Copa Holdings, S.A. (Copa Airlines and Copa Colombia) has announced financial results for the second quarter of 2013:
OPERATING AND FINANCIAL HIGHLIGHTS
Copa Holdings reported net income of US$74.4 million for 2Q13, or diluted earnings per share (EPS) of US$1.68. Excluding special items, Copa Holdings would have reported an adjusted net income of $85.0 million, or $1.92 per share, a 45.3% increase over adjusted net income of US$58.5 million and US$1.32 per share for 2Q12.
Operating income for 2Q13 came in at US$97.7 million, a 34.5% increase over operating income of US$72.6 million in 2Q12. Operating margin for the period came in at 16.5%, compared to 14.1% in 2Q12, as a result of lower unit costs.
Total revenues increased 14.8% to US$592.0 million. Yield per passenger mile decreased 4.6% to 16.4 cents and operating revenue per available seat mile (RASM) decreased 2.5% to 12.8 cents. However, adjusting for a 7.3% increase in length of haul, yields decreased 1.2% and RASM increased 1.0%.
For 2Q13, passenger traffic (RPMs) grew 20.4% on a 17.7% capacity expansion. Consolidated load factor came in at 75.3%, or 1.7 percentage points above 2Q12.
Operating cost per available seat mile (CASM) decreased 5.2%, from 11.3 cents in 2Q12 to 10.7 cents in 2Q13. CASM, excluding fuel costs, decreased 2.6% to 6.7 cents.
Cash, short term and long term investments ended 2Q13 at US$848.7 million, representing 35.0% of the last twelve months’ revenues.
During the second quarter, Copa Airlines took delivery of one Boeing 737-800 aircraft. As a result, Copa Holdings ended the quarter with a consolidated fleet of 86 aircraft.
For 2Q13, Copa Holdings reported consolidated on-time performance of 89.3% and a flight-completion factor of 99.7%, maintaining its position among the best in the industry.
On July 17, 2013, Copa Airlines announced it will begin nonstop service four times a week from Panama to Tampa, Fla., on December 16, 2013. Tampa will be Copa Airlines’ ninth U.S. destination and its 66th destination overall.
On August 7, 2013, the Board of Directors of Copa Holdings resolved to change the Company’s dividend policy to increase the annual distribution to an amount equal to 40% of the prior years’ annual consolidated net income. In addition, dividends going forward will be distributed in equal quarterly installments during the months of March, June, September and December, subject to board approval each quarter. On August 7, 2013, the Board of Directors also approved dividend payments payable at the end of both 3Q13 and 4Q13, in amounts equal to 10% of the consolidated net income of 2012.
Consolidated Financial &
Revenue Passengers Carried (‘000)
PRASM (US$ Cents)
RASM (US$ Cents)
CASM (US$ Cents)
CASM Excl. Fuel (US$ Cents)
Breakeven Load Factor (1)
Fuel Gallons Consumed (Millions)
Avg. Price Per Fuel Gallon (US$ Dollars)
Average Length of Haul (Miles)
Average Stage Length (Miles)
Average Aircraft Utilization (Hours)
Operating Revenues (US$ mm)
Operating Income (US$ mm)
Net Income (US$ mm)
Adjusted Net Income (US$ mm) (1)
EPS – Basic and Diluted (US$)
Adjusted EPS – Basic and Diluted (US$) (1)
# of Shares – Basic and Diluted (‘000)
(1)Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 2Q13, 2Q12, and 1Q13 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges. Additionally, for 1Q13 excludes a US$13.9 million charge related to the devaluation of the Venezuelan currency.
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-8V3 WL HP-1721CMP (msn 40362) prepares to touch down in Miami.
Ryanair (Dublin) under the file “It was bound to happen”, has announced it will now sell advertising space on its 303 Boeing 737-800s. Although not a full logojet, a space by the nose and three other locations is being offered to any potential advertisers. The ultra-low fare airline issued this statement:
Ryanair, Europe’s only ultra-low cost carrier (ULCC), on July 17 offered businesses across the world the chance to advertise their brand on its fleet of 303 Boeing 737-800 aircraft and reach millions of European passengers through Europe’s largest and cheapest outdoor advertising medium. Ryanair operates over 1,600 flights per day, connecting 180 destinations in 29 countries, through over 1,600 routes and will carry more international passengers this year (81.5 million) than any other airline in the world. Companies can have their brand featured on four different locations on the Ryanair aircraft, including on the inner and outer winglets, front fuselage and rear fuselage, for a 12-month period, for a fraction of the price of a newspaper advert.
United Airlines (Chicago) has launched weekly nonstop service to St. Lucia from its Newark Liberty International Airport hub. The flights, which began on July 13, 2013, operate using Boeing 737-800 aircraft, with 16 United Business seats, 48 United Economy Plus seats and 90 United Economy seats.
United flight UA 1642 departs Newark Liberty (EWR) on Saturdays at 8:55 a.m. (0855), arriving at the Hewanorra International Airport (UVF) in St. Lucia at 1:48 p.m. (1348). The return flight, United UA 1643, departs St. Lucia on Saturdays at 2:38 p.m. (1438), arriving in Newark at 7:33 p.m. (1933). The service provides convenient connections to and from 22 cities in the United States, including Chicago, Boston and Washington, as well as several Canadian cities.
St. Lucia, United’s 17th destination in the Caribbean.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-824 N77261 (msn 31582) departs from Los Angeles International Airport.
Virgin Australia Airlines (Brisbane) has announced that from August 15, 2013 it will commence services between Melbourne and Hamilton Island.
The airline will operate its Boeing 737-800 aircraft on the new route with 8 Business Class and 168 Economy Class seats.
The flights will depart Melbourne at 8:30 am (0830) on Tuesdays, Thursdays, Saturdays and Sundays, arriving into Hamilton Island at 11:30 am (1130). The return flight departs Hamilton Island at midday (1200) on Tuesdays, Thursdays, Saturdays and Sundays arriving into Melbourne at 3:00 pm (1500). During off-peak months (between February and June), services will only operate on Tuesdays, Thursdays and Saturdays.
Copyright Photo: Micheil Keegan/AirlinersGallery.com. Boeing 737-8FE WL VH-YIA (msn 37824) prepares to land at Perth.
Alaska Airlines (Seattle) today (June 3) officially unveiled this colorful “Spirit of the Islands” logojet. The pictured Boeing 737-890 N560AS (msn 35179) is a special salute to the state of Hawaii. The airline issued this statement:
A specially painted Alaska Airlines jet adorned with a Honolulu high school student’s winning design honoring the culture of the Aloha State touched down today in Honolulu before a crowd of students, educators and travelers. The unique paint theme, dubbed the “Spirit of the Islands,” was created by 17-year-old Aaron Nee.
Winning designer Aaron Nee sees N560AS for the first time at Honolulu.
Nee’s design was selected from among more than 2,700 submissions by students across the Hawaiian Islands in a statewide “Paint-the-Plane” contest sponsored by Alaska Airlines, in partnership with the Hawaii State Department of Education and Hawaii Association of Independent Schools. A 10-member judging panel, comprised of Hawaii artists, educators and other local community members, carefully scored and selected the three top designs, which were then voted on by Hawaii residents in an online public vote.
As the grand prize winner, Nee received a trip for four to any of the carrier’s destinations and a $5,000 scholarship.
“This has been an incredible opportunity to share Hawaii’s beauty with people throughout the country,” said Nee. “This contest helped me to sharpen my graphic design skills and demonstrated that with hard work, attention to detail and determination, great things are possible.”
Nee’s winning design displays a voyaging canoe depicting the cultural diversity of the Islands, a bright yellow hibiscus (the state flower), the Hawaiian Island chain and the phrase “Spirit of the Islands.”
The soon-to-be Kaiser High School senior is a nearly straight-A student and a decorated member of the school’s Air Force ROTC program. Known for his artistic ability and interest in graphic design and athletics, Nee said he plans to invest his $5,000 for college and take his family to visit relatives in New York, where he hopes to see snow for the first time.
The “Spirit of the Islands” Boeing 737-800 was revealed to Nee at Honolulu International Airport on June 3, where he was joined by his parents, Robin and Mitch Connell, and father Aaron Garrett Nee, as well as Hawaii Lt. Gov. Shan Tsutsui, Hawaii Tourism Authority President and CEO Mike McCartney, Kaiser High School Principal John Sosa and several of Nee’s teachers. Also joining the welcoming ceremony were the 12 finalists and honorable mention winners, who received prizes and scholarships for their entries, as well.
Izabela Hamilton, a 12th grader at Seabury Hall on the island of Maui, placed second for her design featuring a male and female hula dancer against a backdrop of ocean waves and windswept mountain cliffs. Sophia Cleek, a sixth grader at Kapolei Middle School on Oahu, placed third for her design depicting a voyaging canoe sailing around the Islands. Hamilton and Cleek will each receive a trip for four to any Alaska Airlines destination and a $1,000 scholarship. The 10 other honorable mention winners were awarded a $1,000 scholarship each.
“Spirit of the Islands” trivia
The 129-foot-long Boeing 737-800 has a wingspan of 117 feet and a cruising speed of 530 mph.
A crew of 18 worked around the clock for 24 days at Aviation Technical Services in Everett, Wash., to paint the plane, which required 26 colors and about 140 gallons of paint, including 20 gallons of primer. In addition, 28,800 yards of masking tape were used.
The plane accommodates 157 passengers and six crew members.
The aircraft will fly throughout most of Alaska Airlines’ network, connecting destinations from Hawaii to San Diego and from Anchorage as far south as Mexico.
The “Spirit of the Islands” contest is the third time Alaska Airlines has turned to the public to paint a plane. The Spirit of Alaska Statehood aircraft paint scheme was created by a 16-year-old Sitka student in a similar statewide contest celebrating Alaska’s 50-year anniversary of statehood. In 2011, two soccer fans designed the MLS Portland “Timbers Jet” to celebrate the airline’s jersey sponsorship of the Portland, Ore., soccer team.
Copyright Photo: Royal S. King/AirlinersGallery.com. Please click on the photo for the full-size view.
What does it take to paint an aircraft like this? Here is a previous video on the painting of “Salmon-Thirty-Salmon II“:
United Airlines (Chicago) will begin weekly year-round service between its hub at Washington-Dulles International Airport and both Guatemala City, Guatemala, and San Jose, Costa Rica, on April 13. The airline also will begin weekly year-round service between its Chicago O’Hare hub and San Jose the same day.
All routes will be operated with Boeing 737-800 aircraft with 16 seats in United Business, 48 seats in Economy Plus and 90 seats in United Economy class. The new flights complement United’s existing service to Guatemala City and San Jose from the airline’s hubs in New York and Houston.
Copyright Photo: Jay Selman. Boeing 737-824 WL N76516 (msn 37096) with the special Eco-Skies/Commitment to the Environment markings arrives at Charlotte.
Air Lease Corporation (Los Angeles) announced a lease agreement with Aerolíneas Argentinas(Buenos Aires)for six new Boeing 737-800 aircraft, each on lease for twelve years. The aircraft are scheduled for delivery between November 2014 and February 2016.
Copyright Photo: Marcelo F. De Biasi. Boeing 737-86J LV-CTC (msn 30570) lands at Aeroparque Jorge Newbery Airport in downtown Buenos Aires.
Delta Air Lines (Atlanta) will offer new and expanded summer service from Montana to Atlanta and Los Angeles, effective on June 22, 2013.
The new service changes include:
Atlanta to Bozeman expanded from twice per week to three weekly
Atlanta to Kalispell expanded from once per week to twice weekly
New Saturday service from Atlanta to Missoula
New Saturday service from Los Angeles to Bozeman
Delta’s new service between Atlanta and Bozeman, Kalispell and Missoula, will be operated with Boeing 737-800 aircraft. The fourth flight, between Bozeman and Los Angeles, will be operated by Delta Connection carrier SkyWest Airlines (St. George) using a 76-seat two-class Bombardier CRJ900.
Returning summer seasonal service between Atlanta and Bozeman will operate Wednesdays and Saturdays on a Boeing 757-200, while Atlanta-Kalispell service will operate Saturdays on Boeing 737-800 aircraft.
Delta has served Montana since 1927 and offers more flights statewide than any other airline. During the peak summer travel season, Delta serves eight Montana communities with more than 1,300 monthly departures and offers 54 percent more seats than its largest competitor. In 2012, the airline carried 1.3 million passengers to and from Montana.
Montana markets Delta provides service include: Butte, Billings, Bozeman, Great Falls, Helena, Kalispell, Missoula and West Yellowstone.
Delta’s new and returning summer seasonal flights in Montana are scheduled as follows:
Bozeman/Atlanta Operated on a Boeing 737-800
Atlanta – 2:55 p.m.
June 22-Aug. 24
Bozeman – 8:15 a.m.
June 23-Aug. 25
Bozeman/Atlanta Operated on a Boeing 757-200
Atlanta – 11:00 a.m.
June 22-Aug. 31
Bozeman – 2:00 p.m.
June 22-Aug. 31
Bozeman/Los Angeles Operated by Delta Connection carrier Skywest on a CRJ900
Los Angeles – 9:00 a.m.
June 22-Aug. 24
Bozeman – 12:50 p.m.
June 22-Aug. 24
Kalispell/Atlanta Operated on a Boeing 737-800
Atlanta – 3:00 p.m.
June 22-Aug. 24
Kalispell – 8:00 a.m.
June 23-Aug. 25
Kalispell/Atlanta Operated on a Boeing 737-800
Atlanta – 9:50 a.m.
June 22-Aug. 31
Kalispell – 1:10 p.m.
June 22-Aug. 31
Missoula/Atlanta Operated on a Boeing 737-800
Atlanta – 10:25 a.m.
June 22-Aug. 31
Missoula – 1:45 p.m.
June 22-Aug. 31
Copyright Photo: Michael B. Ing. Boeing 757-232 N610FL (msn 22817), formerly the pink Breast Cancer Awareness 757 aircraft, climbs away from Ted Stevens Anchorage International Airport (ANC).
American Airlines (Dallas/Fort Worth) announced today that it will launch new service this summer to San Diego and Mexico from its hubs in Miami (MIA) and Dallas/Fort Worth (DFW), respectively.
Beginning June 12, American will offer more choices for travel from its Miami hub with the addition of daily service between Miami and San Diego International Airport (SAN). This flight will be operated with a Boeing 737-800 aircraft (above) with 150 seats. With the addition of this route, American and American Eagle will now serve San Diego from each of its five hubs, with a combined total of 25 daily flights.
The schedule for the new service between Miami and San Diego will be as follows:
With the addition of this route, American will serve 115 destinations from Miami with more than 300 daily flights.
Also beginning June 12, American Eagle will begin service between DFW and two new destinations in Mexico – Ignacio Pesqueira Garcia International Airport in Hermosillo (HMO) and General Leobardo C. Ruiz International Airport in Zacatecas (ZCL), pending government approval. Flights between DFW and HMO will operate once daily, and flights between DFW and ZCL will operate on Monday, Wednesday and Saturday. The flights will be operated with a 44-seat Embraer ERJ-140 aircraft.
The schedule for the new service to Mexico will be as follows:
Mon., Weds., Sat.
Mon., Weds., Sat.
*all flights begin June 12, 2013, pending government approval
With the addition of flights to Hermosillo and Zacatecas, American and American Eagle will serve a total of 20 destinations in Mexico.
In other news, American Airlines today filed an application with the U.S. Department of Transportation (DOT) for the right to fly additional United States – Brazil frequencies beginning in 2013 and 2014. American will use these frequencies to add one new daily round trip service from its Los Angeles and Chicago hubs to Sao Paulo
Copyright Photo: Mark Durbin. Boeing 737-823 WL N908NN (msn 39238) in the new corporate look taxies at San Francisco.
The QANTAS Group (QANTAS Airways) (Sydney) has announced it will upgrade its entire fleet of Airbus A330s and order new Boeing 737-800s to drive its strategy in the international and domestic markets.
Beginning in late 2014, the Group will reconfigure the interior of 10 Airbus A330-300s and 20 A330-200s with a new flat seat in business class, refreshed economy cabin and a new inflight entertainment offering.
The A330-300s will be operated by QANTAS International on its network between Australia and Asia, while the A330-200s will be operated by QANTAS Domestic on routes between the east coast and Perth – enabling the final retirement of the Group’s Boeing 767s.
The Group will also purchase five additional Boeing 737-800 aircraft for QANTAS Domestic (for delivery during 2014) and extend the leases on two existing Boeing 737-800s this year.
The A330 reconfiguration program and the additional Boeing 737-800 orders do not affect the Group’s planned capital expenditure of $1.6 billion in 2012/13 and $1.5 billion in 2013/14..
The airline will also upgrade 20 A330-200s for QANTAS Domestic’s wide body fleet – meaning the trans-continental flights will be operated by aircraft featuring lie-flat beds in business and the latest inflight entertainment technology.
The Boeing 737-800 fleet will ultimately grow to 75 aircraft.
The older narrow body Boeing 737-400s will be phased out by the end of 2013 and Boeing 767s by mid-2015.
The group recently announced new orders for five additional Boeing 717 aircraft and three additional Bombardier Q400s for its regional operations.
On the financial side, the Group announced the following statement:
The Qantas Group has announced a statutory profit after tax of A$111 million (all currencies in Australian dollars) (and an underlying profit before tax of A$223 million) for the six months ended 31 December 2012.
-Statutory Profit After Tax: $111 million, up 164 per cent
– Underlying Profit Before Tax1: $223 million, up 10 per cent
– Qantas Loyalty: record result2, underlying EBIT up 15 per cent
– Qantas International: 65 per cent improvement, turnaround on course
– Qantas Domestic and Jetstar: solid earnings despite excess capacity in domestic market
– Emirates partnership announced, interim authorisation granted, fares on sale
– No interim dividend declared
The result is in line with previous guidance and reflects progress in the Group’s strategy, despite challenging conditions in international and domestic air travel markets.
All operating segments of the Group’s portfolio were profitable with the exception of Qantas International. However, losses in QANTAS International were reduced by 65 per cent in 1H13 compared with 1H12.
Underlying profit before tax for the first half included $125 million in revenue from the agreement negotiated with Boeing in August 2012 to restructure the Group’s Boeing 787 order.
The Group incurred $136 million in one-off transformation costs during the first half, which have been recognised as items outside of underlying profit before tax.
CEO commentary and Group performance
Qantas CEO Alan Joyce said the Group was delivering against all its strategic goals.
“During 1H13 we increased underlying profit by 10 per cent, announced a global aviation partnership with Emirates3, launched Jetstar Japan, reinforced our position in the Australian domestic market, reduced comparable unit costs by 3 per cent4, announced the early repayment of $650 million in debt, commenced a share buy-back and sold non-core assets,” Mr Joyce said.
“In total, the Group achieved $172 million in transformation benefits in 1H13.
“The operating environment remains complex and volatile, but we are now beginning to realise the benefits of the tough decisions that we have made over the past 18 months.
“This progress would not have been possible without the passion and commitment of everyone at the Qantas Group, right across the company, and I thank all our people for their contribution.”
QANTAS International reported an underlying EBIT loss of $91 million in 1H13 – an improvement of $171 million compared with 1H12.
“QANTAS International is well advanced in its turnaround plan,” Mr Joyce said.
“The 65 per cent improvement in QANTAS International’s underlying EBIT is testament to the steps taken to remove cost from the businesses, from closing down loss-making routes to retiring aircraft and consolidating
“But we have also moved to renew QANTAS International: nine Boeing 747s have been upgraded with A380- standard cabins, we have strengthened our alliances with American Airlines and LAN Airlines around the new hubs of
Dallas/Fort Worth and Santiago, and we are introducing new customer services such as chauffeur transport. International customer satisfaction has reached the highest level ever recorded.5
“From March 31, subject to final regulatory approval, our partnership with Emirates will take effect – giving our customers one-stop access to over 65 destinations in Europe, the Middle East and North Africa, via a superb hub in Dubai.
“At the same time, we will strengthen our network in Asia. Earlier this month we announced a new schedule for QANTAS services to the region, increasing dedicated capacity.
“Taken together, these measures provide a platform to return Qantas International to profit and, over the long term, target growth opportunities.”
QANTAS Domestic reported underlying EBIT of $218 million in 1H13, down from $328 million in 1H12.
“Clearly the Australian domestic market is highly competitive,” Mr Joyce said. “We have seen elevated levels of capacity growth from competitors attempting to claim market share from QANTAS Domestic.
“This has put pressure on yield for all airlines – but QANTAS Domestic has remained the airline of choice for business travellers, maintaining its 84 per cent share of the corporate market. During the first half we renewed 40 accounts and won 39 new accounts, including four won back from the competition.6
“We have continued to invest in the domestic business, with new and upgraded aircraft and a big focus on improving customer service through training and technology. Qantas Domestic consistently outperformed its main competitor for on-time performance during 2012 and achieved record customer satisfaction.7
“We also continue to grow in regional Australia, both through QantasLink and through our expanding charter business in mining regions. We are confident that with our balanced portfolio of domestic airlines we will
remain the leader in every segment of the market.”
Jetstar Airways reported underlying EBIT of $128 million in 1H13, down from $147 million in 1H12, reflecting domestic market conditions and start-up investments in Jetstar Japan and Jetstar Hong Kong.
“Jetstar’s revenues increased by 12 per cent as it positioned itself for a new phase of growth,” Mr Joyce said.
“Jetstar Japan commenced domestic operations in July and has made a strong start – with over 600,000 passengers carried in its first six months.
“Singapore-based Jetstar Asia continued to grow, with an improvement in profitability, while the performance of Vietnam-based Jetstar Pacific is also improving after an ownership restructure and fleet renewal program.
“Jetstar Hong Kong’s application for regulatory approval is well underway, and though we do not take the outcome for granted, we believe there is a compelling case for a new low cost airline in this market.
“Already the largest low cost carrier in the Asia Pacific by revenue, we are now building up Jetstar’s scale across the region to support forecast passenger demand – using a capital-light model that draws on close
partnerships with local market leaders.”
Group financial position
The Group’s liquidity position is strong at $3.5 billion and disciplined financial management remains a core priority.
“In August 2012 we said that we would focus on debt reduction after a period of relatively high capital expenditure, and that’s what we have done,” Mr Joyce said.
“During the first half we announced the early repayment of over $650 million of debt. At the same time, we launched a share buy-back, reflecting the Board’s confidence in the Group’s underlying financial strength and long term strategy.
“These steps were enabled by $750 million in cash generated by the sale of our stake in StarTrack to Australia Post and the restructure of our Boeing 787 delivery schedule – prudent transactions in keeping with our commitment to disciplined financial management.”
Planned capital expenditure has been reduced by $600 million, with a forecast of $1.6 billion in 2012/13 and $1.5 billion in 2013/14.
Net free cash flow in 1H13 was $205 million and the Group continues to target positive net free cash flow9 on a full-year basis.
The operating environment for the QANTAS Group in 2H13 remains challenging and volatile.
Group capacity is expected to increase by 0.5-1.5 per cent in 2H13 compared with 2H12. Group domestic capacity is expected to increase by 5-7 per cent in 2H13 compared with 2H12, while maintaining flexibility.
Underlying fuel costs for the Group are expected to be approximately $2.25 billion10 in 2H13.
No Group profit guidance is provided at this time due to the high degree of volatility and uncertainty in the competitive environment, global economic conditions, fuel prices and foreign exchange rates.
Copyright Photo: John Adlard. The last Boeing 767-300 will be retired by mid 2015. Boeing 767-336 ER VH-ZXB (msn 24338) in the special QANTAS Socceroos livery is pictured at the Sydney hom and base.