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April 15, 2024
A look at Copa Holdings 2Q results

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Copa Holdings, the company owner of Copa Airlines and Wingo, reported a US$143.8 million net profit in the first half of 2022 (US$124.1 million for the second quarter), fueled by higher yields, a strong demand environment in the region, and healthy booking trends. 

Nice results for Copa Holdings 2Q results 

Copa Holdings’ second quarter results reflect the impact of the significant increase in jet fuel prices on the company’s operating costs. Nonetheless, the airline partially offset this heavy increase in fuel prices with higher passenger yields and lower unit costs, excluding fuel. 

During the quarter, Copa Holdings reported an operating profit of US$42.3 million and an operating margin of 6.1% for the quarter, compared to an operating profit of US$82.6 million and an operating margin of 12.8% in 2019’s second quarter. 

Pedro Heilbron said, 

“Ex-fuel CASM decreased from $0.062 in Q2 2019 to $0.06, representing an almost 5% decrease, on 3% less capacity. And on the operational front, Copa Airlines delivered an on-time performance of 85.9% and a completion factor of 99.8%. In terms of fleet during the quarter, we took delivery of one 737 MAX 9 to end the quarter with a total of 94 aircraft, reaching 92% of our year-end 2019 fleet size. With the addition of this aircraft and the expected remaining deliveries for the year, more than 20% of the fleet will be composed of MAX aircraft, resulting in valuable fuel efficiencies.

The company ended the quarter with a net profit of US$124.1 million and approximately US$1.1 billion in cash, short-term, and long-term investments. Copa Holdings’ total debt was US$1.6 billion. 

Passengers and fleet

During the first half of the year, Copa Holdings carried 7.72 million passengers, still 4.8% below pre-pandemic traffic levels. The load factor of its flights was 83.2%, one percentage point below 2019 levels. 

Consolidated revenue for the quarter totaled US$693.4 million, mainly driven by passenger revenue, which totaled US$656.9 million, a 5.9% increase compared to the same period in 2019, following a 10.1% increase in yields. 

Nonetheless, business travel remains fairly depressed. “Business has improved slightly, but still half of what it was in 2019, but we see an improving trend,” said Pedro Heilbron. 

The company closed the year with a fleet composed of 94 aircraft, 68 Boeing 737-800s, 17 Boeing 737 MAX 9s, and nine Boeing 737-700s. 

Going forward, Copa Holdings expects a recovering demand environment to continue in the region, as well as healthy booking trends. 

Mainly driven by a quarter-over-quarter increase in unit revenues, the Company expects its operating margin to be within a range of approximately 16% to 18% for 3Q22, or 10 to 12 percentage points higher than 2Q22. The company expects capacity in 3Q22 to reach approximately 6.4 billion ASMs, or 100% of 3Q19 ASMs. Factored in this outlook is a load factor of approximately 86%, Unit Revenues (RASM) of approximately 12.7 cents, unit costs excluding fuel (Ex-Fuel CASM) of approximately 6.0 cents, and an all-in fuel price of US$3.80 per gallon. For full-year 2022, the Company expects to operate approximately 98% of 2019 ASMs and deliver a CASM ex-fuel of approximately 5.9 cents.

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Daniel Martínez Garbuno is a Mexican journalist. He has specialized in the air industry working mainly for A21, a Mexican media outlet focused entirely on the aviation world. He has also published on other sites like Simple Flying, Roads & Kingdoms, Proceso, El Economista, Buzos de la Noticia, Contenido, and Notimex.

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