Air cargo in Panama: Navigating trade, commerce

Panama, globally recognized for its iconic Panama Canal and known as a hub for international trade and logistics, is increasingly becoming a significant player in the global air cargo industry. With a strong economy, strategic location and a range of air service agreements, Panama is drawing the attention of international airlines and cargo operators. In this post, we delve into Panama's rising role in the aviation industry. Robust economy, strategic location Panama boasts a dollar-based economy characterized by low inflation and zero foreign exchange risk. For half a decade leading up to the pandemic, the country experienced impressive annual economic growth, averaging 4.6 percent. This rapid growth placed Panama as a leader among Central American economies. In 2022, Panama's overall exports amounted to 3.2 million tonnes, valued at more than $3.6 billion. Of this, $254 million originated from Tocumen International Airport (PTY) in Panama City. Meanwhile, imports for the year totaled 9.9 million tonnes, valued at $15.2 billion, with $5 billion funneling through PTY. China, Japan and South Korea stood as the top three export destinations, while imports mainly came from the United States, China and Mexico. The services sector, which comprises banking, tourism and logistics, is crucial to Panama’s economy. The latter is pivotal to the country's economic landscape, given its role as a global trade and transportation center. Panama is unique, as it features three major Free Trade Zones: Ciudad del Saber, Panama Pacifico and the Colon Free Zone (CFZ). Activities within these zones contribute significantly to Panama's GDP. Notably, the CFZ alone accounts for approximately 8.5% of the nation’s GDP Aircraft connectivity, agreements Panama's role as a global logistics hub extends to its aviation sector. The country has entered into many agreements and partnerships enhancing its air connectivity and cargo operations. Here are some notable air service agreements: Canada Cargojet , a Canadian all-cargo airline, has submitted an application to the Canadian Transportation Agency (CTA) to operate six all-cargo flights per week between Canada and Panama for one year. While Cargojet is authorized to conduct scheduled international all-cargo flights, this route requires additional approval. Under the existing arrangement between the governments, Canadian carriers can operate up to nine weekly scheduled flights between the two countries. Cargojet has not been allocated any of these nine flights. Therefore, it needs extra bilateral authority to operate a total of six scheduled international all-cargo flights per week between Canada and Panama, which necessitates a modification to its license. In accordance with Subsection 78(2), the CTA has granted Cargojet a temporary license modification. This change allows Cargojet to operate six all-cargo flights per week between Canada and Panama for one year, effective Oct. 21. China Panama has been actively working on air transport agreements with China, aiming to strengthen economic ties, especially around air cargo operations. In November 2017, Panama and China signed an "aviation agreement." This agreement was incorporated into Panamanian law in March 2018, although it remains unclear whether China has ratified the agreement. The agreement states that both countries are signatories of the Chicago Convention and establishes open skies between them. Netherlands (Aruba) An agreement between the Netherlands, specifically Aruba, and Panama came into effect in 2016, granting airlines from Aruba and Panama the right to operate unlimited flights over and into each other’s country. There is no restriction on the number of companies that can exercise this right. However, both countries have the right to manage operating licenses when certain requirements are or are not met. New Zealand Although not yet signed, it is reported that Panama has been in discussions with New Zealand regarding agreements that could bolster their aviation relations. Qatar Panama and Qatar have signed two agreements related to air services and cultural cooperation. These agreements allow for unlimited passenger and commercial flights between the two countries, promoting stronger ties and collaboration in the aviation sector. These passenger aircraft would also be able to carry freight in the cargo holds. Turkey Relations between Turkey and Panama have been growing, with embassies opened in both countries. Turkish Airlines started flights to Panama in 2016, and agreements on cooperation areas, including trade and tourism, have been signed. Operator updates DHL: The company has been expanding operations in Panama and recently placed its third 767-300BCF under its Panama-based subsidiary carrier, DHL Aero Expreso (DAE). The 2012 vintage 767-300BCF (41746, ex-LATAM) will be flown by DAE after the aircraft has completed its certification and registration process in Panama and entered service in February. In June, European Air Transport Leipzig (EAT) ferried two 757-200Fs to Panama to increase capacity temporarily and replace 29610 (ex-Far Eastern Transport) , which sustained heavy damage during a landing at Juan Santamaria International Airport (SJO) in San Jose, Costa Rica, in April 2022. Copa Airlines: Copa Airlines, based in Panama, announced in 2021 that it planned to convert two 737-800s from its all-737 fleet into freighter aircraft. Unit 33709 was converted and re-entered service with Copa subsidiary Wingo Panama as HP-1522WWP. At the time of the original announcement, Cargo Facts speculated that the 2004-vintage unit 34006 would also be converted, however, only one aircraft is known to have been converted. Air cargo infrastructure and PTY Panama's role in the global aircraft industry is further bolstered by its infrastructure developments. Tocumen International Airport, one of the busiest airports in Central America, plays a crucial role in handling air cargo. Panama is also developing a multimodal air cargo hub at PTY. This hub will consist of a cargo terminal and a logistics zone, enhancing the country's competitiveness in the logistics sector. The terminal will focus on aeronautical operations and include modernization efforts to accommodate increased capacity, improved security and enhanced lighting for logistics operations. The logistics zone, operating under the Free Zone regime, will offer users tax, migratory and labor benefits, encouraging value-added activities and strengthening the competitiveness of logistics companies. In conclusion, Panama is becoming a key player in the global aircraft industry, thanks to its strategic location, strong economy and proactive approach to forging aviation agreements. With ongoing infrastructure developments and a growing presence of domestic and international cargo operators, Panama's role in the aviation sector is set to expand further, reinforcing its reputation as a global logistics and trade center.

Air cargo in Panama: Navigating trade, commerce

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