Copa Reports 81.6 Percent Increase in Quarterly Income

Copa Holdings, S.A., parent company of Copa Airlines and Aero Republica, reported net income of $55.2 million for the second quarter, or diluted earnings per share (EPS) of $1.26, an increase of 81.6 percent as compared to net income of $30.4 million or diluted EPS of $0.70 in the second quarter of 2009.

Excluding special items, which for second quarter included a $27.1 million non-cash gain associated with the mark-to-market of fuel hedge contracts, Copa Holdings would have reported an adjusted net income of $28.1 million, or diluted EPS of $0.64, compared to an adjusted net income of $24.8 million or EPS of $0.57 for the second quarter of 2008.

Copa said passenger traffic for the months of May and June were negatively affected as a result of the H1N1 flu crisis, which resulted in lower overall demand for intra-Latin America travel, especially to and from Mexico. The company estimates that the H1N1 flu crisis reduced consolidated passenger revenue by approximately $12 million.

Operating income for the second quarter came in at $36.8 million, despite a $12.8 million realized fuel hedge loss, representing an increase of 17.8 percent as compared to operating income of $31.2 million for second quarter, which included a $7.5 million fuel hedge gain. Operating margin increased from 10.5 percent to 13.2 percent.

For the second quarter, total revenues reached $277.6 million, representing a 6.8 percent decline, on a 16.5 percent capacity expansion. Yield per passenger mile decreased 13.3 percent to 15.6 cents and operating revenue per available seat mile (RASM) decreased 20.0 percent to 11.4 cents.

Revenue passenger miles (RPMs) increased 7.5 percent from 1.56 billion in the second quarter last year to 1.68 billion in the second quarter of 2009, and available seat miles (ASMs) increased 16.5 percent from 2.09 billion in the second quarter of 2008 to 2.44 billion in the second quarter of 2009, with the Copa Airlines segment increasing 18.1 percent year-over-year and Aero Republica increasing 8.9 percent.

Consolidated load factor decreased 5.7 percentage points to 68.7 percent. Break-even load factor for second quarter 2009 decreased 6.7 percentage points to 59.7 percent from 66.4 percent in the same quarter of 2008. Copa Airlines reported on-time performance of approximately 90 percent and a flight-completion factor of 99.5 percent, maintaining its position among the best in the industry.