Flying Low.

ANOTHER ONE HITS THE RUNWAY, SO TO SPEAK. U.S. AVIATION regulators, claiming Panama just doesn't meet air safety standards, downgraded the Central American country to so-called Category 2.

* "It was some sort of surprise. Panama thought it had more time to fix the problems," says Pedro Heilbron, CEO of Panama's flagship airline, Copa.

* Until May, Panama sat in Category 1--indicating it met global safety standards--along with Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico and Peru. Now it joins 10 other Latin American countries that the United States has told to improve their safety practices. There are only two safety categories.

* Paul Takemoto, spokesman for the U.S. Federal Aviation Administration (FAA), says Panama was warned it could be downgraded. "Their ability to get their status back into Category 1 is entirely up to them," he adds.

* The FAA does not release the specific reasons for the downgrades, which pertain to the countries, not the airlines. However, the Category 2 designation now means Copa cannot add flight frequencies or routes to the United States. Heilbron says Copa's operations will not be immediately affected. "We have no plans to add new frequencies at this time," he adds.

* The downgrade also means Copa's U.S. partner, Continental Airlines, must discontinue its arrangement in which a single flight carries both Copa and Continental flight numbers. "We don't anticipate big problems," says Continental spokeswoman Macky Osorio. "We'll just continue flying without the code-share arrangement."

* Although Costa Rica and Peru in the past year returned to Category 1 status, El Salvador was downgraded. Some industry insiders say Trinidad and Tobago could be the next nation to get hit with a Category 2 assessment.