Copa Holdings (NYSE:CPA) reported first-quarter financial results on Thursday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
Copa Holdings reported a record net profit of $212 million for Q1 2026, with earnings per share increasing by 20.5% year over year.
The company achieved an operating margin of 24.6%, with capacity increasing by 14% and passenger traffic by 15%, resulting in a load factor of 87.2%.
Copa Holdings resumed service to multiple Venezuelan cities, expanding its network to 87 destinations and placed a new order for 40 Boeing 737 Max aircraft to support long-term growth.
Despite higher jet fuel prices, the company maintained strong financial performance, supported by cost discipline and a robust demand environment.
For Q2 2026, Copa Holdings expects an operating margin of 8% to 12% with a capacity growth of approximately 16% year over year.
Full Transcript
OPERATOR
Ladies and gentlemen, thank you for standing by. Welcome to Copa Holdings first quarter earnings call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session. At that time. If you have a question, you will have to press star 11 on your telephone. As a reminder, this call is being webcast and recorded on May 14, 2026. Now I will turn the conference over to Daniel Tapia, Director of Investor Relations. Daniel, you may begin.
Daniel Tapia (Director of Investor Relations)
Thank you, Carmen. And welcome everyone to our first quarter earnings call. Joining me today are Mr. Pedro Hedron, executive Chairman and CEO of COPA holdings and Peter Dunkersut, our CFO. First, Pedro will begin by going through our first quarter highlights followed by Peter who will discuss our financial results in more detail. Immediately after, we’ll open the call for questions from analysts. As a reminder, COPA holdings financial reports have been prepared in accordance with International Financial Reporting standards. In today’s call, we will discuss certain non IFRS financial measures. A reconciliation of these measures to comparable IFRS measures can be found in our earnings release which is available on our website. Our discussion today will also contain forward looking statements, not limited to historical facts that reflect the company’s current beliefs, expectations and or intentions regarding future events and results. These forward looking statements involve risks and uncertainties that could cause actual results to differ materially and are based on assumptions subject to change. Many of these are discussed in our annual report filed with the sec. Now I’d like to turn the call over to Our Chairman and CEO, Mr. Pedro Hedron.
Pedro Hedron (Executive Chairman and CEO)
Thank you, Daniel. Good morning and thank you all for joining us for our first quarter earnings call. Before we begin, I would like to recognize our more than 9,000 coworkers. Their commitment and professionalism continue to be key drivers of Copa’s strong operational performance and leadership in our industry, especially in today’s higher and volatile jet fuel price environment. Their consistent focus on execution and cost discipline has allowed us to enter the current fuel environment from a position of strength to them. As always, my sincere appreciation and respect. We delivered another quarter of strong financial and operational results reaffirming the strength and resilience of our business model and our ability to consistently deliver industry leading profitability. Our first quarter results reflect a strong demand environment across the region, continued discipline in cost execution and our relentless focus on delivering operational excellence to our passengers. Now I’ll go over our first quarter highlights. Capacity increased 14% year over year while passenger traffic increased 15% resulting in a 0.8 percentage point increase in load factor to 87.2%. Passenger yield increased 1.6% year over year. RASM came in at 11.8 cents, 2.7% higher compared to Q1.25. Unit costs for QAASM increased 1.6% to 8.9 cents driven by higher fuel prices. QASM excluding fuel declined 1% to 5.8 cents reflecting our continued cost discipline and we delivered an industry leading operating margin of 24.6%, 0.8 percentage points higher than Q1 of last year. On the operational side, we delivered an on time performance for the quarter of 91.6% and a flight completion factor of 99.7%, once again positioning COPA among the very best in the industry. Turning to our network, we have resumed service to Valencia and Barquisimeto and have scheduled the restart of Barcelona in June. Together with our existing service to Maracaibo and Caraca. This returns us to serving 5 cities in Venezuela from our hub of the Americas in Panama. With these additions we will operate to 87 destinations in 32 countries, further strengthening our position as the most complete and convenient connecting hub for travel in the Americas. With regard to our fleet, during the quarter we took delivery of two Boeing 737 Max 8 ending Q1 with 127 aircraft. We have already received two additional Max 8s in the second quarter bringing our fleet total to 121 aircraft. Additionally, in April we announced a new Boeing 737 Max order for 40 firm aircraft and 20 options with delivery scheduled between 2030 and 2034. This new order, which begins as we complete deliveries from our existing order book in 2029, reinforces our long term growth strategy and ensures COPA Hub of the Americas continues to lead well into the next decade. As always, we maintain significant flexibility in our fleet plan thanks to options, flight rights, leased expiration and unencumbered aircraft which provide us the ability to adjust our growth plan if needed. Turning now to the current environment of higher and volatile jet fuel prices, throughout our history we have successfully navigated periods of increased fuel prices and volatility, consistently delivering strong financial results supported by the effectiveness of our business model, low cost and disciplined execution. I feel confident that we will demonstrate this once again. To summarize, we delivered strong industry leading profitability in the quarter. We continue to improve our already competitive cost structure. We keep delivering best in class on time performance and reliability. We continue expanding and strengthening our network, the most complete and convenient hub for intra America travel. The current demand environment remains strong supporting yield increases and our proven business model built on having the best geographic position, structurally low unit cost, a strong balance sheet and liquidity position and a superior passenger friendly product positions us well to navigate the higher jet fuel price environment and again in 2026 deliver strong and industry leading financial results. With that, I’ll turn the call over to Peter who will walk us through the financials in more detail.
Peter Dunkersut (Chief Financial Officer)
Thank you Pedro. Good morning everyone and thank you for joining our call today. I would like to start by reinforcing Pedro’s recognition of our team’s continued dedication to delivering leading results. Their commitment remains essential to our strong operational and financial performance. Let me begin by going over our first quarter highlights. We reported a record net profit of $212 million for $5.16 per share, representing a 20.5 year over year increase in earnings per share. Net margin came in at 20.2%, 0.5 percentage points higher year over year. Operating profit came in at $258 million resulting in an operating margin of 24.6%, 0.8 percentage points higher than the first quarter 2025. Unit costs excluding fuel or exfuel chasm declined 1% to 5.8 cents, reflecting the company’s continued focus on cost discipline. Including Fuel CASM (Cost per Available Seat Mile) increased 1.6% year over year to 8.9 cents, driven by the increase in the average price of jet fuel during the quarter. All in Jet Fuel prices increased 7.5% year over year from $2.54 to $2.73 per gallon, while the average increase for the quarter was moderate. Higher prices in the second half of March had a more pronounced impact on our results, driving an approximately $20 million year over year impact on the first quarter performance. Moving on to our balance sheet and liquidity, we ended the quarter with approximately $1.5 billion in cash, short term and long term investments representing 40% of last 12 month revenues. This number excludes approximately $700 million in pre delivery deposits for new aircraft as well as 45 unencumbered aircraft and 15 unencumbered spare engines worth an estimated additional value of over $1 billion. Total debt including lease liabilities stood at $2.4 billion and we ended the quarter with an adjusted net debt to ebitda ratio of 0.7x. Reflecting our strong financial position, I’d like to highlight that our average cost of debt, comprised solely of aircraft related financing remains highly competitive at 3.6%. Turning now to the return of value to our shareholders, the Board of Directors has ratified the company’s second quarterly dividend for the year of $1.71per share to be paid June 15th to all shareholders of record as of May 29th. Additionally, during the quarter we repurchased $45 million worth of shares representing approximately 1% of the total outstanding shares. Finally, turning to our outlook, we continue to see a robust demand environment across the region and our effective business model combined with continued cost discipline position us to continue sustaining strong financial performance. For the second quarter, we expect to deliver an operating margin in the range of 8% to 12% with a capacity growth in ASMs of approximately 16% year over year. These …
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