ATW Daily News

Copa profit drops 35.6% on fuel hedge charges

Friday November 14, 2008

Copa Holdings, parent of Copa Airlines and AeroRepublica, reported third-quarter net income of $30.3 million, down 35.6% from a $46.8 million profit in the year-ago period, a drop it attributed almost entirely to noncash fuel hedge losses.

Copa took a $15.5 million noncash charge on its hedging contracts owing to the drop in oil prices during the quarter. Absent the charge, its quarterly net profit would have been $45.8 million.

It said it is continuing its growth strategy and is planning to take delivery of two E-190s in the current quarter to bring its fleet to 42 aircraft (15 190s and 27 737NGs). A 737NG slated to be delivered in the current quarter has been pushed back to the 2009 first quarter owing to the recently concluded Boeing machinists' strike. AeroRepublica operates an additional nine E-190s as well as four MD-80s.

Third-quarter revenue rose 31.8% year-over-year to $348.9 million and operating income increased 4.3% to $57.1 million. Consolidated traffic heightened 13.7% to 1.78 billion RPMs on a 9.3% lift in capacity to 2.3 billion ASMs, leading to a 3% rise in load factor to 77.3%. Yield grew 16.5% to 18.6 cents as RASM increased 20.6% to 15.2 cents and CASM rose 23.1% to 12.7 cents. CASM excluding fuel lifted 5.1% to 7.3 cents.

by Aaron Karp

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