Copa Holdings, S.A.

Q2 operating revenue increased 25.7% year over year to $1.1 billion. Operating profit was $91.7 million, with operating margin of 8.7% versus 21.7% in Q2 2025. Net profit totaled $68.2 million, or $1.67 per share, with a net margin of 6.4%. Passenger yields increased 8.7%, RASM rose 7.9% to 11.6 cents, capacity grew 16.5% in ASMs, and load factor was 86.7% versus 87.3% last year. Ex-fuel CASM was flat year over year at 5.7 cents, while fuel CASM increased 26% to 10.6 cents and average all-in jet fuel price rose 85% to $4.28 per gallon from $2.32. Copa ended the quarter with about $1.5 billion in cash, short-term and long-term investments, total debt of about $2.7 billion, average cost of debt of 3.7%, and net debt-to-EBITDA of 0.9x. For 2026, management now expects operating margin of 17% to 19%, capacity growth of 14% to 15%, load factor of about 87%, RASM of 12 cents, ex-fuel CASM of 5.7 cents, and all-in fuel of $3.60 per gallon.

Pedro Heilbron said the quarter showed the resilience of Copa’s model even in a much higher fuel environment, and emphasized profitable growth, disciplined execution, and operational reliability. He pointed to strong bookings, robust demand across the network, and the strategic move from 6 to 8 connecting banks in March 2027 as ways to strengthen the Hub of the Americas, improve connectivity, and boost aircraft utilization. His tone was confident and constructive, with repeated emphasis on flexibility in the fleet plan and confidence in growth plans.

Peter Donkersloot Ponce said Q2 profitability was hurt by higher fuel, but cost discipline remained intact: ex-fuel CASM stayed flat at 5.7 cents while fuel CASM rose 26% to 10.6 cents. He noted about $1.5 billion in cash and investments, $2.7 billion in debt tied to aircraft financing, 3.7% average cost of debt, and 0.9x net debt-to-EBITDA, underscoring a strong balance sheet. He also said the board approved a quarterly dividend of $1.71 per share, and that full-year CapEx is now expected at $700 million to $750 million, about $50 million below the initial guide.

Analysts focused on booking pace, capacity growth, delivery timing, buybacks, CapEx, Starlink costs, and how pricing would hold as fuel comes down. Management said Q3 was about 75% booked and Q4 about 25% sold, while noting Q3 was around 20% booked before fare increases and Q4 had almost nothing on the books at that point. On deliveries, management said timing shifts were mostly small and not material to ASM counts, with 12 aircraft expected in 2027 and roughly 12 evenly spaced across the year. On pricing, they said demand is strong across the network, competition remains disciplined, and they believe fares can remain supportive even if fuel declines; on Starlink, they said CapEx is already prepaid and in the books, with free access for business class and elite members while other passengers pay.