Copa Holdings Reports Net Income of US$43.1 Million and EPS of US$0.99 for the Third Quarter of 2009

Copa Holdings Reports Net Income of US$43.1 Million and EPS of US$0.99 for the
Third Quarter of 2009
Excluding special items, adjusted net income came in at US$52.6 million or
US$1.20 per share

PANAMA CITY, Nov. 12 /PRNewswire-FirstCall/ -- Copa Holdings, S.A.
(NYSE: CPA), parent company of Copa Airlines and Aero Republica, today
announced financial results for the third quarter of 2009 (3Q09). The terms
"Copa Holdings" or "the Company" refer to the consolidated entity, whose
operating subsidiaries are Copa Airlines and Aero Republica. The following
financial and operating information, unless otherwise indicated, is presented
in accordance with U.S. GAAP. Unless otherwise stated, all comparisons with
prior periods refer to the third quarter of 2008 (3Q08).
OPERATING AND FINANCIAL HIGHLIGHTS
-- Copa Holdings reported net income of US$43.1 million for 3Q09, or
diluted earnings per share (EPS) of US$0.99, an increase of 86.8% as compared
to net income of US$23.0 million or diluted EPS of US$0.53 in 3Q08.
-- Third quarter 2009 results include a special charge of US$14.6 million
related to the accrual of costs associated with the retirement of four MD-80
aircraft as a result of Aero Republica's transition to an all Embraer-190
fleet and a US$5.1 million non-cash gain associated with the mark-to-market of
fuel hedge contracts. Excluding the impact of these special items, the company
would have reported net income of US$52.6 million and diluted EPS of US$1.20,
an increase of 14.3% over 3Q08 adjusted net income. See the accompanying
reconciliation of non-GAAP financial information to GAAP financial information
included in the financial tables section of this earnings release.
-- Operating income for 3Q09 came in at US$45.9 million, representing an
operating margin of 14.2%, as compared to operating income for 3Q08 of US$57.1
million. Excluding special fleet charges of US$14.6 million, operating income
would have been US$60.5 million, which would have represented an operating
margin of 18.7% for the quarter, up from 16.4% in 3Q08.
-- In 3Q09, total revenues reached US$323.7 million, representing a 7.2%
decline, on a 10.7% capacity expansion. Yield per passenger mile decreased
14.2% to 15.9 cents and operating revenue per available seat mile (RASM)
decreased 16.2% to 12.7 cents.
-- Revenue passenger miles (RPMs) increased 8.5% from 1.78 billion in 3Q08
to 1.93 billion in 3Q09, and available seat miles (ASMs) increased 10.7% from
2.30 billion in 3Q08 to 2.55 billion in 3Q09, with the Copa Airlines segment
increasing 11.6% and Aero Republica increasing 6.0%. Consolidated load factor
decreased 1.5 percentage points to 75.8%. Underlying Break-even load factor
for 3Q09 decreased 4.8 percentage points to 59.7% from 64.5% in 3Q08.
-- Operating cost per available seat mile (CASM), decreased 14.0% from
12.7 cents in 3Q08 to 10.9 cents in 3Q09. Excluding special charges, CASM
would have decreased 18.5% from 12.7 cents in 3Q08 to 10.3 cents in 3Q09.
CASM, excluding fuel costs and special charges, would have decreased 1.4% from
7.3 cents in 3Q08 to 7.2 cents in 3Q09.
-- Cash, short term and long term investments ended the quarter at
US$376.3 million, representing 30% of the last twelve months' revenues.
During the quarter the Company made pre-delivery payments for future aircraft
deliveries in the amount of $43.6 million.
-- Copa Holdings ended the quarter with a consolidated fleet of 55
aircraft. Copa Airlines' fleet consisted of 43 aircraft, including 28 Boeing
737 Next Generation and 15 Embraer-190's. Aero Republica's fleet consisted of
12 aircraft, including 11 Embraer-190's and one MD-80.
-- For 3Q09, Copa Airlines reported on-time performance of approximately
87.1% and a flight-completion factor of 99.2%, maintaining its position among
the best in the industry.
RECENT DEVELOPMENTS
-- On October 6, Aero Republica announced daily flights to Quito, Ecuador
from Bogotá, Colombia beginning December 20, 2009. With the addition of this
destination, Aero Republica will now provide service to three international
destinations from seven Colombian cities.
-- On October 12, the Panamanian government authorities presented
Aerotocumen S.A. the order to proceed with the Phase 2 expansion project of
Tocumen International Airport. This project, which represents an investment
of approximately US$70 million and is expected to be completed in early 2011,
involves the expansion from 22 to 34 international gates and will consolidate
Tocumen Airport as the most complete and convenient hub facility for intra-
Latin America travel.

Consolidated Financial &
Operating Highlights 3Q09 3Q08 % Change 2Q09 % Change
RPMs (millions) 1,930 1,779 8.5% 1,676 15.2%
ASMs (mm) 2,545 2,300 10.7% 2,438 4.4%
Load Factor 75.8% 77.3% -1.5 p.p. 68.7% 7.1 p.p.
Yield 15.9 18.6 -14.2% 15.6 2.0%
PRASM (cents) 12.1 14.4 -15.9% 10.7 12.5%
RASM (cents) 12.7 15.2 -16.2% 11.4 11.7%
CASM (cents) 10.9 12.7 -14.0% 9.9 10.5%
Adjusted CASM (cents) (1) 10.3 12.7 -18.5% 9.9 4.7%
CASM Excl. Fuel (cents) 7.7 7.3 6.5% 7.1 9.7%
Adjusted CASM Excl. Fuel
(cents) (1) 7.2 7.3 -1.4% 7.1 1.6%
Breakeven Load Factor (3) 59.7% 64.5% -4.8 p.p. 59.7% 0.0 p.p.
Operating Revenues (US$ mm) 323.7 348.9 -7.2% 277.6 16.6%
EBITDAR (US$ mm) (2) 79.6 57.1 39.5% 91.2 -12.6%
Adjusted EBITDAR (US$ mm)
(2)(3) 89.2 80.0 11.5% 64.1 39.1%
EBITDAR Margin (2) 24.6% 16.4% 8.2 p.p. 32.8% -8.2 p.p.
Adjusted EBITDAR Margin
(2)(3) 27.5% 22.0% 5.6 p.p. 23.1% 4.5 p.p.
Operating Income (US$ mm) 45.9 57.1 -19.6% 36.8 24.9%
Adjusted Operating Income
(US$ mm) (1) 60.5 57.1 6.0% 36.8 64.6%
Operating Margin 14.2% 16.4% -2.2 p.p. 13.2% 0.9 p.p.
Adjusted Operating Margin
(1) 18.7% 16.4% 2.3 p.p. 13.2% 5.5 p.p.
Net Income (US$ mm) 43.1 23.0 87.8% 55.2 -21.8%
Adjusted Net Income (US$ mm)
(3) 52.6 45.8 14.9% 28.1 87.4%
EPS - Basic (US$) 1.00 0.53 87.1% 1.27 -21.8%
Adjusted EPS - Basic (US$)
(3) 1.21 1.06 14.5% 0.65 87.4%
EPS - Diluted (US$) 0.99 0.53 86.8% 1.26 -21.8%
Adjusted EPS - Diluted (US$)
(3) 1.20 1.05 14.3% 0.64 87.3%
Weighted Avg. # of Shares -
Basic (000) 43,344 43,195 0.3% 43,338 0.0%
Weighted Avg. # of Shares -
Diluted (000) 43,710 43,491 0.5% 43,685 0.1%

(1) Adjusted Operating Income, Adjusted Operating Margin and Adjusted CASM
for 3Q09 exclude special charges related to the accrual of costs associated
with the retirement of four MD-80 aircraft as a result of Aero Republica's
transition to an all Embraer-190 fleet.
(2) EBITDAR means earnings before interest, taxes, depreciation,
amortization and rent.
(3) Adjusted EBITDAR, Adjusted EBITDAR Margin, Breakeven Load Factor and
Adjusted Net Income and Adjusted EPS (Basic and Diluted) exclude: a) For
3Q09, exclude special charges related to the accrual of costs associated with
the retirement of four MD-80 aircraft as a result of Aero Republica's
transition to an all Embraer-190 fleet and b) For 3Q09, 3Q08 and 2Q09 exclude
non-cash charges/gains associated with the mark-to-market of fuel hedges.
Note: Attached to this press release is a reconciliation of non-GAAP
financial measures to the comparable U.S. GAAP measures.
Full 3Q09 earnings release available for download at:
http://investor.shareholder.com/copa/results.cfm
3Q09 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: November 13, 2009
Time: 11:00 a.m. EST (11:00 a.m. Panama Time)
Conference Call:
Telephone Number: 888-437-9315 (U.S. Domestic Callers)
719-325-2122 (International Callers)
Webcast Link: http://investor.shareholder.com/copa/events.cfm

About Copa Holdings
Copa Holdings, through its Copa Airlines and Aero Republica operating
subsidiaries, is a leading Latin American provider of passenger and cargo
service. Copa Airlines currently offers approximately 144 daily scheduled
flights to 45 destinations in 24 countries in North, Central and South America
and the Caribbean. In addition, Copa Airlines provides passengers with access
to flights to more than 120 other international destinations through code
share agreements with Continental Airlines and other airlines. Aero Republica,
the second-largest domestic carrier in Colombia, provides service to 12 cities
in Colombia as well as international connectivity with Copa Airlines' Hub of
the Americas through flights from Barranquilla, Bogota, Bucaramanga, Cali,
Cartagena, Medellin and Pereira. Additionally, Aero Republica has direct
flights to Caracas, Venezuela from the cities of Bogota and Cartagena.
CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: (507) 304-2677
e-mail: investorrelations@copaair.com
http://www.copaair.com (IR section)

This release includes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on current plans, estimates and expectations, and are not
guarantees of future performance. They are based on management's expectations
that involve a number of business risks and uncertainties, any of which could
cause actual results to differ materially from those expressed in or implied
by the forward-looking statements. The Company undertakes no obligation to
update or revise any forward-looking statement. The risks and uncertainties
relating to the forward-looking statements in this release are among those
disclosed in Copa Holdings' filed disclosure documents and are, therefore,
subject to change without prior notice.
Copa Holdings, S.A.
NON-GAAP FINANCIAL MEASURE RECONCILIATION
This press release includes the following non GAAP financial measures:
Adjusted CASM, Adjusted CASM Excluding Fuel, Adjusted EBITDAR, Adjusted
Operating Income, Adjusted Net Income and Adjusted EPS. This supplemental
information is presented because we believe it is a useful indicator of our
operating performance and is useful in comparing our performance with other
companies in the airline industry. These measures should not be considered in
isolation, and should be considered together with comparable U.S. GAAP
measures, in particular operating income and net income. The following is a
reconciliation of these non-GAAP financial measures to the comparable U.S.
GAAP measures:

Reconciliation of EBITDAR
Excluding Special Items 3Q09 3Q08 2Q09

Net income as Reported $43,139 $22,974 $55,162

Interest Expense (8,090) (10,385) (8,520)
Capitalized Interest 141 391 233
Interest Income 2,217 2,903 2,211
Income Taxes (3,168) (1,745) (3,115)
EBIT 52,039 31,810 64,353

Depreciation and Amortization 11,926 11,132 11,966
EBITDA 63,965 42,942 76,319

Aircraft Rent 11,911 10,245 11,487
Other Rentals 3,772 3,926 3,345
EBITDAR $79,648 $57,113 $91,150

Special Items (adjustments):
Unrealized (gain) loss on fuel
hedging instruments (1) (5,089) 22,848 (27,069)
Special fleet charges (2) 14,599 - -
Adjusted EBITDAR $89,158 $79,961 $64,081

Reconciliation of Operating Income
Excluding Special Items 3Q09 3Q08 2Q09

Operating Income as Reported $45,900 $57,073 $36,751

Special Items (adjustments):
Special fleet charges (2) 14,599 - -
Adjusted Operating Income $60,499 $57,073 $36,751

Reconciliation of Net Income
Excluding Special Items 3Q09 3Q08 2Q09

Net income as Reported $43,613 $22,974 $55,162

Special Items (adjustments):
Unrealized gain (loss) on fuel
hedging instruments (1) (5,089) 22,848 (27,069)
Special Items, net (2) 10,585 - -
Adjusted Net Income $49,109 $45,822 $28,093

Shares used for Computation (in
thousands)
Basic 43,344 43,195 43,338
Diluted 43,710 43,491 43,685

Adjusted earnings per share
Basic 1.13 1.06 0.65
Diluted 1.12 1.05 0.64

Reconciliation Operating Costs per ASM
Excluding Fuel and Special Items 3Q09 3Q08 2Q09

Operating Costs per ASM as Reported 10.8 12.7 9.9
Aircraft fuel per ASM (3.2) (5.4) (2.8)
Operating Costs per ASM excluding
fuel 7.6 7.3 7.1
Special Items (adjustments):
Special Items per ASM, net (2) (0.4) - -
Operating expenses per ASM excluding
fuel and special items 7.2 7.3 7.1

FOOTNOTES:
1) Includes unrealized (gains)/losses resulting from the mark-to-market
accounting for changes in the fair value of fuel hedging instruments. For
3Q09 and 2Q09 period the Company recorded unrealized fuel hedge gains of
US$5.1 million and 27.1million, respectively. In 3Q08, the Company recorded
an unrealized fuel hedge loss of US$22.8 million.
2) Special fleet charges for the 3Q09 period include a US$14.6 million
special charge related to the accrual of costs associated with the retirement
of four MD-80 aircraft as a result of Aero Republica's transition to an all
Embraer-190 fleet.

CPA-G

SOURCE Copa Holdings S.A.

Investor Relations, +011-507-304-2677, investorrelations@copaair.com