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Panama's Aeroperlas Banks on Tourism
The Tico Times / May 18, 2001

By Larry Luxner

PANAMA CITY -- Panama is the least-populated of Central America's six Spanish-speaking republics, but its No. 1 domestic carrier, Aeroperlas, is by far the most important of the five regional airlines under the Grupo TACA umbrella.

"We have 35 destinations and between 50 and 60 flights a day, making it TACA's largest regional airline," says sales and marketing manager Raúl M. Morales.

Despite heavy marketing, however, Panama's sluggish economy has hurt sales at Aeroperlas, forcing the carrier to reduce and in some cases suspend service to key business destinations. In order to stay aloft, Aeroperlas is now turning to tourism -- and has recently begun offering some real bargain-priced tourist packages to such exotic destinations as Bocas del Toro, Bahia Piñas and Isla Contadora, the latter only a 15-minute flight from Panama City.

Aeroperlas was established in 1970, and became part of El Salvador-based Grupo TACA in early 1998. Four other regional airlines are also affiliated with TACA: Sansa of Costa Rica; Inter of Guatemala; Isleña of Honduras and La Costeña of Nicaragua

Until recently, Aeroperlas operated out of its hub at crowded Paitilla Airport in downtown Panama City. But with the return of the Panama Canal and all "reverted areas" of the former U.S. Canal Zone, the Panamanian government found itself in control of Albrook, and last year converted the old American army base into a domestic airport, replacing Paitilla. All Aeroperlas flights now begin or end at the newly inaugurated Aeropuerto Marcos A. Gelabert, about 20 minutes from downtown Panama City.

Morales says his airline controls about 80% of Panama's domestic air traffic, with the remaining 20% divided equally between smaller rivals Mapiex and Aviatur. A fourth airline, Aerotaxi, flies to 20 destinations in the San Blas Islands and is actually a subsidiary of Aeroperlas.

"We bought Aerotaxi in 1988, but for image reasons we still keep the name," said Morales.

At present, the Aeroperlas fleet consists of four 33-seat Shorts 360s, three 20-seat Twin Otters and two 12-seat Caravans. The airline has 250 employees and last year carried 300,000 passengers.

"Being part of TACA has helped our image. It has also helped with training and maintenance," said Morales, interviewed at his second-floor office at Aeropuerto Marcos A. Gelabert. "We currently have our own reservations system. Nevertheless, we are linked with TACA's website for the sale of tickets."

In 2000, Aeroperlas recorded $12.1 million in total revenues, but ended the year with $566,000 in losses -- a direct consequence of Panama's difficult economic situation.

In the last few years, sales of duty-free items, electronics, appliances and luxury goods at the sprawling Colón Free Zone have fallen sharply -- a trend blamed on economic crises in Colombia, Venezuela, Ecuador and other traditional free-zone customers. As a result, Aeroperlas has been forced to reduce the frequency of its Panama City-Colón flights from 28 a day to 12. It has also had to suspend its daily flight between David and San José, Costa Rica, which it had operated since 1996.

"In addition, we used to fly directly from Panama City's Tocumen International Airport to Colón, especially for passengers arriving on flights from South America. But we suspended those flights last year because of the economic situation," said Morales. "Difficulties throughout Central and South America have caused sales in the Colón Free Zone to drop significantly. So our frequent fliers for the most part have decided to travel by land in order to economize."

Those who continue to fly between Panama City and Colón are generally top free-zone executives for whom time is money.

"Our regular passengers arrive here every day, 10 minutes before the flight. They leave at 7:15 a.m., arrive in Colón by 7:30, and are at their desks in Colón by 8 a.m.," he said. These passengers, who generally travel on a monthly pass, pay 30% off the regular price of $72 round-trip.

Until recently, Colón was the airline's leading destination from Panama City -- but no longer. According to airline statistics, David now represents 23% of all Aeroperlas passenger traffic, followed by Isla Contadora (14%), Colón (13%) and Bocas del Toro (10%). Other places the airline flies to include Bahia Piñas, Changuinola, Chitre, El Real, Carchin, Jaque, La Plma, Sambu, Santiago and 20 villages in the San Blas Islands.

"Bocas del Toro has opened up to tourism, so it's now much more important than before," says Morales, noting that Aeroperlas is heavily promoting Bocas and other tourist destinations in an effort to stimulate sales.

Other hot tourist spots include the beautiful San Blas Islands, known for the indigenous Kuna Indians and their unique mola designs, as well as Changuinola -- a banana town in northwestern Panama, and the gateway to the 207,000-hectare Parque Internacional de la Amistad which Panama shares with Costa Rica.

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