Category Archives: Copa Holdings

Copa Holdings reports net profit of $104.0 million, updates on the MAX, will early retire the E190

E190 fleet to be retired in 2021

Copa Holdings, S.A. has announced financial results for the third quarter of 2019 (3Q19).

The following financial information, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS). Unless otherwise stated, all comparisons with prior periods refer to the third quarter of 2018 (3Q18).

OPERATING AND FINANCIAL HIGHLIGHTS

  • ▪  Copa Holdings reported net profit of US$104.0 million for 3Q19 or earnings per share (EPS) of US$2.45, compared to net profit of US$57.6 million or earnings per share of US$1.36 in 3Q18.
  • ▪  Operating profit for 3Q19 came in at US$132.9 million, representing a 70.9% increase from an operating profit of US$77.8 million in 3Q18.
  • ▪  Total revenues for 3Q19 increased 5.3% to US$708.2 million. Yield per passenger mile increased 7.9% to 12.5 cents and revenue per available seat mile (RASM) increased 9.4% to 11.1 cents.
  • ▪  Operating cost per available seat mile (CASM) increased 0.5% to 9.0 cents in 3Q19. Excluding fuel costs, CASM increased 5.5% from 5.9 cents in 3Q18 to 6.2 cents in 3Q19, mainly due to the decrease in capacity related to the grounding of the Boeing MAX fleet.
  • ▪  Operating margin for 3Q19 came in at 18.8%, 7.2 percentage points higher than the 11.6% generated in 3Q18.
  • ▪  While capacity (measured in available seat miles, or ASMs) decreased by 3.7% in 3Q19 due to the grounding of the Boeing MAX fleet, consolidated passenger traffic (measured in revenue passenger miles, or RPMs) decreased by only 2.2%. As a result, consolidated load factor for the quarter increased 1.4 percentage points to 85.6%.
  • ▪  The sum of cash, short-term and long-term investments was US$885.5 million at the end of 3Q19, representing approximately 33% of the last twelve months’ revenues.
  • ▪  Despite the operational challenges presented by the grounding of its Boeing MAX fleet, Copa Airlines delivered an on-time performance of over 92% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.
  • ▪  Copa Holdings ended the quarter with a consolidated fleet of 103 aircraft – 68 Boeing 737-800s, 14 Boeing 737-700s, 15 Embraer 190s (top) and 6 Boeing MAX 9s.
  • ▪  The Company has not taken any aircraft deliveries since the world-wide grounding of the Boeing MAX fleet took effect in March 2019. According to its original growth plan for 2019, the Company should have received six additional Boeing MAX 9s during the first three quarters of the year and would have received one more in the fourth quarter to end the year with 13 Boeing MAX9 aircraft.Subsequent Events
  • ▪  Copa Holdings will pay its fourth quarterly dividend of $0.65 per share on December 13, to all Class A and Class B shareholders on record as of November 29, 2019.
  • ▪  As part of the world-wide grounding of the Boeing MAX fleet, the Company has removed all Boeing MAX operations from its schedule until mid-February 2020.
  • ▪  As part of its plan to increase efficiencies, the Company has decided to accelerate the exit of its E190 fleet (top) and is planning to sell the remaining 14 aircraft over the next 18 months, 3 years earlier than previously planned. This anticipated exit could result in a book loss in the range of US$90 million related to the sale of the aircraft and spare parts inventory.

Despite the operational and financial impact of the grounding of its Boeing MAX fleet, Copa Holdings delivered a great quarter, with strong financial results and outstanding operational metrics. Higher load factors and yields resulted in a significant unit revenue increase, which generated a 18.8% operating margin for the quarter, a 7.2 percentage point increase over 3Q18. In terms of operational results, the Company delivered a 92% on-time performance and 99.8% completion factor, placing it again among the best in the industry.

The Company ́s consolidated operating revenue increased 5.3% to US$708.2 million during the quarter, despite a 3.7% decrease in capacity compared to 3Q18.

Load factor came in at 85.6%, or 1.4 percentage points above 3Q18. Yields improved 7.9% to 12.5 cents. As a result, passenger revenues per ASM (PRASM) increased 9.7% to 10.7 cents in 3Q19.

Total operating expenses for 3Q19 decreased 3.2% to US$575.3 million, while operating expenses per ASM (CASM) increased 0.5% to 9.0 cents. Excluding fuel costs, CASM increased 5.5% to 6.2 cents, mainly due to the capacity reduction resulting from the grounding of the Boeing MAX fleet.

Aircraft fuel expense decreased by 12.6%, or US$25.5 million, compared to 3Q18 due to lower jet fuel prices and fewer gallons consumed given the lower capacity. The Company’s effective jet fuel price decreased 10.2%, from an average of US$2.40 per gallon in 3Q18 to an average of US$2.16 per gallon in 3Q19.

The Company recorded non-operating expense of US$16.6 million for 3Q19 compared to non-operating expense of US$8.9 million in 3Q18. The non-operating expense in 3Q19 was mostly comprised of a net interest expense of US$6.6 million and a US$9.6 million translation loss due to foreign currency fluctuations, primarily resulting from the significant devaluation of the Argentine Peso.

Copa Holdings closed the quarter with US$ 885.5 million in cash, short-term and long-term investments, representing approximately 33% of last twelve months ́ revenues.

Total debt at the end of 3Q19 amounted to US$1.10 billion compared to US$1.29 billion at the end of 2018, all of which is related to aircraft financing. At the end of the quarter, the Company’s lease liability- adjusted net debt to EBITDA ratio was 0.8 times.

The company has a very solid business model, which is based on operating the best and most convenient network for intra-Latin America travel from its Hub of the Americas® based in Panama’s advantageous geographic position, with the region’s lowest unit costs, best on-time performance, and a strong balance sheet. Going forward, the Company expects to continue strengthening its long-term competitive position by taking advantage of new growth opportunities and implementing initiatives to further strengthen its network and product, while continuing to reduce unit costs.

Top Copyright Photo: Copa Airlines Embraer ERJ 190-100 IGW HP-1556CMP (msn 19000016) SAL (Tony Storck). Image: 922298.

Copa Airlines aircraft slide show:

Copa Holdings reports a larger second quarter net profit

Copa Holdings, S.A. (Copa Airlines) (Panama City) has its announced financial results for the second quarter of 2015 (2Q15).

Copa Airlines logo-2

OPERATING AND FINANCIAL HIGHLIGHTS:

Copa Holdings reported net income of $64.1 million (all amounts are in US dollars) for 2Q15, or diluted earnings per share (EPS) of $1.46. Excluding special items, Copa Holdings would have reported an adjusted net income of $41.0 million, or $0.93 per share, a 64.7% decrease over adjusted net income of $115.9 million and $2.61 per share for 2Q14.

Operating income for 2Q15 came in at $49.2 million, a 62.5% decrease over operating income of $131.2 million in 2Q14. Operating margin for the period came in at 9.1%, compared to 19.5% in 2Q14, as a result of lower unit revenues partially offset by lower unit costs.

Total revenues decreased 20.1% to $538.4 million. Yield per passenger mile decreased 20.4% to 13.2 cents and operating revenue per available seat mile (RASM) decreased 24.4% to 10.0 cents.

For 2Q15, passenger traffic (RPMs) decreased 0.2% on a 5.8% capacity expansion. As a result, consolidated load factor came in at 72.9%, or 4.3 percentage points below 2Q14.

Operating cost per available seat mile (CASM) decreased 14.7%, from 10.7 cents in 2Q14 to 9.1 cents in 2Q15, mainly due to lower jet fuel costs. CASM excluding fuel decreased 6.3% to 6.2 cents mainly due to lower sales related expenses and lower overhead expenses.

Cash, short-term and long-term investments ended 2Q15 at $1.15 billion, representing 46% of the last twelve months’ revenues. Of this amount, 39%, or $452.2 million, is in Venezuela pending repatriation due to government currency controls.

During the second quarter, Copa Airlines took delivery of two Boeing 737-800 aircraft, and returned a leased Boeing 737-700.

Furthermore, the Company subleased one of its Boeing 737-700s to United Airlines. As a result, Copa Holdings ended the quarter with a consolidated fleet of 98 aircraft.

For 2Q15, Copa Holdings reported consolidated on-time performance of 90.4% and a flight-completion factor of 99.7%, maintaining its position among the best in the industry.

SUBSEQUENT EVENTS

During July 2015, Copa Holdings subleased one more of its Boeing 737-700s to United Airlines.

Copa Holdings will pay its third quarter dividend of US$0.84 per share on September 15, 2015, on all outstanding Class A and Class B shares, to stockholders of record as of August 31, 2015.

Note:

(1) Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 2Q15, 2Q14, and 1Q15 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges, and also exclude charges/gains related to the Venezuelan currency.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Copa Airlines Boeing 737-86N HP-1726CMP (msn 38024) departs from Los Angeles.

Copa Airlines aircraft slide show: AG Airline Slide Show

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Copa Holdings reports first quarter net income of $113.1 million, down 25.3% from $151.4 million

Copa Holdings, S.A. (Copa Airlines and Copa Airlines Colombia) (Panama City) has announced its financial results for the first quarter of 2015 (1Q15):

Copa Holdings reported net income of $113.1 million (all amounts in US dollars) for 1Q15, or diluted earnings per share (EPS) of $2.57. Excluding special items, Copa Holdings would have reported an adjusted net income of $106.0 million, or EPS of $2.41 per share, a 30.4% decrease over adjusted net income of $153.6 million and $3.46 per share for 1Q14.

Operating income for 1Q15 came in at $127.3 million, a 28.1% decrease over operating income of $177.0 million in 1Q14. Operating margin for the period came in at 20.1%, compared to 24.8% in 1Q14, as a result of lower unit revenues partially offset by lower unit costs.

Total revenues decreased 11.5% to $631.8 million. Yield per passenger mile decreased 16.2% to 14.8 cents and operating revenue per available seat mile (RASM) decreased 18.3% to 11.6 cents. Adjusting for an 8.5% increase in length of haul, yields and RASM decreased 12.7% and 14.9%, respectively.

For 1Q14, passenger traffic (RPMs) grew 5.8% on a 8.3% capacity expansion. Consolidated load factor came in at 76.3%, 1.8 percentage points below 1Q14.

Operating cost per available seat mile (CASM) decreased 13.2%, from 10.7 cents in 1Q14 to 9.3 cents in 1Q15 mainly due to lower jet fuel costs. CASM, excluding fuel, decreased 3.4% to 6.3 cents mainly due to lower sales related expenses and lower overhead expenses.

Cash, short-term and long-term investments ended 1Q15 at US$1.16 billion, representing 44% of the last twelve months’ revenues. Of this amount, 41% or US$470.1 million was in Venezuela pending repatriation due to government currency controls.

During the first quarter, Copa Airlines took delivery of one Boeing 737-800 aircraft, and returned a leased Boeing 737-700. As a result, Copa Holdings ended the quarter with a consolidated fleet of 98 aircraft.

On April 10, 2015, Copa Holdings signed an order with Boeing to purchase 61 737-MAX aircraft, worth US$6.6 billion at Boeing list prices. The aircraft are expected to be delivered between 2018 and 2024.

Copyright Photo: TMK Photography/AirlinersGallery.com. Copa Airlines is proud to be the official airline of the “Legend Series,” an annual event arranged by Major League Baseball in conjunction with Panamanian business people and with the support of the Panamanian Government. Copa Airlines decorated this Boeing 737-8V3 registered as HP-1533CMP (msn 35067) as the “Official Airlines of Major League Baseball” showing the logos of the National League on this side. On the other side is the American League teams.

Copa Airlines aircraft slide show: AG Airline Slide Show

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Copa Holdings earnings dip for the fourth quarter and 2014 due to fuel hedges and the devaluation of Venezuelan Bolivar

Copa Holdings, S.A. (Copa Airlines and Copa Airlines Colombia) (Panama City) announced its financial results for the fourth quarter (4Q) of 2014 and the full year 2014.

Copa Holdings reported net income of $35.9 million for the fourth quarter or earnings per share (EPS) of $0.81, as compared to net income of $113.2 million or EPS of $2.55 in 4Q13. Excluding special items, which for 4Q14 includes a non-cash loss of $89.1 million associated with the mark-to-market of fuel hedge contracts, and a $0.4 million loss related to devaluation of the Venezuelan Bolivar, Copa Holdings would have reported adjusted net income of $125.3 million or adjusted EPS of $2.83, compared to adjusted net income of $141.8 million or adjusted EPS of $3.20 in 4Q13.

Net income for full year 2014 reached $371.4 million or EPS of $8.37, compared to $427.5 million or EPS of $9.62 for full year 2013. Excluding special items, which for 2014 includes a non-cash loss of $116.6 million associated with the mark-to-market of fuel hedge contracts, and a $6.6 million loss related to the devaluation of the Venezuelan Bolivar, Copa Holdings would have reported an adjusted net income of $494.6 million or EPS of $11.14, compared to adjusted net income of $467.4 or adjusted EPS of $10.52 for full year 2013.

During the fourth quarter, Copa Airlines took delivery of two Boeing 737-800 aircraft. As a result, Copa Holdings ended the year with a consolidated fleet of 98 aircraft.

For 2014, Copa Holdings reported consolidated on-time performance of 90.3% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 737-8V3 HP-1714CMP (msn 40891) approaches the runway at Las Vegas.

Copa Airlines aircraft slide show: AG Airline Slide Show

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Copa Holdings reports net income of $118.2 million for the second quarter

Copa Holdings, S.A. (Copa Airlines and Copa Airlines Colombia) (Panama City) reported net income of $118.2 million (US) for the second quarter, or diluted earnings per share (EPS) of $2.66 (US). Excluding special items, Copa Holdings would have reported an adjusted net income of $115.9 million (US), or $2.61 per share, a 36.4% increase over adjusted net income of $85.0 million (US) and $1.92 per share for the second quarter.

Operating income for second quarter came in at $131.2 million (US), a 34.3% increase over operating income of $97.7 million (US) in the second quarter. Operating margin for the period came in at 19.5%, compared to 16.5% in the second quarter, as a result of higher unit revenues.

In other news, Copa Airlines will add two new routes, from Panama City to Campinas, Brazil and Cayo Santa Maria, Cuba.

New destinations:

Campinas, Brazil: Copa Airlines will offer one daily flight to Campinas, its eighth destination in Brazil. Called the “Silicon Valley” of Brazil, Campinas is home to the second largest concentration of research and development centers in the country. It is also boasts Brazil’s fourth-largest financial sector. The new flight will begin operating in December 2014.

Cayo Santa María, Cuba: Copa Airlines will offer two weekly flights to its second destination in Cuba, increasing tourist access to beautiful beaches; hotel accommodations including many “all inclusive” hotels, approximately 12,500 rooms, 5-star hotels and the the Pedraplén de Caibarién, an impressive 48km road stretching across the sea to Cayo Santa Maria, awarded the international “Puente de Alcántara” prize for best Latin American civil works. This new flight will also begin operation in December 2014.

With the addition of these new destinations, by the end of 2014 Copa Airlines will offer flights to 69 destinations in 30 countries in North, Central, and South America and the Caribbean from its Hub of the Americas at Tocumen International Airport in Panama City, Panama. The Hub of the Americas continues to offer more international flights to destinations in Latin America than any other airline.

During the first six months of 2014, Copa Airlines added four new Boeing Next Generation 737-800 aircraft equipped with the innovative Split Scimitar Winglets to its fleet, bringing its total to 94 aircraft.

During the second half of 2014, Copa will add four new high-tech Boeing 737-800 Next Generation aircraft, bringing its fleet total to 98 aircraft and increasing the number of available seats by 10 percent over 2013.

Top Copyright Photo: Jay Selman/AirlinersGallery.com (all others by Copa). Boeing 737-8V3 HP-1714CMP (msn 40891) arrives at Las Vegas.

Copa Airlines: AG Slide Show

The “Hub of the Americas”:

Copa Airlines PTY Hub of the Americas (Copa)(LR)

Routes from the Panama City hub:

Copa logo

Copa Airlines 8.2014 PTY Route Map

Copa Holdings reports net income of $151.4 million for the first quarter

Copa Holdings, S.A. (Copa Airlines and Copa Airlines Colombia) (Panama City) announced its financial results for the first quarter of 2014 (1Q14):

Copa Holdings reported net income of $151.4 million (US) for 1Q14, or diluted earnings per share (EPS) of US$3.41. Excluding special items, Copa Holdings would have reported an adjusted net income of $153.6 million, or $3.46 per share, a 23.5% increase over adjusted net income of US$124.4 million and US$2.80 per share for 1Q13.

Operating income for 1Q14 came in at US$177.0 million, a 24.1% increase over operating income of US$142.6 million in 1Q13. Operating margin for the period came in at 24.8%, compared to 22.2% in 1Q13, as a result of higher unit revenues and lower unit costs.

Total revenues increased 11.3% to US$713.6 million. Yield per passenger mile increased 0.5% to 17.7 cents and operating revenue per available seat mile (RASM) increased 1.9% to 14.2 cents. Furthermore, adjusting for a 3.7% increase in length of haul, yields and RASM increased 2.3% and 3.7%, respectively.
For 1Q14, healthy demand trends resulted in passenger traffic (RPMs) growth of 11.0% on a 9.3% capacity expansion. Consolidated load factor came in at 78.1%, or 1.2 percentage points higher than 1Q13.

Operating cost per available seat mile (CASM) decreased 1.5%, from 10.9 cents in 1Q13 to 10.7 cents in 1Q14 due to lower jet fuel costs. CASM, excluding fuel, increased 1.0% to 6.6 cents mainly due to full year effect of 2013 newly leased aircraft.

Cash, short term and long term investments ended 1Q14 at US$1.1 billion, representing 41% of the last twelve months’ revenues. Of this amount, 44% is in Venezuela pending repatriation due to government currency controls.

During the first quarter, Copa Airlines took delivery of one Boeing 737-800 aircraft. As a result, Copa Holdings ended the quarter with a consolidated fleet of 91 aircraft.

For 1Q14, Copa Holdings reported consolidated on-time performance of 92.3% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.

Copyright Photo: Steve Bailey/AirlinersGallery.com. Newly-built Boeing 737-8V3 HP-1836CMP (msn 40782) at Boeing Field in Seattle was handed over to Copa Airlines on March 28, 2014.

Copa Airlines (Panama): AG Slide Show

 

Copa Airlines orders Split Scimitar Winglet Systems for its Boeing 737s

Aviation Partners Boeing logo

Aviation Partners Boeing (APB) (Seattle) has announced the order of up to 100 Split Scimitar Winglet Systems for Boeing Next-Generation 737 aircraft by Copa Holdings, S.A.  (Copa Airlines) (Panama City). This program is the culmination of a five year design effort using the latest computational fluid dynamic technology to redefine the aerodynamics of the Blended Winglet into an all new Split Scimitar Winglet. The unique feature of the Split Scimitar Winglet is that it uses the existing Blended Winglet structure, but adds new strengthened spars, aerodynamic scimitar tips, and a large ventral strake. This advanced technology winglet is the ultimate winglet in terms of performance, without increasing existing wing span.

Since launching the program early this year, APB has now taken orders and options for over 550 Split Scimitar Winglet systems. Over the last 10 years, APB has sold over 7,000 Blended Winglet Systems.  Nearly 5,000 Blended Winglet Systems are now in service with over 200 airlines in more than 100 countries. APB estimates that Blended Winglets have saved airlines worldwide more than 3.9 billion gallons of jet fuel to-date.

Copa 737-800 SSWL Daigram (APB)(LR)

Copa 737-800 SSWL Diagram-1 (APB)(LR)

Images: Aviation Partners Boeing.

Copa Airlines: AG Slide Show