Panama City, Panama --- Aug 5, 2020. Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2020 (2Q20). The terms “Copa Holdings" and "the Company" refer to the consolidated entity. The following financial information, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS). See the accompanying reconciliation of non-IFRS financial information to IFRS financial information included in the financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the second quarter of 2019 (2Q19).

Due to air travel restrictions implemented in response to the Covid-19 outbreak, the Company did not provide scheduled commercial service during the second quarter, and only operated a small number of charter and humanitarian flights, representing less than 1% of the Company ́s capacity in 2Q19. Therefore, this earnings release will focus on the financial results and metrics that are relevant in these circumstances and will omit certain financial ratios, unit metrics and operational indicators that are usually provided, since these are either not measurable or applicable on such a limited operational base.


  • ▪  Copa Holdings reported a net loss of US$386.0 million or (US$9.08) per share. Excluding special items, the Company would have reported a net loss of US$114.6 million, or (US$2.70) per share.
  • ▪  Special items for the quarter include a US$186.8 million non-cash impairment charge on the B737-700 fleet as a result of the Company ́s announcement to sell those aircraft, a US$50.0 million loss expected on assets held for sale (Embraer aircraft, spare engines, spare parts and a simulator), a US$22.2 million unrealized loss on the mark-to-market of the convertible notes, and a US$12.3 million reversal for unredeemed tickets revenue provisions recorded in the first quarter, given the uncertainty of future passenger behavior due to the Covid-19 situation.
  • ▪  Copa Holdings reported an operating loss of US$357.9 million. Excluding special items, the Company would have reported an operating loss of US$108.7 million.
  • ▪  Cash burn, defined as the cash disbursements less proceeds excluding extraordinary financing activities, averaged US$77 million per month during the quarter.
  • ▪  In April, the Company raised US$343 million in cash through a senior convertible note offering. Cash, short-term and long-term investments totaled US$1.14 billion at the end of the quarter.
  • ▪  The Company entered into new committed, unsecured credit facilities of an additional US$150 million (currently undrawn) and closed the quarter with US$1.29 billion of available liquidity.
  • ▪  The Company repaid US$95 million in short-term lines of credit, closing the quarter with a total debt of US$1.3 billion.

▪  Copa Holdings ended the quarter with a consolidated fleet of 102 aircraft – 6 Boeing 737MAX9s, 68 Boeing 737-800s, 14 Boeing 737-700s, and 14 Embraer-190s.

Subsequent Events

  • ▪  During the month of July, the Company closed a secured revolving credit facility for an initial aggregate amount of US$105 million. Including this facility, the Company now has US$255 million in unutilized committed credit facilities.
  • ▪  On July 17th, due to the Covid-19 pandemic, the Panamanian government announced the extension of air travel restrictions until August 21st, 2020. The company has now scheduled the restart of its regular commercial flights for September 4th, 2020.
  • ▪  On July 31st, the Company signed a US$79.1 million contract for the sale of its remaining 14 EMB-190s, 6 spare engines and spare parts, and expects to deliver these assets over the next 12 months.


In an effort to slow-down the Covid-19 outbreak in the region, Panama and several countries throughout Latin America extended their restrictions on international travel. As such, the Company was not able not provide regular scheduled commercial service during the quarter, and only operated a small number of charters and humanitarian flights, amounting to less than 1% of its normal operating capacity.

The Covid-19 crisis continues to challenge the aviation industry in an unprecedented way and is forcing most airlines around the world to make significant changes to the way they conduct their businesses. From the outset of the crisis, our management team has taken aggressive action, focusing on reducing fixed costs, further bolstering the Company ́s liquidity position, and adjusting the company ́s size, for what we believe will be a weakened demand environment in the immediate future. To that end, the Company announced its intention to sell its Boeing 737-700 fleet (14 aircraft), and does not expect to operate these aircraft again, which resulted in a US$186.8 million, non-cash and non-recurring impairment charge for the quarter.

During the month of July, the Company signed a contract for the sale of its 14 Embraer-190 aircraft, 6 spare enginesandspareparts. Thedecisiontoexitthisfleetwasmadeandannouncedin2019,andtheseassets were already booked as held for sale. Due to current market conditions, the agreed terms for the sale are lower than originally assumed, which generates a book loss of US$50 million dollars on the transaction.

Even though we face a great deal of uncertainty, we believe we are taking the necessary measures to maintain a position of strength in terms of liquidity, an efficient cost structure and flexible capacity and network plans, in order to keep the competitive advantage that has allowed us to deliver consistently leading results for over 20 years.

The Company has a proven and very strong business model, which is based on operating the best and most convenient network for intra-Latin America travel from its Hub of the Americas® based on Panama’s advantageous geographic position, with the region’s lowest unit costs, best on-time performance, and strongest balance sheet. Going forward, the Company believes that its Hub of the Americas® will be an even more valuable source of strategic advantage, especially if fewer intra Latin America markets are able to sustain direct point to point service. We believe our hub will be the best positioned to serve these markets. The company expects to leverage its strong balance sheet, leading liquidity position and lower cost base to continue strengthening its long-term competitive position and to implement initiatives to further strengthen its network and product in the post Covid-19 world.


As a result of the uncertainty regarding the Covid-19 crisis and the possible impact of further travel restrictions in our region, the Company is not providing financial guidance for 2020.

In terms of capacity and depending on Covid-19 developments, including government restrictions and travel demand, among others, the Company currently expects to restart regular commercial operations no earlier than September 4th, 2020. We estimate our monthly operations will initially represent less than 10% of our 2019 capacity and could gradually ramp up to a range of 30 to 40% by the end of the year.

Assuming a restart of operations on September 4th, and if we execute the capacity plan described above, we expect our monthly cash burn for the remainder of 2020 to be reduced to approximately US$66 million. This cash burn includes our net operational cashflows (including our expectation for the cash reimbursement of passenger tickets), a revised capital expenditures plan and staying current on the payments of financial obligations.