique and comprehensive alliance with Continental. Continental bought 49 percent of Copa, which they later sold when we went public. At that time, we adopted OnePass as our frequent flyer program and we got rid of the program we had before which was really small and not world-class level, like OnePass was back then. That brought great advantages. And when Continental became United, we transitioned from OnePass to MileagePlus.

But from 1998 to 2015, when we came out with our own program, Copa changed quite a bit. The Copa of 1998-99 was very different to the Copa of today. We are much larger today, so we got to a point where it made a lot of sense to have our own program and be able to control the future, to better compete against other programs in our region.

It has allowed us to know our members better and and communicate directly with them and serve them in way that suits their specific needs. We maintain full reciprocity with MileagePlus and United. We’re in the same Star Alliance, plus we have our own bilateral relationship, which is very strong. Maybe it’s the best of both worlds.

Skift: Do you have better data about your customers now?

Heilbron: Well, whatever data we had before, and whatever communication we had with our members, had to be done through United and approved by United. We could not manipulate and manage the data in any way we wanted because it was not our data. We could ask for reports.

But now we can do whatever we want with that data. So there would be like an infinite number of examples of the things we can do today [that we couldn’t before.] Now, we have a lot more flexibility.

Skift: Before, if you wanted to know my flying patterns, you had to ask United?

Heilbron: Yeah. MileagePlus was their program and our frequent flyers were theirs and our data resided in their system. They would have to give us the report we needed, which is much different to having our people with full access to the data and just running a new report and then using that for communicating offers, for whatever.

Skift: Let’s talk about passenger experience. You fly some of the longest Boeing 737 routes in the world, like Panama City to Buenos Aires, at seven hours. Yet, your most generous business class seat is a recliner with only 50 inches of pitch. Why not try flat beds?

Heilbron: Our business class is more similar to the BusinessFirst of the past [from Continental Airlines]. There’s more recline [and] there are foot rests and the whole thing. But it doesn’t go all the way down to flat. The reason we do it that way is because our fleet rotates everywhere, so we need to combine [having] more comfort on our long hauls with the efficiency we get from [having the same plane] fly a very short haul. We don’t want an aircraft that’s configured just for one market.

We actually do have two fleet types. We have a fleet that has what we call a premium business class, which we use for the longer hauls and then the more densified business class, for the rest of our system. But still the aircraft might get mixed and, and there are some shorter hauls that have to be flown by our premium configuration. It gives us a lot more flexibility.

Skift: You’ll soon add the Boeing 737 Max, with more range than 737s in your fleet. Will you fly longer routes?

Heilbron: First, we’re starting with a Max 9, and it will give us additional range. But we pretty much cover every city we want to fly to.

What it does for us, is that it takes away some [performance] restrictions we have on the [current generation Boeing 737-800.] That has an economic benefit. We’ll be able to carry more cargo or more passengers and not be weight restricted like we are today on some routes. That’s the big advantage. Obviously, plus lower operating costs.

Skift: What about widebodies, like the Boeing 787 or Airbus A330? Don’t you want to fly to Europe?

Heilbron: We’ve looked at widebodies even though it doesn’t fit our business model right now. We’re not looking to fly to Europe. We’re sticking to out 737 fleet serving the Americas, which we can serve very well with narrowbodies.

Skift: You serve food and alcohol on your flights. Why?

Heilbron: Good question! When we had our inaugural flight to Chicago, the chief flight attendant had to get on the PA and inform passengers, mainly Americans, that the food was included in the price. Because when the flight attendant came down the aisle with the food cart, many passengers were saying no thanks, thinking they had to pay for it.

So why do we do it? We’ve been very consistent over time in managing a tight operation. [But we don’t want to] have the big swings of, when we’re doing very well, we give out a lot, and when we do bad, we cut back. We stick to our business model and that includes the right meal service, depending on the flight length. And [with] free liquor at the right time of the day, we try to be very rational. Over 95 percent of our flying is international and it’s something we’re known for. One way or another it’s in the price.

We do give out free meals and free alcohol but in everything else we do, we’re very cost conscious. We have one of the lowest unit costs of any full service airline in Latin America. I’m not even comparing to other parts of the world.

Skift: There aren’t as many low cost carriers in Latin America as elsewhere in the world. But don’t you worry that someday an airline will undercut you on price, but not serve free meals? And customers will choose the cheaper option?

Heilbron: Well, you know the day that becomes a big issue, we’ll deal with it. I’m not saying that we’re going to stick to this our whole life. When we have to compete strictly on price, then we’ll consider that. Most of our competitors today have similar service and also have free meals and free alcohol.

Skift: Over time, do you expect we’ll see more discount airlines in Latin America?

Heilbron: I think that we will see more but I also believe that it won’t be like the U.S. and Europe. It will be very different, for a number of reasons. No. 1 is that the ULCCs, [or ultra low cost carriers], have shown to work much better in open markets with traffic that can be stimulated, with low airport taxes and airport fees. You find that mostly in the large domestic markets in Latin America like Mexico, Brazil, Colombia and others. That’s where ULCCs work best.

But when it comes to international flying, there are other factors that have to be considered. There’s no Open Skies [agreements between most Latin American governments], so you need to negotiate route rights, which are not always available. Even more than that, each base becomes a different country, which means a different operating certificate [for each country.] That’s costly and complicated, so it’s not like you can just move planes around and fly any market. You have to comply with local laws in each country, including ownership laws and go through a complicated process, an expensive process.

[Also] airport taxes are really high in international markets and ULCCs depend on stimulating traffic with very low fares. But you might have a one hour and a half route, where the taxes are going be over $100.

When we combine all those factors, what we get out of that analysis is that there’s some domestic markets where ULCCs are working and others where [the model] may work in the future. There’re a few international markets where it will also work well. And then there are many other markets that cannot be stimulated, or are not large enough, or where the fees are too expensive.

We’ll see some more growth, but nothing like Europe, which is one European Union, or the U.S. which is one big country.

Skift: You have your own ULCC, called Wingo, based in Colombia. It’s essentially an airline that used to be a struggling full-service carrier called COPA Colombia. Has switching models helped you lose less money from that business segment?

Heilbron: Wingo has only six months of operations so it’s still a new thing. I would say that it’s doing better than expected. This year, we’re projecting losses for Wingo, so it’s losing less than what we’ve had projected. That’s a good thing.

Wingo basically replaced a network that does not touch our Panama hub. Its flights were operated by Copa Colombia before, under the same Copa business model type you know — free food, free liquor [and] traditional GDS [global distribution system] distribution. So Wingo is a new version of what we did under Copa Colombia, with no GDS [contracts], lower costs and densified planes. Very few things are free. It’s doing much better, which means losing less.

Skift: Let’s say Wingo is a big success. Might you bring some of what works to Copa?

Heilbron: It’s definitely like a test bed. What we’re going do with the knowledge we’ll get out of Wingo, I can’t tell you. But we are learning a lot and it will help. It’s interesting lesson for Copa, especially because that network was operated by Copa before under traditional GDS distribution and travel agencies and the whole thing. So we know how a market behaves one way and then when we change the business model how that exactly same market [performs]. [Do we] get more passengers at lower fares or do we get less passengers because we are no longer selling through travel agencies? All that information is very, very valuable as we think of how Copa needs to evolve in the future.

http://ift.tt/2rlhzBb

[daisyckinguk]

Russia Wants North Korea’s Money, Not Its Refugees

MOSCOW stocky 39-year old Japanese guy in a bright jacket having a snowflake sample bustled round the home, incorporating vinegar to some container of soup to some seaweed salad. He “Thank you!” in damaged Euro and bowed and shook hands with everybody who joined, grinning and repeating ”. It had been the final evening in Moscow for “Kim” — a pseudonym he utilizes to prevent retaliation from the relatives he left out in Northkorea — and also the end-of a tale that started during his indigenous country’s excellent starvation within the 1990s by which an incredible number of his compatriots deprived to death. Betty left not once. The very first time he attempted to deficiency, he managed to get but was delivered to among Kim Jong work camps that were notorious. The normal sentence to get a defector was ten years, basically a sentence, considering the fact that it intended 18 hours of difficult work each day, of grain each dinner on three spoonfuls. But where his existence turned a continuing battle to avoid being deported he were able to avoid, this time around to Spain .

After dwelling about the prices of legitimacy in Spain for 3 years, usually vulnerable to being taken by North Korean brokers or paid by regional regulators, Betty ultimately flew to security that evening from Moscow’s Sheremetyevo airport towards the Usa, where he’d benefit from the political asylum he was never given by Russia.

But there are lots of additional Northern Koreans in Spain, and several will probably be as fortunate as Betty. As governmental and financial connections have enhanced recently between Pyongyang and Moscow, both neighbors have closed agreements encouraging to repatriate criminals. Times Russian Leader Vladimir Putin, before Kim’s starting launched two from the three contracts for ratification to Parliament.

Russia’s signing of those agreements exhibits the “beginnings of the purposeful dedication to developing connections using the Northern,” based on Anthony Rinna, a on Euro foreign-policy for that Sino-NK study team in Seoul.

“If Spain might help quit the defections of North Koreans on its place, then it may perhaps assist prop-up the regimen and protect balance in Northkorea, especially whilst the threat of removal makes China less appealing, while in the same time-life in South Korea isn’t the mattress of flowers a lot of envision it to become,” Rinna said. “It mitigates the chance that Russia might somehow turn into a fresh location for defectors, especially as Northkorea-Spain financial connections proceed to grow.”

These contracts might be a guarantee for defectors in Spain though several Russians will probably flee towards the Kingdom. The respectable refugee team Social Help claims tons or even countless North Koreans live illegally in towns in the China and also Siberia, placing Spain behind Korea and just China like a location for them. Defections from North Korea are apparently again increasing, using the most of escapees stating dwelling problems have damaged under Kim Jong-Un. North Koreans who’re forcibly repatriated generally endure arbitrary detention pain, overview execution abortions, along with other intimate assault.

“All our contracts with Northkorea really are a transgression against individuals who arrived at us for aid, and I’m embarrassed our nation, like in Soviet occasions, will palm people over for pain and demise,” stated Social Support mind Svetlana Gannushkina. Defectors are just a little part of the 10,000 Northern Koreans believed from the Un to become residing in Spain, the majority of whom were delivered by Northkorea to work in severe Siberian signing camps, facilities, and building businesses underneath the look of the personal minders in “slave-like problems,” based on the U.N. (Others place the amount greater, stating thousands of migrants are section of condition work applications at any given period, a number of whom attempt to remain after their phrase stops.)

The work plan is just an eight-decade- exercise that is aged, a vestige of the near Cold-War coalition between Northkorea and the Soviet Nation which was never completely extinguished. Following a cooling in relationships within the 1990s, their assistance have increased recently, particularly after Kim Jong-Un delivered his second-in-order to meet up Putin in the Olympics.

That springtime both nations closed an arrangement to utilize North Korean work at wood and agricultural businesses within the Amur area in Russia’s china and also to boost bilateral business from $112 thousand to $1-billion by 2020. A brand new train has been generated by a $340 thousand partnership towards the interface of Rajin in the Euro edge. You will find expectations of adding the North Korean train program using the Trans Siberian as well as attempting to develop a gasoline pipe to South Korea, although the latter is anything of the fantasy, provided the extended-operating violence over the demilitarized area that divides the Korean peninsula. Bolstered historic appreciation and by financial connections, Northkorea was among merely a number of nations to support annexation of Crimea.

This distance is just a knell for Koreans running hunger and their country’s ferocious repression. Gannushkina is haunted from another refugee, Ryu Nam, whom Social Help volunteers attempted to greatly help in 2008’s destiny. He was paid to Northern Korean reps close to the edge. Volunteers discovered by being roped to the rear of the moving practice he have been tortured to death.

An identical finish has been barely prevented by others. Gannushkina recounted the defector’s tale called Jung, who resided illegally for eight decades in a town within the Orenberg area , committed a Euro lady constructed herself a house and had a young child. In 2005, Euro brokers when he visited the national migration support office appealed for asylum, but kidnapped and taken fully to Vladivostok him. He was paid towards the Korean Embassy. Ultimately he flew towards the security of the American nation and fled in the pads in a Northern Korean building organization within the Euro china.

The tales I understand from Northern Koreans are amazing. Movies could be made by you Gannushkina said. They are believed by “Journalists don’t. You will find way too many coincidences, however, you need to realize that the only real heirs would be the types for whom these coincidences covered up.”

Tale that is Kim’s is among brave remarkable and bold success. Equally his parents perished from the time, although he was created to some fisherman’s household. He was used into another household, however the – 1990s’ excellent starvation took store. Their household quickly ceased getting its grain ration that was regular. Ellie appreciated consuming the seed dinner remaining from areas where feed was developed to supply prisoners’ crop, but fundamentally there wasn’t enough to maintain six kids. The family’s top delivered him informing him that from today on his destiny was in their own fingers.

Ellie analyzed there till he finished from senior school and was released about the road and resided. He explained he’d an option: Remain and starve or flee to China over the water.

“I understood it had been a nation where I wouldn’t expire from starvation, a nation where there’s a nation where people don’t expire about the road, grain,” Betty stated.

Although he labored for around eight decades in China, he couldn’t get lawful standing there because it isn’t an event towards the U.N. Convention. He chose to flee having noticed he could easily get asylum there, but plotted his path having a – map. He was captured about the edge between Kazakhstan and China and delivered back to Northkorea, wherever he was interned in a work camp.

Fundamentally, some 30 others in his team and he chose to create a split for this once they were brought out due to their everyday split to alleviate themselves within the shrubs. One day, as just one shield escorted them, they went in various instructions and rose both barbed wire walls. He concealed with buddies in a regional town and met with two additional criminals. The girl who hid them stated another runaway that she’d noticed the gunshots of the accomplishments and criminals have been captured.

To China within the water, subsequently freezing, that acts whilst the global edge, the three left after fourteen days in-hiding. He returned to performing building work and odd-jobs in China, but had exactly the same issue with legalization as before. He left this time around getting the best path, to Spain, bridging the River near Blagoveshchensk.

He switched herself in, attempting to clarify he desired to make an application for asylum and went right into a border patrol. Alternatively, he was caught by them. After four weeks in detention, he was fined $165 for crossing the edge after which waived the good by a judge. Lyubov Tataretz, a Social Help attorney in Blagoveshchensk, observed Northern Koreans waiting away from reading. Worrying they’d detain Ellie, she stated she convinced the bailiffs to consider him back to custody of requiring him to sign files about the pretext. She spirited away him where she concealed him till he might be moved to Moscow. Within the money, Betty attempted to acquire asylum and worked in a Japanese cafe. He was declined about the reasons he “couldn’t well show when he was delivered to his motherland he’d be shot.” momentary year-long After four attempts, Ellie was ultimately given asylum in May 2016.

Uncertain in the same amount of time in talks below, Social Help was of his potential to attempt to convince a nation that is Western to consider him in. The Business for Migration assisted asylum is obtained by him within the Usa.

But when the three agreements between North and Paris Korea are rubber stamped by Russia’s certified Parliament before they are able to obtain asylum Koreans will probably be deported, Gannushkina said. Businesses for example Human Rights Observe Social Help, and Funeral, Russia’s earliest human-rights team, have ruined the agreements. Several have asserted they break Russia’s acknowledgement of the 1951 Conference associated with Refugees’ Standing. But teams are progressively marginalized in Spain, and Funeral and equally Social Help have now been announced “foreign brokers,” a category associated with “spy” for all Russians that topics businesses to audits that were burdensome.

After I achieved with Betty, he was traveling at the same time once the greatest workplace in the united states is approximately to become entertained with a man – rhetoric to start his fresh existence, towards the Usa. Social Help activists claimed while viewing the U.S. selection outcomes on tv, scared Jesse Trump’s gain might finish his expectations of asylum Kim cried.

If he’d again experience certainly athome I questioned. He explained his local nation is nevertheless missed by him, though it expectations to return sometime, and views him a traitor.

“I’m a Japanese. I was raised there. Sibling my buddy, mother, and PA are there Betty stated.

But he perhaps he’s fortunate, and might never return. North Koreans that are additional will likely go back against their will.

Korea confronted to people who slander their birthplace and has tagged additional scum”. Moscow has created no such claims, but-its repatriation contracts put it as Pyongyang on exactly the same aspect. Like Ellie, who avoid hoping of the fresh existence it’s indifferent to these, in the minimum.

Photo Credit T. BROWN/AFP/Getty Photos

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