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		Per Share				Total
Price to public		$	20.00			$	315,000,000
Underwriting discounts and commissions		$	1.00			$	15,750,000
Proceeds to selling shareholders		$	19.00			$	299,250,000

Morgan Stanley	Goldman, Sachs & Co.

	JPMorgan

	Merrill Lynch & Co.

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Market Data			ii
Presentation of Financial and Statistical Data			ii
Enforceability of Civil Liabilities			iii
Special Note About Forward-Looking Statements			iii
Summary			1
Risk Factors			13
Use of Proceeds			32
Dividends and Dividend Policy			32
Dilution			32
Capitalization			33
Selected Financial and Operating Data			34
Management’s Discussion and Analysis of Financial Condition and Results of Operations			39
Business			62
Regulation			83
Management			87
Principal and Selling Shareholders			94
Related Party Transactions			95
Description of Capital Stock			99
Income Tax Consequences			108
Underwriting			112
Expenses of The Offering			116
Validity of Securities			116
Experts			116
Where You Can Find More Information			116
Index to Consolidated Financial Statements			F-1

	•	“Aircraft utilization” represents the average number of block hours operated per day per aircraft for the total aircraft fleet.
	•	“Available seat miles” or “ASMs” represents the aircraft seating capacity multiplied by the number of miles the seats are flown.
	•	“Average stage length” represents the average number of miles flown per flight.
	•	“Block hours” refers to the elapsed time between an aircraft leaving an airport gate and arriving at an airport gate.
	•	“Break-even load factor” represents the load factor that would have resulted in total revenues being equal to total expenses.

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	•	“Load factor” represents the percentage of aircraft seating capacity that is actually utilized (calculated by dividing revenue passenger miles by available seat miles).
	•	“Operating expense per available seat mile” represents operating expenses divided by available seat miles.
	•	“Operating revenue per available seat mile” represents operating revenues divided by available seat miles.
	•	“Passenger revenue per available seat mile” represents passenger revenue divided by available seat miles.
	•	“Revenue passenger miles” represents the number of miles flown by revenue passengers.
	•	“Revenue passengers” represents the total number of paying passengers (including all passengers redeeming OnePass frequent flyer miles and other travel awards) flown on all flight segments (with each connecting segment being considered a separate flight segment).
	•	“Yield” represents the average amount one passenger pays to fly one mile.

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	•	general economic, political and business conditions in Panama and Latin America and particularly in the geographic markets we serve;
	•	our management’s expectations and estimates concerning our future financial performance and financing plans and programs;
	•	our level of debt and other fixed obligations;
	•	demand for passenger and cargo air service in the markets in which we operate;
	•	competitive pressures on pricing;
	•	our capital expenditure plans;
	•	changes in the regulatory environment in which we operate;
	•	changes in labor costs, maintenance costs, fuel costs and insurance premiums;
	•	changes in market prices, customer demand and preferences and competitive conditions;
	•	cyclical and seasonal fluctuations in our operating results;
	•	defects or mechanical problems with our aircraft;
	•	our ability to successfully implement our growth strategy;
	•	our ability to obtain financing on commercially reasonable terms; and
	•	the risk factors discussed under “Risk Factors” beginning on page 13.

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	Our failure to successfully implement our growth strategy may adversely affect our results of operations and harm the market value of our Class A shares.

	If we fail to successfully integrate the new Embraer 190 aircraft we have agreed to purchase into our operations, our business could be harmed.

	•	difficulties or delays in obtaining the necessary certifications from the aviation regulatory authorities of the countries to which we fly;
	•	manufacturer’s delays in meeting the agreed upon aircraft delivery schedule;

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	•	difficulties in obtaining financing on acceptable terms to complete our purchase of all of the aircraft we have committed to purchase; and
	•	the inability of the new aircraft and its components to comply with agreed upon specifications and performance standards.

	We are dependent on our alliance with Continental and cannot assure you that it will continue.

	Continental’s economic interest in our continued success can be expected to decline over time.

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	We operate using a hub-and-spoke model and are vulnerable to competitors offering direct flights between destinations we serve.

	The Panamanian Aviation Act and certain of the bilateral agreements under which we operate contain Panamanian ownership requirements that are not clearly defined, and our failure to comply with these requirements could cause us to lose our authority to operate in Panama or to the international destinations we serve.

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	Our business is subject to extensive regulation which may restrict our growth or our operations or increase our costs.

	The growth of our operations to the United States and the benefits of our code-sharing arrangements with Continental are dependent on Panama’s continued favorable safety assessment.

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	We are highly dependent on our hub at Panama City’s Tocumen International Airport.

	We are exposed to increases in landing charges and other airport access fees and cannot be assured access to adequate facilities and landing rights necessary to achieve our expansion plans.

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We and our auditors identified a “material weakness” in our internal controls over financial reporting in connection with the preparation of our financial statements under U.S. GAAP, and if we fail to remediate this material weakness and achieve and maintain an effective system of internal controls, we may not be able to accurately report our financial results on a timely basis. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our Class A shares.

	We have significant fixed financing costs and expect to incur additional fixed costs as we expand our fleet.

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	•	limit our ability in the future to obtain additional financing for working capital or other important needs;
	•	impair our liquidity by diverting substantial cash from our operating needs to service fixed financing obligations; or
	•	limit our ability to plan for or react to changes in our business, in the airline industry or in general economic conditions.

	The cost of refinancing our debt and obtaining additional financing for new aircraft could increase significantly if the Export-Import Bank of the United States does not continue to guarantee our debt.

	Our existing debt financing agreements and our aircraft operating leases contain restrictive covenants that impose significant operating and financial restrictions on us.

	•	create material liens on our assets;
	•	take certain actions that may impair creditors’ rights to our aircraft;
	•	sell assets or engage in certain mergers or consolidations; and
	•	engage in other specified significant transactions.

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	If we were to determine that our aircraft, rotable parts or inventory were impaired, it would have a significant adverse effect on our operating results.

	We rely on information technology systems, and we may become more dependent on such systems in the future.

	Our quarterly results can fluctuate substantially.

	Our reputation and financial results could be harmed in the event of an accident or incident involving our aircraft.

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	Fluctuations in foreign exchange rates could negatively affect our net income.

	Our maintenance costs will increase as Copa Airline’s fleet ages and as we perform maintenance on AeroRepública’s older fleet.

	If we enter into a prolonged dispute with any of our employees, many of whom are represented by unions, or if we are required to increase substantially the salaries or benefits of our employees, it may have an adverse impact on our operations and cash flows.

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	Our investment in AeroRepública may not generate the benefits we sought when we purchased the company.

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	The integration of AeroRepública into our business may require a significant amount of our management’s time and distract our management from our core operations.

	Our revenues depend on our relationship with travel agents and tour operators.

	•	the size of commissions offered by other airlines;
	•	changes in our arrangements with other distributors of airline tickets; and
	•	the introduction and growth of new methods of selling tickets.

	We rely on third parties to provide our customers and us with facilities and services that are integral to our business.

	We depend on a limited number of suppliers for our aircraft and engines.

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	We are dependent on key personnel.

	The airline industry is highly competitive.

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	We may face increasing competition from low-cost carriers offering discounted fares.

	Significant changes or extended periods of high fuel costs or fuel supply disruptions could materially affect our operating results.

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	Because the airline industry is characterized by high fixed costs and relatively elastic revenues, airlines cannot quickly reduce their costs to respond to shortfalls in expected revenue.

	Airline bankruptcies could adversely affect the industry.

	The 2001 terrorist attacks on the United States have adversely affected, and any additional terrorist attacks or hostilities would further adversely affect, the airline industry by decreasing demand and increasing costs.

	The negative impact on the airline industry of the current global state of affairs, including the aftermath of the Iraq war and the threat of another outbreak of a communicable disease, may continue or possibly worsen.

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	Our performance is heavily dependent on economic conditions in the countries in which we do business.

	•	changes in economic or other governmental policies;
	•	changes in regulatory, legal or administrative practices; or
	•	other political or economic developments over which we have no control.

	We are highly dependent on conditions in Panama.

	We have paid relatively low taxes in the past, and any increase in the corporate income taxes we pay in Panama or the other countries where we do business would adversely affect our profitability.

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	The new social security law in Panama will adversely affect our net income.

	Political unrest and instability in Colombia may adversely affect our business and the market price of our Class A shares.

	The value of our Class A shares may be adversely affected by ownership restrictions on our capital stock and the power of our board of directors to take remedial actions to preserve our operating license and international route rights by requiring sales of certain outstanding shares or issuing new stock.

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	Our controlling shareholder has the ability to direct our business and affairs, and its interests could conflict with yours.

	The Class A shares will only be permitted to vote in very limited circumstances and may never have full voting rights.

	Substantial future sales of our Class A shares by Continental or CIASA after this offering could cause the price of the Class A shares to decrease.

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	Holders of our common stock are not entitled to preemptive rights, and as a result you may experience substantial dilution upon future issuances of stock by us.

	You may not be able to sell our Class A shares at the price or at the time you desire because an active or liquid market for the Class A shares may not develop.

	Our board of directors may, in its discretion, amend or repeal the dividend policy it is expected to adopt upon the closing of this offering. You may not receive the level of dividends provided for in the dividend policy or any dividends at all.

	To the extent we pay dividends to our shareholders, we will have less capital available to meet our future liquidity needs.

	Our Articles of Incorporation impose ownership and control restrictions on our company which ensure that Panamanian nationals will continue to control us and that these restrictions operate to prevent any change of control or some transfers of ownership in order to comply with the Aviation Act and other bilateral restrictions.

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	The protections afforded to minority shareholders in Panama are different from and more limited than those in the United States and may be more difficult to enforce.

	Developments in Latin American countries and other emerging market countries may cause the market price of our Class A shares to decrease.

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			At September 30, 2005
			Actual				As Adjusted
			(in thousands)
Cash and cash equivalents			$	129,201			$	129,201
Indebtedness:
Copa
	Secured indebtedness due through 2015			388,354				388,354
	Unsecured indebtedness due through 2006			21,920				21,920
AeroRepública
	Secured indebtedness due through 2012			17,249				17,249
	Unsecured indebtedness due through 2010			2,285				2,285
Shareholders’ equity:
	Old Class A shares (without par value)			14,904				—
	Old Class B shares (without par value)			14,319				—
	New Class A shares (without par value)			—				19,813
	New Class B shares (without par value)			—				9,410
	Retained earnings			200,209				200,209
	Accumulated other comprehensive loss			(209	)			(209	)
Total shareholders’ equity				229,223				229,223
Total capitalization				659,031				659,031

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																								Nine Months Ended
				Year Ended December 31,																				September 30,
				2000				2001				2002				2003				2004				2004				2005(21)
				(in thousands of dollars, except share and per share data and operating data)
INCOME STATEMENT DATA
Operating revenues
	Passenger revenue			$	226,012			$	257,918			$	269,629			$	311,683			$	364,611			$	268,652			$	398,550
	Cargo, mail and other				29,402				32,454				31,008				30,106				35,226				24,514				30,379
		Total operating revenues			255,414				290,372				300,637				341,789				399,837				293,166				428,929
Operating expenses:
	Aircraft fuel				48,126				46,514				40,024				48,512				62,549				43,753				97,733
	Salaries and benefits				30,385				38,709				39,264				45,254				51,701				35,985				48,134
	Passenger servicing				33,128				32,834				33,892				36,879				39,222				29,116				36,172
	Commissions				31,537				31,652				28,720				27,681				29,073				21,458				31,456
	Reservations and sales				15,238				18,629				16,707				18,011				22,118				15,727				21,415
	Maintenance, materials and repairs				26,815				25,369				20,733				20,354				19,742				13,899				21,933
	Depreciation				9,136				13,325				13,377				14,040				19,279				13,368				14,844
	Flight operations				12,453				13,887				14,567				15,976				17,904				13,135				17,904
	Aircraft rentals				20,398				20,106				21,182				16,686				14,445				10,435				19,351
	Landing fees and other rentals				8,571				8,451				8,495				10,551				12,155				8,941				12,282
	Other				18,010				15,892				19,166				25,977				29,306				19,847				25,364
	Fleet impairment charge (1)				—				—				13,669				3,572				—				—				—
		Total operating expenses			253,797				265,368				269,796				283,493				317,494				225,664				346,588
Operating income					1,617				25,004				30,841				58,296				82,343				67,502				82,341

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																								Nine Months Ended
				Year Ended December 31,																				September 30,
				2000				2001				2002				2003				2004				2004				2005(21)
				(in thousands of dollars, except share and per share data and operating data)
Non-operating income (expense):
	Interest expense				(9,751	)			(10,988	)			(7,629	)			(11,613	)			(16,488	)			(12,076	)			(15,755	)
	Interest capitalized				157				1,592				1,114				2,009				963				948				657
	Interest income				225				701				831				887				1,423				878				2,300
	Other, net(2)				(233	)			331				(1,490	)			2,554				6,063				4,104				4,061
		Total non-operating expenses, net			(9,602	)			(8,364	)			(7,174	)			(6,163	)			(8,039	)			(6,146	)			(8,737	)
Income (loss) before income taxes					(7,985	)			16,640				23,667				52,133				74,304				61,356				73,604
Provision for income taxes					(1,530	)			(1,822	)			(2,999	)			(3,644	)			(5,732	)			(4,663	)			(8,258	)
Net income (loss)					(9,515	)			14,818				20,668				48,489				68,572				56,693				65,346
BALANCE SHEET DATA
Total cash, cash equivalents and short-term investments (3)				$	16,893			$	28,385			$	39,088			$	65,962			$	114,891			$	105,531			$	129,201
Accounts receivable, net					36,791				30,205				24,006				31,019				27,706				30,529				54,965
Total current assets					61,682				69,040				73,552				108,053				156,035				151,820				208,428
Purchase deposits for flight equipment					21,035				46,540				55,867				45,869				7,190				24,701				42,189
Total property and equipment					205,071				227,717				345,411				480,488				541,211				521,754				572,868
Total assets					270,506				300,121				421,935				591,915				702,050				678,136				846,126
Long-term debt					142,437				111,125				211,698				311,991				380,827				345,754				369,237
Total shareholders’ equity					19,638				46,426				67,094				115,583				174,155				172,276				229,223
CASH FLOW DATA
Net cash provided by operating activities				$	25,386			$	32,997			$	50,931			$	73,561			$	98,633			$	70,301			$	78,308
Net cash used in investing activities					(111,926	)			(39,473	)			(145,591	)			(151,884	)			(90,268	)			(50,201	)			(69,425	)
Net cash provided by financing activities					93,100				14,466				100,400				105,298				29,755				23,389				(2,105	)
OTHER FINANCIAL DATA
EBITDA(4)					10,520				38,660				42,728				74,890				107,685				84,974				101,246
Aircraft rentals					20,398				20,106				21,182				16,686				14,445				10,435				19,351
Operating margin(5)					0.6	%			8.6	%			10.3	%			17.1	%			20.6	%			23.0	%			19.2	%
Weighted average shares used in computing net income per share(6)					42,812,500				42,812,500				42,812,500				42,812,500				42,812,500				42,812,500				42,812,500
Net income (loss) per share (6)				$	(0.22	)		$	0.35			$	0.48			$	1.13			$	1.60			$	1.32			$	1.53
OPERATING DATA
Revenue passengers carried (7)					1,647				1,794				1,819				2,028				2,333				1,726				3,030	(22)
Revenue passenger miles(8)					1,645				1,870				1,875				2,193				2,548				1,887				2,743	(22)
Available seat miles(9)					2,589				2,920				2,847				3,226				3,639				2,687				3,819
Load factor(10)					63.6	%			64.0	%			65.9	%			68.0	%			70.0	%			70.2	%			71.8	%(22)
Break-even load factor(11)					67.6	%			58.7	%			54.5	%			52.8	%			52.6	%			50.7	%			56.6	% (22)
Total block hours(12)					57,443				59,760				58,112				64,909				70,228				52,161				73,645
Average daily aircraft utilization(13)					8.8				9.1				8.8				9.0				9.3				9.4				9.6

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																							Nine Months Ended
			Year Ended December 31,																				September 30,
			2000				2001				2002				2003				2004				2004				2005(21)
			(in thousands of dollars, except share and per share data and operating data)
Average passenger fare				137.2				143.8				148.2				153.7				156.3				155.6				131.6	(22)
Yield(14)				13.74				13.79				14.38				14.22				14.31				14.24				14.53	(22)
Passenger revenue per ASM (15)				8.73				8.83				9.47				9.66				10.02				10.00				10.44
Operating revenue per ASM (16)				9.86				9.94				10.56				10.60				10.99				10.91				11.23
Operating expenses per ASM (CASM)(17)				9.80				9.09				9.48				8.79				8.72				8.40				9.08
Departures				24,715				23,742				23,361				25,702				27,434				20,469				33,636
Average daily departures				67.5				65.0				64.0				70.4				75.0				74.7				151.8
Average number of aircraft.				17.9				18.0				18.1				19.8				20.6				20.8				31.1
Airports served at period end				29				28				27				28				29				29				35
Employees at period end				2,174				2,281				2,453				2,640				2,754				2,705				4,194
SEGMENT FINANCIAL DATA
Copa:
	Operating revenue		$	255,414			$	290,372			$	300,637			$	341,789			$	399,837			$	293,166			$	367,253
	Operating expenses			253,797				265,368				269,796				283,493				317,494				225,664				290,832
	Depreciation			9,136				13,325				13,377				14,040				19,279				13,368				14,342
	Aircraft rentals			20,398				20,106				21,182				16,686				14,445				10,435				16,391
	Interest expense			9,751				10,988				7,629				11,613				16,488				12,076				14,188
	Interest capitalized			157				1,592				1,114				2,009				963				948				657
	Interest income			225				701				831				887				1,423				878				2,194
	Net income (loss) before tax			(7,985	)			16,640				23,667				52,133				74,304				61,356				70,629
	Total assets			270,506				300,121				421,935				591,915				702,050				678,136				785,383
AeroRepública (since April 22, 2005):
Operating revenue																												61,676
Operating expenses																												55,756
Depreciation																												502
Aircraft rentals																												2,960
Interest expense																												1,567
Interest capitalized																												—
Interest income																												106
Net income (loss) before tax																												2,975
Total assets																												84,103
SEGMENT OPERATING DATA
Copa:
	Available seat miles(9)			2,589				2,920				2,847				3,226				3,639				2,687				3,244
	Load factor(10)			63.6	%			64.0	%			65.9	%			68.0	%			70.0	%			70.2	%			73.1	%
	Break-even load factor			67.6	%			58.7	%			54.5	%			52.8	%			52.6	%			50.7	%			55.1	%
	Yield(14)			13.74				13.79				14.38				14.22				14.31				14.24				14.32
	Operating revenue per ASM (16)			9.86				9.94				10.56				10.60				10.99				10.91				11.32
	CASM(17)			9.80				9.09				9.48				8.79				8.72				8.40				8.97
	Average stage length(19)			915				1,023				1,010				1,028				1,047				1,042				1,121
	On time performance(18)			68.4				87.7				90.5				91.4				91.8				92.9				93.3

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																						Nine Months Ended
		Year Ended December 31,																				September 30,
		2000				2001				2002				2003				2004				2004				2005(21)
		(in thousands of dollars, except share and per share data and operating data)
AeroRepública (since April 22, 2005):
Available seat miles(9)																											575
Load factor(10)																											64.8	%
Break even load factor																											67.8	%
Yield(14)																											15.88	(22)
Operating revenue per ASM(16)																											10.73
CASM(17)																											9.70
Average stage length(19)																											365
On time performance(20)																											70.4	%

	(1)	Represents impairment losses on our Boeing 737-200 aircraft and related assets. See the notes to our consolidated financial statements.
	(2)	Consists primarily of changes in the fair value of fuel derivative contracts, foreign exchange gains/losses and gains on sale of Boeing 737-200 aircraft. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our consolidated financial statements.
	(3)	Includes restricted cash and cash equivalents of $4.6 million as of December 31, 2002, $4.5 million as of December 31, 2003, $3.9 million as of December 31, 2004, $4.4 million as of September 30, 2004 and $4.9 million as of September 30, 2005.
	(4)	EBITDA represents net income (loss) plus the sum of interest expense, income taxes, depreciation and amortization minus the sum of interest capitalized and interest income. EBITDA is presented as supplemental information because we believe it is a useful indicator of our operating performance and is useful in comparing our operating performance with other companies in the airline industry. However, EBITDA should not be considered in isolation, as a substitute for net income prepared in accordance with U.S. GAAP or as a measure of a company’s profitability. In addition, our calculation of EBITDA may not be comparable to other companies’ similarly titled measures. The following table presents a reconciliation of our net income to EBITDA for the specified periods:

																							Nine Months
																							Ended
			Year Ended December 31,																				September 30,
			2000				2001				2002				2003				2004				2004				2005
			(in thousands of dollars)
Net income (loss)			$	(9,515	)		$	14,818			$	20,668			$	48,489			$	68,572			$	56,693			$	65,346
Interest expense				9,751				10,988				7,629				11,613				16,488				12,076				15,755
Income taxes				1,530				1,822				2,999				3,644				5,732				4,663				8,258
Depreciation				9,136				13,325				13,377				14,040				19,279				13,368				14,844
	Subtotal			10,902				40,953				44,673				77,786				110,071				86,800				104,203
Interest capitalized				(157	)			(1,592	)			(1,114	)			(2,009	)			(963	)			(948	)			(657	)
Interest income				(225	)			(701	)			(831	)			(887	)			(1,423	)			(878	)			(2,300	)
	EBITDA			10,520				38,660				42,728				74,890				107,685				84,974				101,246

Aircraft rentals represents a significant operating expense of our business. Because we leased several of our aircraft during the periods presented, we believe that when assessing our EBITDA you should also consider the impact of our aircraft rent expense, which was $20.4 million in 2000, $20.1 million in 2001, $21.2 million in 2002, $16.7 million in 2003, $14.4 million in 2004, $10.4 million during the first nine months of 2004 and $19.3 million during the first nine months of 2005.

(5)	Operating margin represents operating income divided by operating revenues.
(6)	All share and per share amounts have been retroactively restated to reflect the current capital structure described under “Description of Capital Stock” and in the notes to our consolidated financial statements.
(7)	Total number of paying passengers (including all passengers redeeming OnePass frequent flyer miles and other travel awards) flown on all flight segments, expressed in thousands.
(8)	Number of miles flown by scheduled revenue passengers, expressed in millions.
(9)	Aircraft seating capacity multiplied by the number of miles the seats are flown, expressed in millions.

(10)	Percentage of aircraft seating capacity that is actually utilized. Load factors are calculated by dividing revenue passenger miles by available seat miles.
(11)	Load factor that would have resulted in total revenues being equal to total expenses.

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(12)	The number of hours from the time an airplane moves off the departure gate for a revenue flight until it is parked at the gate of the arrival airport.
(13)	Average number of block hours operated per day per aircraft for the total aircraft fleet.
(14)	Average amount (in cents) one passenger pays to fly one mile.
(15)	Passenger revenues (in cents) divided by the number of available seat miles.
(16)	Total operating revenues for passenger aircraft related costs (in cents) divided by the number of available seat miles.
(17)	Total operating expenses for passenger aircraft related costs (in cents) divided by the number of available seat miles.
(18)	Percentage of flights that arrive at the destination gate within fifteen minutes of scheduled arrival.
(19)	The average number of miles flown per flight.
(20)	Percentage of flights that depart within fifteen minutes of the scheduled departure time.
(21)	For AeroRepública operating data, this period covers from April 22, 2005 until September 30, 2005 which corresponds to the period that AeroRepública was consolidated in our financial statements.
(22)	AeroRepública has not historically distinguished between revenue passengers and non-revenue passengers. While we are implementing systems at AeroRepública to record that information, revenue passenger information and other statistics derived from revenue passenger data for the nine months ended September 30, 2005 has been derived from estimates that we believe to be materially accurate. Non-revenue passengers represented approximately 2.3% of AeroRepública’s total passengers for the period from April 22, 2005 to September 30, 2005.

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	Regional Economic Environment

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	Revenues

															Nine Months Ended
			Year Ended December 31,												September 30,
			2002				2003				2004				2004				2005
Copa Segment
	Capacity (in available seat miles, in millions)			2,846.9				3,225.9				3,639.4				2,687.2				3,243.7
	Load factor			65.9	%			68.0	%			70.0	%			70.2	%			73.1	%
	Yield (in cents)			14.38				14.22				14.31				14.24				14.32
AeroRepública Segment (1)
Capacity (in available seat miles, in millions)																				574.8
Load factor																				64.8	%
Yield (in cents)(2)																				15.88

(1)	Since April 22, 2005
(2)	AeroRepública has not historically distinguished between revenue passengers and non-revenue passengers. While we are implementing systems at AeroRepública to record that information, revenue passenger information and other statistics derived from revenue passenger data for the nine months ended September 30, 2005 has been derived from estimates that we believe to be materially accurate. Non-revenue passengers represented approximately 2.3% of AeroRepública’s total passengers for the period from April 22, 2005 to September 30, 2005.

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	Seasonality

	Operating Expenses

			Aircraft Fuel Data
			Year Ended December 31,
																							Nine Months Ended
			2000				2001				2002				2003				2004				September 30, 2005
Copa Segment
	Average price per gallon of jet fuel
into plane (excluding hedge)
(in U.S. dollars)																							$	1.08
	Gallons consumed (in thousands)			43,187				46,669				44,788				48,444				50,833				43,332
	Available seat miles (in millions)			2,589				2,920				2,847				3,226				3,639				3,244
	Gallons per ASM (in hundredths)			1.67				1.60				1.57				1.50				1.40				1.34
AeroRepública Segment (1)
Average price per gallon of jet fuel into plane (excluding hedge) (in U.S. dollars)																							$	1.93
Gallons consumed (in thousands)																								10,985
Available seat miles (in millions)																								575
Gallons per ASM (in hundredths)																								1.91

(1)	Since April 22, 2005

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	Taxes

	Internal Controls

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																Nine Months Ended
				Year Ended December 31,												September 30,
				2002				2003				2004				2004				2005(1)
Operating revenues:
	Passenger revenue				89.7	%			91.2	%			91.2	%			91.6	%			92.9	%
	Cargo, mail and other				10.3	%			8.8	%			8.8	%			8.4	%			7.1	%
		Total			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Operating expenses:
	Aircraft fuel				(13.3	)%			(14.2	)%			(15.6	)%			(14.9	)%			(22.8	)%
	Salaries and benefits				(13.1	)%			(13.2	)%			(12.9	)%			(12.3	)%			(11.2	)%
	Passenger servicing				(11.3	)%			(10.8	)%			(9.8	)%			(9.9	)%			(8.4	)%
	Commissions				(9.6	)%			(8.1	)%			(7.3	)%			(7.3	)%			(7.3	)%
	Reservation and sales				(5.6	)%			(5.3	)%			(5.5	)%			(5.4	)%			(5.0	)%
	Maintenance, materials and repairs				(6.9	)%			(6.0	)%			(4.9	)%			(4.7	)%			(5.1	)%
	Depreciation				(4.4	)%			(4.1	)%			(4.8	)%			(4.6	)%			(3.5	)%
	Flight operations				(4.8	)%			(4.7	)%			(4.5	)%			(4.5	)%			(4.2	)%
	Aircraft rentals				(7.0	)%			(4.9	)%			(3.6	)%			(3.6	)%			(4.5	)%
	Landing fees and other rentals				(2.8	)%			(3.1	)%			(3.0	)%			(3.0	)%			(2.9	)%
	Other				(6.4	)%			(7.6	)%			(7.3	)%			(6.8	)%			(5.9	)%
	Fleet impairment charges				(4.5	)%			(1.0	)%			0.0	%			0.0	%			0.0	%
		Total			(89.7	)%			(82.9	)%			(79.4	)%			(77.0	)%			(80.8	)%
Operating income					10.3	%			17.1	%			20.6	%			23.0	%			19.2	%
Non-operating income (expenses):
	Interest expense				(2.5	)%			(3.4	)%			(4.1	)%			(4.1	)%			(3.7	)%
	Interest capitalized				0.4	%			0.6	%			0.2	%			0.3	%			0.2	%
	Interest income				0.3	%			0.3	%			0.4	%			0.3	%			0.5	%
	Other, net				(0.5	)%			0.7	%			1.5	%			1.4	%			0.9	%
		Total			(2.4	)%			(1.8	)%			(2.0	)%			(2.1	)%			(2.0	)%
Income/(loss) before income taxes					7.9	%			15.3	%			18.6	%			20.9	%			17.2	%
Income taxes					(1.0	)%			(1.1	)%			(1.4	)%			(1.6	)%			(1.9	)%
Net income					6.9	%			14.2	%			17.1	%			19.3	%			15.2	%

(1)	Includes results from our AeroRepública segment for the period from April 22, 2005 to September 30, 2005.

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	Operating revenue

	Copa segment operating revenue

	AeroRepública segment operating revenue

	Operating expenses

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	Copa segment operating expenses

		Nine Months Ended
		September 30,
										Percent
		2004				2005				Change
		(in cents)
Operating Expenses per ASM:
Salaries and benefits			1.34				1.28				(4.4	)%
Passenger servicing			1.08				1.02				(6.2	)%
Commissions			0.80				0.80				0.8	%
Reservation and sales			0.59				0.58				(0.2	)%
Maintenance, materials and repairs			0.52				0.47				(8.4	)%
Depreciation			0.50				0.44				(11.1	)%
Flight operations			0.49				0.49				0.3	%
Aircraft rentals			0.39				0.51				30.1	%
Landing fees and other rentals			0.33				0.32				(2.8	)%
Other			0.74				0.69				(7.1	)%
Total operating expenses per ASM before aircraft fuel			6.77				6.61				(2.4	)%
Aircraft fuel			1.63				2.36				44.9	%
Total operating expenses per ASM			8.40				8.97				6.8	%

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	AeroRepública segment operating expenses

	Non-operating income (expense)

	Copa segment non-operating income (expense)

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	Operating revenue

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	Operating expenses

		Year Ended
		December 31,
										Percent
		2003				2004				Change
		(in cents)
Operating expenses per ASM:
Salaries and benefits			1.40				1.42				1.3	%
Passenger servicing			1.14				1.08				(5.7	)%
Commissions			0.86				0.80				(6.9	)%
Reservation and sales			0.56				0.61				8.8	%
Depreciation			0.44				0.53				21.7	%
Maintenance, materials and repairs			0.63				0.54				(14.0	)%
Flight operations			0.50				0.49				(0.7	)%
Aircraft rentals			0.52				0.40				(23.3	)%
Landing fees and other rentals			0.33				0.33				2.1	%
Other			0.81				0.81				—	%
Total operating expenses per ASM before aircraft fuel and fleet impairment charges			7.17				7.01				(2.3	)%
Aircraft fuel			1.50				1.72				14.3	%
Total operating expenses per ASM before fleet impairment charges			8.68				8.72				0.5	%
Fleet impairment charges			0.11				—				N/A
Total operating expenses per ASM			8.79				8.72				(0.7	)%

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	Non-operating income (expense)

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	Operating revenue

	Operating expenses

		Year Ended
		December 31,
										Percent
		2002				2003				Change
		(in cents)
Operating expenses per ASM:
Salaries and benefits			1.38				1.40				1.7	%
Passenger servicing			1.19				1.14				(4.0	)%
Commissions			1.01				0.86				(14.9	)%
Reservation and sales			0.59				0.56				(4.9	)%
Depreciation			0.47				0.44				(7.4	)%
Maintenance, materials and repairs			0.73				0.63				(13.4	)%
Flight operations			0.51				0.50				(3.2	)%
Aircraft rentals			0.74				0.52				(30.5	)%
Landing fees and other rentals			0.30				0.33				9.6	%
Other			0.67				0.81				19.6	%
Total operating expenses per ASM before aircraft fuel and fleet impairment charges			7.59				7.17				(5.5	)%
Aircraft Fuel			1.41				1.50				7.0	%
Total operating expenses per ASM before fleet impairment charges			9.00				8.68				(3.6	)%
Fleet impairment charges			0.48				0.11				(76.9	)%
Total operating expenses per ASM			9.48				8.79				(7.3	)%

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	Non-operating income (expense)

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		Three Months Ended
		September 30,				December 31,				March 31,				June 30,				September 30,
		2004				2004				2005				2005				2005
		(in thousands of dollars, except share and per share data and operating data)
INCOME STATEMENT DATA
Operating revenue		$	106,060			$	106,671			$	113,608			$	137,374			$	177,947
Operating expenses			80,690				91,830				87,631				117,083				141,874
Depreciation			4,661				5,911				4,739				4,996				5,109
Interest expense			4,204				4,412				4,557				5,152				6,046
Interest capitalized			167				15				143				201				313
Interest income			351				545				687				673				940
Net income before tax			22,967				12,948				24,446				17,986				31,172
Net income			21,137				11,879				22,560				15,111				27,675
OTHER FINANCIAL DATA
EBITDA(1)			31,314				22,711				32,912				27,260				41,074
Aircraft rentals			3,583				4,010				4,678				7,236				7,437
Operating margin			23.9	%			13.9	%			22.9	%			14.8	%			20.3	%
Weighted average shares used in computing net income per share(2)			42,812,500				42,812,500				42,812,500				42,812,500				42,812,500
Net income (loss) per share(2) OPERATING DATA		$	0.49			$	0.28			$	0.53			$	0.35			$	0.65
Revenue passenger miles			681				663				736				875				1,131
Available seat miles			945				952				1,018				1,266				1,535
Load factor			72.0	%			69.7	%			72.3	%			69.1	%			73.7	%
Break-even load factor			51.1	%			57.9	%			52.1	%			58.1	%			58.4	%
Yield			14.35				14.46				14.28				14.49				14.73
Passenger revenue per ASM			10.33				10.08				10.33				10.02				10.86
Operating revenue per ASM			11.22				11.20				11.16				10.85				11.60
Operating expenses per ASM			8.53				9.64				8.61				9.25				9.25
SEGMENT FINANCIAL DATA
Copa:
Operating revenue			106,060				106,671				113,608				115,955				137,690
Operating expenses			80,690				91,830				87,631				96,260				106,941
Depreciation			4,661				5,911				4,739				4,770				4,833
Aircraft rentals			3,583				4,010				4,678				5,831				5,882
Interest expense			4,204				4,412				4,557				4,691				4,940
Interest capitalized			167				15				143				201				313
Interest income			351				545				687				656				851
Net income before tax			22,967				12,948				24,446				18,360				27,823
AeroRepública (since April 22, 2005):
Operating revenue															21,419				40,257
Operating expenses															20,823				34,933
Depreciation															226				276
Aircraft rentals															1,405				1,555
Interest expense															461				1,106
Interest capitalized															—				—
Interest income															17				89
Net income (loss) before tax															(374	)			3,349

(1)	EBITDA represents net income (loss) plus the sum of interest expense, income taxes, depreciation and amortization minus the sum of interest capitalized and interest income. EBITDA is presented as supplemental information because we believe it is a useful

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indicator of our operating performance and is useful in comparing our operating performance with other airlines. However, EBITDA should not be considered in isolation, as a substitute for net income prepared in accordance with U.S. GAAP or as a measure of a company’s profitability. In addition, our calculation of EBITDA may not be comparable to other companies’ similarly titled measures. The following table presents a reconciliation of our net income to EBITDA for the specified periods:

			Three Months Ended
			September 30,				December 31,				March 31,				June 30,				September 30,
			2004				2004				2005				2005				2005
			(in thousands of dollars)
Net income (loss)			$	21,137			$	11,879			$	22,560			$	15,111			$	27,675
Interest expense				4,204				4,412				4,557				5,152				6,046
Income taxes				1,830				1,069				1,886				2,875				3,497
Depreciation				4,661				5,911				4,739				4,996				5,109
	Subtotal			31,832				23,271				33,742				28,134				42,327
Interest capitalized				(167	)			(15	)			(143	)			(201	)			(313	)
Interest income				(351	)			(545	)			(687	)			(673	)			(940	)
	EBITDA			31,314				22,711				32,912				27,260				41,074

(2)	All share and per share amounts have been retroactively restated to reflect the current capital structure described under “Description of Capital Stock” and in the notes to our consolidated financial statements.

	Operating Activities

	Investing Activities

	Financing Activities

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		At September 30, 2005
						Remainder
		Total				of 2005				2006				2007				2008				2009				Thereafter
										(in thousands of dollars)
Aircraft and engine purchase commitments		$	579,406			$	62,004			$	166,091			$	189,549			$	128,742			$	33,020			$	—
Aircraft operating leases			126,051				7,960				28,418				28,203				26,918				21,750				12,802
Other operating leases			24,473				1,615				3,944				3,569				3,474				3,370				8,501
Short-term debt and long-term debt (1)			501,817				15,089				84,706				49,778				48,052				44,454				259,738
Total		$	1,231,747			$	86,668			$	283,159			$	271,099			$	207,186			$	102,594			$	281,041

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		Revenue				Expense
Brazilian Real			4.95%				2.30%
Colombian Peso			10.26%				4.58%
Costa Rican Colon			5.18%				2.07%
Mexican Peso			5.57%				2.51%
U.S. Dollar			51.07%				78.75%
Venezuelan Bolivar			4.56%				2.07%
Other(1)			18.41%				7.71%

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	•	Our “Hub of the Americas” airport is strategically located. We believe that our base of operations at the geographically central location of Tocumen International Airport in Panama City, Panama

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		provides convenient connections to our principal markets in North, Central and South America and the Caribbean, enabling us to consolidate traffic to serve several destinations that do not generate enough demand to justify point-to-point service. Flights from Panama operate with few service disruptions due to weather, contributing to high completion factors and on-time performance. Tocumen International Airport’s sea-level altitude allows our aircraft to operate without performance restrictions that they would be subject to at higher-altitude airports. We believe that the geographic reach provided by our central location allows us to generate revenue across a large and diverse base of destinations. We also believe that our hub in Panama allows us to benefit from Panama City’s status as a center for financial services, shipping and commerce and from Panama’s stable, dollar-based economy, free-trade zone and growing tourism industry.
	•	We focus on keeping our operating costs low. In recent years, our low operating costs and efficiency have contributed significantly to our profitability. Our cost per available seat mile was 8.72 cents in 2004 and 9.08 cents in the first nine months of 2005. The cost per available seat mile of our Copa operating segment when excluding costs for fuel and fleet impairment charges was 7.50 cents in 2001, 7.59 cents in 2002, 7.17 cents in 2003, 7.01 cents in 2004 and 6.61 cents during the nine months ended September 30, 2005. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Results of Operations” for a reconciliation of our cost per available seat mile when excluding costs for fuel and fleet impairment charges to our cost per available seat mile. We believe that our cost per available seat mile reflects our modern fleet, efficient operations and the competitive cost of labor in Panama.
	•	We operate a modern fleet. Copa Airlines recently completed a fleet renovation program through which it replaced all of its older Boeing 737-200s with Boeing 737-Next Generation aircraft equipped with winglets and other modern cost-saving and safety features. We also recently accepted delivery of our first Embraer 190 aircraft. Over the next four years, we intend to further enhance our modern fleet through the addition of at least seven additional Boeing 737-Next Generation aircraft and eleven new Embraer 190s. We expect our Boeing 737-700s and 737-800s and our new Embraer 190s to offer substantial operational cost savings over the replaced aircraft in terms of fuel efficiency and maintenance costs. In addition, Copa Airlines believes that its modern fleet contributes to its excellent on-time performance and high completion factor which contribute to passenger satisfaction.
	•	We believe we have a strong brand and a reputation for quality service. We believe that the Copa brand is associated with value to passengers, providing world-class service and competitive pricing. For the nine months ended September 30, 2005, Copa Airline’s statistic for on-time performance was 93.3%, completion factor was 99.7% and baggage handling was 0.8 mishandled bags per 1000 passengers. Our goal is to apply our expertise in these areas to improve AeroRepública’s service statistics to comparable levels. Our focus on customer service has helped to build passenger loyalty. We believe that our brand has also been enhanced through our relationship with Continental, including our joint marketing of the OnePass loyalty program in Latin America, the similarity of our aircraft livery and aircraft interiors and our participation in Continental’s President’s Club lounge program.
	•	Our management fosters a culture of teamwork and continuous improvement. Our management team has been successful at creating a culture based on teamwork and focused on achieving greater efficiencies through continuous improvement. Each of our employees has individual objectives based on corporate goals that serve as a basis for measuring performance. When corporate operational and financial targets are met, employees are eligible to receive bonuses according to our profit sharing program. See “Business—Employees.” We also recognize outstanding performance of individual employees through company-wide recognition, one-time awards, special events and, in the case of our senior management after this offering, grants of restricted stock and stock options. According to internal surveys, over 90% of our employees report being satisfied with their job. Our goal-oriented culture and incentive programs have contributed to a motivated work force that is focused on satisfying customers, achieving efficiencies and growing profitability.

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	•	Expand our network by increasing frequencies and adding new destinations. We believe that demand for air travel in Latin America is likely to expand in the next decade, and we intend to use our increasing fleet capacity to meet this growing demand. We intend to focus on expanding our operations by increasing flight frequencies on our most profitable routes and initiating service to new destinations. Our Panama City hub allows us to consolidate traffic and provide service to certain underserved markets, particularly in Central America and the Caribbean, and we intend to focus on providing new service to regional destinations that we believe best enhance the overall connectivity and profitability of our network. With the addition of Embraer 190 aircraft and growth in overall capacity, we will have more flexibility in scheduling our flights for our customers’ convenience.
	•	Continue to focus on keeping our costs low. We seek to reduce our cost per available seat mile without sacrificing services valued by our customers as we execute our growth plans. Our goal is to maintain a young fleet of modern aircraft and to make effective use of our resources through efficient aircraft utilization and employee productivity. We intend to reduce our distribution costs by increasing direct sales, including internet and call center sales, as well as improving efficiency through technology and automated processes.
	•	Introduce service with new Embraer 190 aircraft. We believe that the addition of the Embraer 190 aircraft in late 2005 will allow us to provide service to new destinations in underserved markets whose demand would be more efficiently served with the 94-seat Embraer 190 aircraft. In addition, we believe that the Embraer 190s will also enable us to more efficiently match our capacity to demand, allowing us to improve service frequencies to currently served markets and to redeploy the higher capacity Boeing 737-Next Generation aircraft to serve routes with greater demand.
	•	Emphasize superior service and value to our customers. We intend to continue to focus on satisfying our customers and earning their loyalty by providing a combination of superior service and competitive fares. We believe that continuing our operational success in keeping flights on time, reducing mishandled luggage and offering convenient schedules to attractive destinations will be essential to achieving this goal. We intend to continue to incentivize our employees to improve or maintain operating and service metrics relating to our customers’ satisfaction by continuing our profit sharing plan and employee recognition programs and to reward customer loyalty with the popular OnePass frequent flyer program, upgrades and access to President’s Club lounges.
	•	Selectively evaluate future acquisitions. From time to time in the future, we expect to evaluate acquisition opportunities in the Latin American aviation sector as they arise. We intend to evaluate any such opportunities selectively, focusing in particular on the extent to which they might complement our existing operations and provide potential for growth and increased shareholder value.

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		2004 IATA Traffic Results
		Passengers								Passenger
		Carried				Change				Miles				Change				ASMs				Change				Load
		(Thousands)				(%)				(Millions)				(%)				(Million)				(%)				Factor
International Scheduled Service
North America—Central America			12,671				11.10%				17,682				16.10%				25,288				11.30%				69.90%
North America—South America			18,686				17.70%				39,448				20.50%				55,761				17.30%				70.70%
Central America—South America			4,101				15.80%				8,271				19.60%				11,978				15.60%				69.10%
Within Central America			3,711				27.50%				4,256				29.10%				6,581				31.70%				64.70%
Within South America			7,498				12.90%				5,656				7.50%				8,756				4.40%				64.60%
Domestic Scheduled Service
Central America			12,749				1.60%				7,941				2.60%				12,464				0.80%				63.70%
South America			34,251				15.60%				17,584				16.10%				26,423				7.50%				66.50%

		GDP								GDP per Capita
		2004 GDP				2004 Real GDP				2004 GDP per Capita
		(US$bn)				(% Growth)				(US$)
Brazil			599.7				5.2%				3,417.1
Argentina			151.9				9.0%				3,912.1
Chile			93.7				6.0%				5,856.2
Mexico			676.5				4.4%				6,506.3
Colombia			95.2				4.0%				2,099.2
Panama			13.8				6.0%				4,523.8
USA			11,733.5				4.4%				39,934.3

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	Copa

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						Number of Passengers
						Carried in Year Ended
						December 31,
Region		ASMs per Week				2002				2003				2004
North America			21,833,388				247,995				335,294				395,497
Central America			7,889,543				593,258				655,726				741,295
South America			33,274,109				739,067				799,057				884,298
Caribbean			12,367,023				245,788				265,660				290,372

		Year Ended
		December 31,
Region		2002				2003				2004
North America(1)			13.4%				15.5%				17.3%
South America			39.4%				38.6%				38.3%
Central America			16.7%				16.0%				15.2%
Caribbean(2)			14.0%				13.3%				12.9%
Panama			16.6%				16.6%				16.2%

(1)	The United States, Canada and Mexico.
(2)	Cuba, Dominican Republic, Haiti, Jamaica, Puerto Rico

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	AeroRepública

										Number of Passengers
						Departures				Carried During the
		Date Service				Scheduled				Year Ended
Destinations Served		Commenced				per Week(1)				December 31, 2004
Barranquilla			Jun 1995				22				102,012
Bogotá			Jun 1993				211				1,002,500
Bucaramanga			May 1995				21				85,093
Cali			Jun 1993				57				323,311
Cartagena			Jun 1993				32				174,867
Leticia			Nov 1993				5				24,501
Medellín			Oct 1994				53				228,594
Montería			Jul 1994				14				56,221
Pereira			Mar 2003				15				27,169
San Andrés			Jun 1993				41				203,185
Santa Marta			Jun 1993				15				83,677

(1)	As of September 30, 2005.

	Passenger Operations

	Cargo Operations

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	Copa

	AeroRepública

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	Copa

														Average Term
		Number of Aircraft												of Lease
														Remaining				Average Age				Seating
		Total				Owned				Leased				(Years)				(Years)				Capacity
Boeing 737-700			18				12				6				5.4				3.7				124
Boeing 737-800			4				3				1				7.1				1.3				155
Total			22				15				7				5.7				3.3				n/a

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Aircraft Type		2004				2005				2006				2007				2008				2009
737-200			2				—				—				—				—				—
737-700			17				18				20				20				20				20
737-800(1)			3				4				4				6				8				10
Embraer 190			—				2				6				11				15				20
Total Fleet			22				24				30				37				43				50

(1)	We have the option to take delivery of Boeing 737-700s rather than Boeing 737-800s for deliveries scheduled after 2006.

	•	They have simplified maintenance procedures.
	•	They require just one type of standardized training for our crews.
	•	They have one of the lowest operating costs in their class.

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	AeroRepública

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	•	Panama’s consistently temperate climate is ideal for airport operations. For example, Tocumen was closed and unavailable for flight operations for a total of less than two hours in each 2003 and 2004.
	•	Tocumen is the only airport in Central America with two operational runways. Also unlike some other regional airports, we are currently not constrained by a lack of available gates/parking positions at Tocumen, and there is ample room to expand Tocumen.
	•	From Panama’s central location, our 124-seat Boeing 737-700s can efficiently serve long-haul destinations in South American cities such as Santiago, Chile; Buenos Aires, Argentina; and São Paulo, Brazil as well as short-haul destinations in Central and South America.
	•	Travelers can generally make connections easily through Tocumen because of its manageable size and Panama’s policies accommodating in-transit passengers.

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			Aircraft Fuel Data
																							Nine Months Ended
			2000				2001				2002				2003				2004				September 30, 2005
Copa
	Average price per gallon of jet fuel into plane (excluding hedge) (in U.S. dollars)		$	1.08			$	0.95			$	0.86			$	1.01			$	1.32			$	1.75
	Gallons consumed (in thousands)			43,187				46,669				44,788				48,444				50,833				43,332
	Available seat miles (in millions)			2,589				2,920				2,847				3,226				3,639				3,244
	Gallons per ASM (in hundredths)			1.67				1.60				1.57				1.50				1.40				1.34
AeroRepública(1)
Average price per gallon of jet fuel into plane (excluding hedge) (in U.S. dollars)																							$	1.93
Gallons consumed (in thousands)																								10,985
Available seat miles (in millions)																								575
Gallons per ASM (in hundredths)																								1.91

(1)	Since April 22, 2005

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			December 31,
																							September 30,
			2000				2001				2002				2003				2004				2005
Pilots				150				178				192				220				224				238
Flight Attendants				300				334				330				349				372				415
Mechanics				130				154				203				209				189				176
Customer Service Agents, Reservation Agents, Ramp and Other				1,244				1,248				1,299				1,382				1,470				1,590
Management and Clerical				350				367				429				480				499				551
	Total Employees			2,174				2,281				2,453				2,640				2,754				2,970

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	Headquarters

	Other property

	AeroRepública

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	Antitrust regulation, enforcement

	Noise regulations effects

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Name		Position		Age
Pedro Heilbron		Chief Executive Officer			47
Victor Vial		Chief Financial Officer			40
Lawrence Ganse		Senior Vice-President of Operations			62
Jorge Isaac García		Vice-President, Commercial			45
Daniel Gunn		Vice-President of Planning			37
Jaime Aguirre		Vice President of Maintenance			43
Vidalia de Casado		Vice President of Passenger Services			48
Alexander Gianareas		Senior Director of Human Resources			52
Victor Varela		Senior Director of Information Technology			41
Roberto Junguito Pombo		Chief Executive Officer of AeroRepública			35

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Name		Position		Age
Pedro Heilbron		Chief Executive Officer and Director			47
Stanley Motta		Chairman and Director			60
Osvaldo Heilbron		Director			79
Jaime Arias		Director			70
Ricardo Alberto Arias		Director			66
Alberto C. Motta, Jr.		Director			59
Mark Erwin		Director			50
George Mason		Director			59
Roberto Artavia Loria		Director			46
José Castañeda Velez		Director			61

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NYSE Standards		Our Corporate Governance Practice
Director Independence.  Majority of board of directors must be independent. §303A.01		Panamanian corporate governance standards recommend that one in every five directors should be an independent director. The criteria for determining independence under the Panamanian corporate governance standards differs from the NYSE rules. In Panama, a director would be considered independent as long as the director does not directly or indirectly own 5% or more of the issued and outstanding voting shares of the company, is not involved in the daily management of the company and is not a spouse or related to the second degree by blood or marriage to the persons named above.
		Our Articles of Incorporation require us to have three independent directors as defined under the NYSE rules.
Executive Sessions. Non-management directors must meet regularly in executive sessions without management. Independent directors should meet alone in an executive session at least once a year. §303A.03		There are no mandatory requirements under Panamanian law that a company should hold, and we currently do not hold, such executive sessions.
Nominating/corporate governance committee. Nominating/corporate governance committee of independent directors is required. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. §303A.04		Panamanian corporate governance standards recommend that registered companies have a nominating committee composed of three members of the board of directors, at least one of which should be an independent director, plus the chief executive officer and the chief financial officer. In Panama, the majority of public corporations do not have a nominating or corporate governance committee. Our Articles of Incorporation require that we maintain a Nominating and Corporate Governance Committee with at least one independent director until the first shareholders’ meeting to elect directors after such time as the Class A shares are entitled to full voting rights.

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NYSE Standards		Our Corporate Governance Practice
Compensation committee. Compensation committee of independent directors is required, which must approve executive officer compensation. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. §303A.05		Panamanian corporate governance standards recommend that the compensation of executives and directors be overseen by the nominating committee but do not otherwise address the need for a compensation committee. While we maintain a compensation committee that operates under a charter as described by the NYSE governance standards, none of the members of that committee are independent.
Equity compensation plans. Equity compensation plans require shareholder approval, subject to limited exemptions.		Under Panamanian law, shareholder approval is not required for equity compensation plans. Although the equity compensation plan we intend to enter into in connection with this offering will be approved by our current shareholders, we do not intend to require any future equity compensation plans to be subject to shareholder approval.
Code of Ethics. Corporate governance guidelines and a code of business conduct and ethics is required, with disclosure of any waiver for directors or executive officers. §303A.10		Panamanian corporate governance standards do not require the adoption of specific guidelines as contemplated by the NYSE standards, although they do require that companies disclose differences between their practices and a list of specified practices recommended by the CNV. We have not adopted a set of corporate governance guidelines as contemplated by the NYSE, although we will be required to comply with the disclosure requirement of the CNV. Panamanian corporate governance standards recommend that registered companies adopt a code of ethics covering such topics as its ethical and moral principles, how to address conflicts of interest, the appropriate use of resources, obligations to inform of acts of corruption and mechanism to enforce the compliance with established rules of conduct. We have adopted a code of ethics applicable to our senior management, including our chief executive officer, our chief financial officer and our chief accounting officer, as well as to other employees.

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	•	any transactions in excess of $5 million between us and our controlling shareholders,
	•	the designation of certain primary share issuances that will not be included in the calculation of the percentage ownership pertaining to the Class B shares for purposes of determining whether the Class A shares should be converted to voting shares under our Articles of Incorporation, and
	•	the issuance of additional Class B shares or Class C shares to ensure Copa Airline’s compliance with aviation laws and regulations.

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			Class A Shares								Class A Shares
			Beneficially								Beneficially
			Owned Prior to								Owned After
			the Offering								the Offering
			Shares				(%)(1)				Shares				(%)(2)
CIASA(2)				9,056,250				30.2	%			1,181,250				3.8	%
Continental				20,978,125				69.8	%			13,103,125				42.3	%
	Total			30,034,375				100	%			14,284,375				46.1	%

(1)	Based on a total of 30,034,375 Class A shares outstanding immediately prior to the offering and 30,971,875 Class A shares outstanding after the offering which, in the case of shares outstanding after the offering, includes 937,500 Class A shares that were awarded to certain members of our management.
(2)	CIASA owns 100% of the Class B shares of Copa Holdings before and after the offering, representing 29.2% of our total capital stock after the offering.

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	Shareholders’ Agreement

	•	a right of each of CIASA and Continental to designate a certain number of directors to our board of directors for so long as they hold a certain amount of our common stock. Of the 11 members of our board, CIASA initially has the right to designate six directors and Continental initially has the right to designate two directors, with the remaining three directors being “independent” under the rules of the New York Stock Exchange;
	•	certain limitations on transfers of our common stock by CIASA or Continental;
	•	subject to certain exceptions, a right of first offer in favor of CIASA to purchase any shares of our common stock Continental proposes to sell to any third party; and
	•	the ability of Continental to “tag-along” their shares of our common stock to certain sales of common stock by CIASA to non-Panamanians or, in the case of certain sales of Class B stock by CIASA to Panamanians, to receive additional registration rights with respect to the shares they would otherwise have been able to sell.

	Registration Rights Agreement

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	Banco Continental de Panama, S.A.

	ASSA Compañía de Seguros, S.A.

	Petróleos Delta, S.A.

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	Desarollo Inmobiliario del Este, S.A.

	Galindo, Arias & Lopez

	Other Transactions

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	Class A Shares

	•	a transformation of Copa Holdings into another corporate type;
	•	a merger, consolidation or spin-off of Copa Holdings;
	•	a change of corporate purpose;
	•	voluntarily delisting Class A shares from the NYSE;
	•	approving the nomination of Independent Directors nominated by our board of director’s Nominating and Corporate Governance Committee following our next annual general shareholders meeting; and
	•	any amendment to the foregoing special voting provisions adversely affecting the rights and privileges of the Class A shares.

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	Class B Shares

	Class C Shares

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	•	authorize the issuance of additional Class B shares to Panamanians at a price determined by the Independent Directors to reflect the current market value of such shares or
	•	authorize the issuance to Class B shareholders such number of Class C shares as the Independent Directors Committee, or the board of directors if applicable, deems necessary and with such other terms and conditions established by the Independent Directors Committee that do not confer economic rights on the Class C shares.

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	Ordinary Meetings

	Extraordinary Meetings

	Vote required

	Notice and Location

	Quorum

	Proxy Representation

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Panama		Delaware
Directors
Conflict of Interest Transactions. Transactions involving a Panamanian corporation and an interested director or officer are initially subject to the approval of the board of directors. At the next shareholders’ meeting, shareholders will then have the right to disapprove the board of directors’ decision and to decide to take legal actions against the directors or officers who voted in favor of the transaction.		Conflict of Interest Transactions. Transactions involving a Delaware corporation and an interested director of that corporation are generally permitted if: (1) the material facts as to the interested director’s relationship or interest are disclosed and a majority of disinterested directors approve the transaction; (2) the material facts are disclosed as to the interested director’s relationship or interest and the stockholders approve the transaction; or (3) the transaction is fair to the corporation at the time it is authorized by the board of directors, a committee of the board of directors or the stockholders.

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Panama		Delaware
Terms. Panamanian law does not set limits on the length of the terms that a director may serve. Staggered terms are allowed but not required.		Terms. The Delaware General Corporation Law generally provides for a one-year term for directors. However, the directorships may be divided into up to three classes with up to three-year terms, with the years for each class expiring in different years, if permitted by the articles of incorporation, an initial by-law or a by-law adopted by the shareholders.
Number. The board of directors must consist of a minimum of three members, which could be natural persons or legal entities.		Number. The board of directors must consist of a minimum of one member.
Authority to take Actions. In general, a simple majority of the board of directors is necessary and sufficient to take any action on behalf of the board of directors.		Authority to take Actions. The articles of incorporation or by-laws can establish certain actions that require the approval of more than a majority of directors.
Shareholder Meetings and Voting Rights
Quorum. The quorum for shareholder meetings must be set by the articles of incorporation or the by-laws. If the articles of incorporation and the notice for a given meeting so provide, if quorum is not met a new meeting can be immediately called and quorum shall consist of those present at such new meeting.		Quorum. For stock corporations, the articles of incorporation or bylaws may specify the number to constitute a quorum but in no event shall a quorum consist of less than one-third of shares entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote shall constitute a quorum.
Action by Written Consent. Panamanian law does not permit shareholder action without formally calling a meeting.		Action by Written Consent. Unless otherwise provided in the articles of incorporation, any action required or permitted to be taken at any annual meeting or special meeting of stockholders of a corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action to be so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and noted.
Other Shareholder Rights
Shareholder Proposals. Shareholders representing 5% of the issued and outstanding capital of the corporation have the right to require a judge to call a general shareholders’ meeting and to propose the matters for vote.		Shareholder Proposals. Delaware law does not specifically grant shareholders the right to bring business before an annual or special meeting. If a Delaware corporation is subject to the SEC’s proxy rules, a shareholder who owns at least $2,000 in market value, or 1% of the corporation’s securities entitled to vote, may propose a matter for a vote at an annual or special meeting in accordance with those rules.

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Panama		Delaware
Appraisal Rights. Shareholders of Panamanian corporation do not have the right to demand payment in cash of the judicially determined fair value of their shares in connection with a merger or consolidation involving the corporation. Nevertheless, in a merger, the majority of shareholders could approve the total or partial distribution of cash, instead of shares, of the surviving entity.		Appraisal Rights. Delaware law affords shareholders in certain cases the right to demand payment in cash of the judicially-determined fair value of their shares in connection with a merger or consolidation involving their corporation. However, no appraisal rights are available if, among other things and subject to certain exceptions, such shares were listed on a national securities exchange or designated national market system or such shares were held of record by more than 2,000 holders.
Shareholder Derivative Actions. Any shareholder, with the consent of the majority of the shareholders, can sue on behalf of the corporation, the directors of the corporation for a breach of their duties of care and loyalty to the corporation or a violation of the law, the articles of incorporation or the by-laws.		Shareholder Derivative Actions. Subject to certain requirements that a shareholder make prior demand on the board of directors or have an excuse not to make such demand, a shareholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation against officers, directors and third parties. An individual may also commence a class action suit on behalf of himself and other similarly-situated stockholders if the requirements for maintaining a class action under the Delaware General Corporation Law have been met. Subject to equitable principles, a three-year period of limitations generally applies to such shareholder suits against officers and directors.
Inspection of Corporate Records. Shareholders representing at least 5% of the issued and outstanding shares of the corporation have the right to require a judge to appoint an independent auditor to examine the corporate accounting books, the background of the company’s incorporation or its operation.		Inspection of Corporate Records. A shareholder may inspect or obtain copies of a corporation’s shareholder list and its other books and records for any purpose reasonably related to a person’s interest as a shareholder.
Anti-takeover Provisions
Panamanian corporations may include in their articles of incorporation or by-laws classified board and super-majority provisions. Panamanian corporation law’s anti-takeover provisions apply only to companies that are(1) registered with the CNV for a period of six months before the public offering,(2) have over 3,000 shareholders, and(3) have a permanent office in Panama with full time employees and investments in the country for more than US$1,000,000. These provisions are triggered when a buyer makes a public offer to acquire 5% or more of any class of		Delaware corporations may have a classified board, super-majority voting and shareholders’ rights plan. Unless Delaware corporations specifically elect otherwise, Delaware corporations may not enter into a “business combination,” including mergers, sales and leases of assets, issuances of securities and similar transactions, with an “interested stockholder,” or one that beneficially owns 15% or more of a corporation’s voting stock, within three years of such person becoming an interested shareholder unless: (1) the transaction that will cause the person to become an interested shareholder is approved by

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Panama		Delaware
shares with a market value of at least US$5,000,000. In sum, the buyer must deliver to the corporation a complete and accurate statement that includes(1) the name of the company, the number of the shares that the buyer intends to acquire and the purchase price;(2) the identity and background of the person acquiring the shares;(3) the source and amount of the funds or other goods that will be used to pay the purchase price;(4) the plans or project the buyer has once it has acquired the control of the company;(5) the number of shares of the company that the buyer already has or is a beneficiary of and those owned by any of its directors, officers, subsidiaries, or partners or the same, and any transactions made regarding the shares in the last 60 days;(6) contracts, agreements, business relations or negotiations regarding securities issued by the company in which the buyer is a party;(7) contract, agreements, business relations or negotiations between the buyer and any director, officer or beneficiary of the securities; and(8) any other significant information. This declaration will be accompanied by, among other things, a copy of the buyer’s financial statements. If the board of directors believes that the statement does not contain all required information or that the statement is inaccurate, the board of directors must send the statement to the CNV within 45 days from the buyer’s initial delivery of the statement to the CNV. The CNV may then hold a public hearing to determine if the information is accurate and complete and if the buyer has complied with the legal requirements. The CNV may also start an inquiry into the case, having the power to decide whether or not the offer may be made. Regardless of the above, the board of directors has the authority to submit the offer to the consideration of the shareholders. The board should only convene a shareholders’ meeting when it deems the statement delivered by the offeror to be complete and accurate. If convened, the shareholders’ meeting should take place within the next 30 days. At the shareholders’ meeting, two-thirds of the holders of the issued and outstanding shares of each class of shares of the corporation with a right to vote must approve the offer and the offer is to be executed within 60 days from the		the board of directors of the target prior to the transactions; (2) after the completion of the transaction in which the person becomes an interested shareholder, the interested shareholder holds at least 85% of the voting stock of the corporation not including shares owned by persons who are directors and also officers of interested shareholders and shares owned by specified employee benefit plans; or (3) after the person becomes an interested shareholder, the business combination is approved by the board of directors of the corporation and holders of at least 66.67% of the outstanding voting stock, excluding shares held by the interested shareholder.

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Panama		Delaware
shareholders’ approval. If the board decides not to convene the shareholders’ meeting within 15 days following the receipt of a complete and accurate statement from the offeror, shares may then be purchased. In all cases, the purchase of shares can take place only if it is not prohibited by an administrative or judicial order or injunction. The law also establishes some actions or recourses of the sellers against the buyer in cases the offer is made in contravention of the law.
Previously Acquired Rights
In no event can the vote of the majority shareholders deprive the shareholders of a corporation of previously-acquired rights. Panamanian jurisprudence and doctrine has established that the majority shareholders cannot amend the articles of incorporation and deprive minority shareholders of previously-acquired rights nor impose upon them an agreement that is contrary to those articles of incorporation. Once a share is issued, the shareholders become entitled to the rights established in the articles of incorporation and such rights cannot be taken away, diminished nor extinguished without the express consent of the shareholders entitled to such rights. If by amending the articles of incorporation, the rights granted to a class of shareholders is somehow altered or modified to their disadvantage, those shareholders will need to approve the amendment unanimously.		No comparable provisions exist under Delaware law.

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	•	a bank;
	•	a dealer in securities or currencies;
	•	a financial institution;
	•	a regulated investment company;
	•	a real estate investment trust;
	•	an insurance company;
	•	a tax-exempt organization;
	•	a person holding our Class A shares as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle;
	•	a trader in securities that has elected the mark-to-market method of accounting for your securities;
	•	a person liable for alternative minimum tax;
	•	a person who owns 10% or more of our voting stock;
	•	a partnership or other pass-through entity for United States federal income tax purposes; or
	•	a person whose “functional currency” is not the United States dollar.

	•	an individual citizen or resident of the United States;
	•	a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

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	•	an estate the income of which is subject to United States federal income taxation regardless of its source; or
	•	a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

	Taxation of Dividends

	•	have held Class A shares for less than a specified minimum period during which you are not protected from risk of loss, or
	•	are obligated to make payments related to the dividends,

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	Passive Foreign Investment Company

	Taxation of Capital Gains

	Information reporting and backup withholding

	General principles

110

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	Taxation of dividends

	Taxation of capital gains

	Other Panamanian taxes

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			Number of
Underwriters			Class A Shares
Morgan Stanley & Co. Incorporated				5,512,500
Goldman, Sachs & Co.				5,512,500
Citigroup Global Markets Inc.				1,575,000
J.P. Morgan Securities Inc.				1,575,000
Merrill Lynch, Pierce, Fenner & Smith           Incorporated				1,575,000
	Total			15,750,000

Paid by the Selling Shareholders		No Exercise				Full Exercise
Per Class A Share		$	1.00			$	1.00
Total		$	15,750,000			$	18,112,500

	•	offer, sell, contract to sell, grant any option, right or warrant to purchase, or otherwise dispose of, directly or indirectly, any Class A shares or any securities convertible into or exercisable or exchangeable for Class A shares; or
	•	enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Class A shares,

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	•	the sale of Class A shares to the underwriters;
	•	transactions by any person other than Copa Holdings relating to Class A shares or other securities acquired in open market transactions after the completion of the offering of the Class A shares; or
	•	any existing employee benefits plan.

	•	during the last 17 days of the 180 day restricted period Copa Holdings issues an earnings release or material news event relating to Copa Holdings occurs, or
	•	prior to the expiration of the 180 day restricted period, Copa Holdings announces that it will release earnings results during the 16 day period beginning on the last day of the 180 day period,

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	(a) (i) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell the Class A shares other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Class A shares would otherwise constitute a contravention of Section 19 of the Financial Services and Markets Act 2000 (the FSMA) by Copa Holdings;
	(b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the Class A shares in circumstances in which Section 21(1) of the FSMA does not apply to Copa Holdings; and
	(c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Class A shares in, from or otherwise involving the United Kingdom.

	(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;
	(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or
	(c) in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

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							Percentage of
							Net Proceeds of
Expenses			Amount				This Offering (%)
Securities and Exchange Commission registration fee			$	33,592.65				*
NYSE listing fee				77,280				*
National Association of Securities Dealers, Inc. filing fee				36,725				*
Printing and engraving expenses				230,000				*
Legal fees and expenses			$	1,250,000				*
Accountant fees and expenses			$	1,200,000				*
Miscellaneous costs				50,000				*
	Total		$	2,877,597.65				*

*	We will not receive any of the net proceeds of this offering.

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		Pages
Audited Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets as of December 31, 2004 and 2003			F-3
Consolidated Statements of Income for each of the three years in the period ended December 31, 2004			F-4
Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended December 31, 2004			F-5
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2004			F-6
Notes to Consolidated Financial Statements			F-7
Unaudited Consolidated Financial Statements
Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004			F-24
Consolidated Statements of Income for the nine-months ended September 30, 2005 and 2004			F-25
Consolidated Statements of Shareholders Equity for the nine-months ended September 30, 2005			F-26
Consolidated Statements of Cash Flows for the nine-months ended September 30, 2005 and 2004			F-27
Notes to Consolidated Financial Statements			F-28

F-1

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	/s/ Ernst & Young

F-2

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				As of December 31,
				2004				2003
				(in US$ thousands,
				except share and per
				share data)
ASSETS
Current Assets:
	Cash and cash equivalents			$	95,718			$	57,598
	Restricted cash and cash equivalents				3,948				4,530
	Short-term investments				15,225				3,834
		Total cash, cash equivalents and short-term investments			114,891				65,962
	Accounts receivable, net of allowance for doubtful accounts of $2,622 and $3,046 as of December 31, 2004 and 2003, respectively				27,706				31,019
	Expendable parts and supplies, net of allowance for obsolescence of $1,739 and $1,733 as of December 31, 2004 and 2003, respectively				2,333				1,838
	Prepaid expenses				8,403				6,061
	Other current assets				2,702				3,173
		Total Current Assets			156,035				108,053
Property and Equipment:
	Owned property and equipment:
		Flight equipment			593,825				491,276
		Other			27,233				25,777
					621,058				517,053
		Less: Accumulated depreciation			(87,037	)			(82,434	)
					534,021				434,619
	Purchase deposits for flight equipment				7,190				45,869
		Total Property and Equipment			541,211				480,488
Other Assets:
	Net pension asset				1,153				828
	Other assets,				3,651				2,546
		Total Other Assets			4,804				3,374
		Total Assets		$	702,050			$	591,915
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
	Current maturities of long-term debt			$	30,573			$	59,654
	Accounts payable				25,335				25,310
	Accounts payable to related parties				3,733				2,644
	Air traffic liability				53,423				47,223
	Taxes and interest payable				16,269				10,283
	Accrued expenses payable				12,848				7,116
	Other current liabilities				830				4,503
		Total Current Liabilities			143,011				156,733
Non-Current Liabilities:
	Long-term debt				380,827				311,991
	Post employment benefits liability				1,158				1,098
	Other long-term liabilities				1,310				4,402
	Deferred tax liabilities				1,589				2,108
		Total Non-Current Liabilities			384,884				319,599
		Total Liabilities			527,895				476,332
Shareholders’ Equity:
	Common stock—80,000,000 shares authorized
		Class A—29,028,125 shares issued and outstanding			19,813				19,813
		Class B—13,784,375 shares issued and outstanding			9,410				9,410
	Retained earnings				144,932				86,360
		Total Shareholders’ Equity			174,155				115,583
		Total Liabilities and Shareholders’ Equity		$	702,050			$	591,915

F-3

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			Year Ended December 31,
			2004				2003				2002
			(in US$ thousands,
			except per share data)
Operating Revenue:
	Passenger revenue		$	364,611			$	311,683			$	269,629
	Cargo, mail and other			35,226				30,106				31,008
				399,837				341,789				300,637
Operating Expenses:
	Aircraft fuel			62,549				48,512				40,024
	Salaries and benefits			51,701				45,254				39,264
	Passenger servicing			39,222				36,879				33,892
	Commissions			29,073				27,681				28,720
	Reservations and sales			22,118				18,011				16,707
	Maintenance, materials and repairs			19,742				20,354				20,733
	Depreciation			19,279				14,040				13,377
	Flight operations			17,904				15,976				14,567
	Aircraft rentals			14,445				16,686				21,182
	Landing fees and other rentals			12,155				10,551				8,495
	Other			29,306				25,977				19,166
	Fleet impairment charges			—				3,572				13,669
				317,494				283,493				269,796
Operating Income				82,343				58,296				30,841
Non-operating Income (Expense):
	Interest expense			(16,488	)			(11,613	)			(7,629	)
	Interest capitalized			963				2,009				1,114
	Interest income			1,423				887				831
	Other, net			6,063				2,554				(1,490	)
				(8,039	)			(6,163	)			(7,174	)
Income before Income Taxes				74,304				52,133				23,667
	Provision for Income Taxes			5,732				3,644				2,999
Net Income			$	68,572			$	48,489			$	20,668
Earnings per share:
	Basic and diluted		$	1.60			$	1.13			$	0.48
	Shares used for computation			42,812,500				42,812,500				42,812,500

F-4

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			Common Stock (Non-
			Par Value)								Issued Capital
																			Retained
			Class A				Class B				Class A				Class B				Earnings				Total
			(in US$ thousands)
At December 31, 2001				29,028,125				13,784,375			$	19,813			$	9,410			$	17,203			$	46,426
	Net Income			—				—				—				—				20,668				20,668
At December 31, 2002				29,028,125				13,784,375				19,813				9,410				37,871				67,094
	Net Income			—				—				—				—				48,489				48,489
At December 31, 2003				29,028,125				13,784,375				19,813				9,410				86,360				115,583
	Dividends Declared			—				—				—				—				(10,000	)			(10,000	)
	Net Income			—				—				—				—				68,572				68,572
At December 31, 2004				29,028,125				13,784,375			$	19,813			$	9,410			$	144,932			$	174,155

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					Year Ended December 31,
					2004				2003				2002
					(in US$ thousands)
Cash flows from operating activities
	Net income				$	68,572			$	48,489			$	20,668
	Adjustments for:
		Deferred income taxes				(519	)			447				368
		Depreciation				19,279				14,040				13,377
		(Gain)/ loss on sale of property and equipment				(1,125	)			—				500
		Fleet impairment charge				—				3,572				13,669
		Provision for doubtful accounts				1,026				2,154				1,928
		Provision for obsolescence of expendable parts and supplies				6				938				141
		Derivative instruments mark to market				945				(207	)			(3,051	)
	Changes in:
		Restricted cash				582				82				(4,612	)
		Accounts receivable				2,287				(9,167	)			4,271
		Other current assets				(3,317	)			(2,130	)			2,897
		Other assets				(1,430	)			(402	)			392
		Accounts payable				25				295				2,849
		Accounts payable to related parties				1,089				1,063				(3,855	)
		Air traffic liability				6,200				8,809				(4,789	)
		Other liabilities				5,013				5,578				6,178
			Net cash provided by operating activities			98,633				73,561				50,931
Cash flows from investing activities
	Short-term investments					(11,391	)			19				(351	)
	Advance payments on aircraft purchase contracts					(16,314	)			(41,232	)			(72,263	)
	Acquisition of property and equipment					(65,764	)			(112,181	)			(75,957	)
	Disposal of property and equipment, net					3,201				1,510				2,980
			Net cash flows used in investing activities			(90,268	)			(151,884	)			(145,591	)
Cash flows from financing activities
	Proceeds from loans and borrowings					101,198				140,732				112,898
	Payments on loans and borrowings					(32,125	)			(21,969	)			(55,280	)
	Issuance of bonds					6,357				21,736				42,782
	Redemption of bonds					(35,675	)			(35,201	)			—
	Dividends declared and paid					(10,000	)			—				—
			Net cash flows provided by financing activities			29,755				105,298				100,400
	Net increase in cash and cash equivalents					38,120				26,975				5,740
	Cash and cash equivalents at January 1st					57,598				30,623				24,883
Cash and cash equivalents at December 31					$	95,718			$	57,598			$	30,623
Supplemental disclosure of cash flow information
	Interest paid				$	16,021			$	10,449			$	6,839
	Income taxes paid					4,286				2,400				1,310

F-6

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1.	Summary of Significant Accounting Policies

	Basis of Presentation

F-7

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	Principles of Consolidation

	Use of Estimates

	Cash and Cash Equivalents

	Short-Term Investments

	Expendable Parts and Supplies

	Property and Equipment

		Years
Building		40
Jet aircraft.		25 to 30
Jet engines		10 to 30
Ground property and equipment		10
Furniture, fixture, equipment and others		5 to 10
Software rights and licenses		3 to 8
Aircraft rotables		7 to 30
Leasehold improvements		Lesser of remaining lease term or useful life

F-8

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	Measurement of Impairment of Long-Lived Assets

	Revenue Recognition

	Passenger Revenue

	Cargo and Mail Services Revenue

	Other Revenue

	Frequent Flyer Program

	Passenger Traffic Commissions

F-9

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	Maintenance and Repair Costs

	Employee Profit Sharing

	Advertising Costs

	Income Taxes

F-10

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2.	Long-Term Debt

			2004				2003
Long-term fixed rate debt			$	318.7			$	246.9
	(Secured fixed rate indebtedness due through 2015. Effective rates from 3.98% to 6.07% at December 31, 2004)
Long-term variable rate debt				92.7				95.5
	(Secured variable rate indebtedness due through 2015. Effective rates from 2.09% to 6.15% at December 31, 2004)
Private bond issuances				—				29.3
	(Unsecured variable rate indebtedness due in 2004)
	Sub-total			411.4				371.7
Less current maturities				30.6				59.7
Long-term debt less current maturities			$	380.8			$	312.0

Year ending December 31,
	2005		$	30.6
	2006		$	29.1
	2007		$	29.9
	2008		$	29.8
	2009		$	29.8
	Thereafter		$	262.2

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3.	Leases

F-12

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			Operating Leases
			Aircraft				Non-Aircraft
Year ending December 31, 2005			$	13.4			$	1.3
	2006			13.4				1.2
	2007			13.4				1.1
	2008			13.4				1.1
	2009			9.4				1.0
	Later years			4.7				0.3
Total minimum lease payments			$	67.7			$	6.0

4.	Financial Instruments and Risk Management

	Fuel Price Risk Management

	Debt

F-13

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	Other Financial Instruments

5.	Issued Capital and Corporate Reorganization

F-14

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6.	Income Taxes

F-15

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			2004				2003				2002
Panama
	Current		$	0.7				—				—
	Deferred			—				—				—
Foreign
	Current			5.5				3.2				2.6
	Deferred			(0.5	)			0.4				0.4
Total			$	5.7			$	3.6			$	3.0

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		Amount												Percentage
		2004				2003				2002				2004				2003				2002
Provision for income taxes at Panamanian statutory rates		$	22.3			$	15.6			$	7.1				30.0	%			30.0	%			30.0	%
Panamanian gross tax election			(6.9	)			—				—				(9.3	)%			—				—
Impact of excess of Panamanian source expenses over Panamanian source revenues			—				(7.0	)			(5.5	)			—				(13.5	)%			(23.1	)%
Difference in Panamanian statutory rates and non-Panamanian statutory rates			(9.7	)			(5.0	)			1.4				(13.0	)%			(9.5	)%			5.8	%
Provision for income taxes		$	5.7			$	3.6			$	3.0				7.7	%			7.0	%			12.7	%

			2004				2003				2002
Deferred tax liabilities
	Maintenance reserves		$	(1.5	)		$	(2.1	)		$	(1.7	)
	Pension obligation			(0.2	)			(0.1	)			(0.0	)
Total deferred tax liabilities				(1.7	)			(2.2	)			(1.7	)
Deferred tax assets
	Post-employment benefit obligation			0.1				0.1				0.1
Net deferred tax assets (liabilities)			$	(1.6	)		$	(2.1	)		$	(1.6	)

7.	Employee Benefit Plans

	Pension Plan

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		2004				2003
Accumulated benefit obligation		$	2.2			$	1.8
Projected benefit obligation at beginning of year		$	2.1			$	1.8
Service cost			0.3				0.2
Interest cost			0.1				0.1
Actuarial losses			0.2				0.1
Benefits paid			(0.2	)			(0.1	)
Projected benefit obligation at end of year		$	2.5			$	2.1

		2004				2003
Fair value of plan assets at beginning of year		$	2.4			$	2.0
Actual return on plan assets			0.1				0.0
Employer contributions			0.6				0.5
Benefits paid			(0.2	)			(0.1	)
Fair value of plan assets at end of year		$	2.9			$	2.4

		2004				2003
Funded status of the plan—net overfunded		$	0.4			$	0.3
Unrecognized net actuarial loss			0.8				0.5
Net asset recognized		$	1.2			$	0.8

		2004				2003
Weighted average assumed discount rate			5.75%				6.25%
Weighted average rate of compensation increase			3.50%				4.00%

		2004				2003				2002
Service cost		$	0.3			$	0.2			$	0.2
Interest cost			0.1				0.1				0.1
Expected return on plan assets			(0.1	)			(0.1	)			(0.1	)
Net periodic benefit expense		$	0.3			$	0.2			$	0.2

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		2004				2003				2002
Weighted average assumed discount rate			6.25%				6.75%				7.25%
Expected long-term rate of return on plan assets			4.00%				4.00%				4.00%
Weighted average rate of compensation increase			4.00%				4.50%				5.00%

Future contribution payments:
		2005		$	0.5
Future benefit payments:
		2005		$	0.4
		2006			0.4
		2007			0.4
		2008			0.4
		2009			0.4
	Remaining five years			$	1.8

	Post-employment Benefit Plan

8.	Fleet Impairment Charges

F-19

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9.	Related Party Transactions

F-20

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Table of Contents

10.	Commitments and Contingencies

	Aircraft Commitments

F-21

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Table of Contents

	Labor Unions

	Lines of Credit for Working Capital and Letters of Credit

	Termination of General Sales Agent

11.	Subsequent Events

	Purchase of AeroRepública

F-22

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	Dividends

F-23

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					September 30,				December 31,
					2005				2004
					(Unaudited)
					(in US$ thousands, except
					share and per share data)
ASSETS
Current Assets:
	Cash and cash equivalents				$	102,496			$	95,718
	Restricted cash and cash equivalents					4,882				3,948
	Short-term investments					21,823				15,225
			Total cash, cash equivalents and short-term investments			129,201				114,891
	Accounts receivable, net of allowance for doubtful accounts of $6,174 and $2,622 as of September 30, 2005 and December 31, 2004, respectively					54,965				27,706
	Accounts receivable from related parties					298				—
	Expendable parts and supplies, net of allowance for obsolescence of $8 and $1,739 as of September 30, 2005 and December 31, 2004, respectively					3,358				2,333
	Prepaid expenses					14,921				8,403
	Other current assets					5,685				2,702
			Total Current Assets			208,428				156,035
Property and Equipment:
	Owned property and equipment:
		Flight equipment				575,511				593,825
		Other				33,873				27,233
						609,384				621,058
		Less: Accumulated depreciation				(78,705	)			(87,037	)
						530,679				534,021
	Purchase deposits for flight equipment					42,189				7,190
			Total Property and Equipment			572,868				541,211
Other Assets:
	Net pension asset					1,313				1,153
	Goodwill					20,716				—
	Intangible Asset					32,347				—
	Other assets					10,454				3,651
			Total Other Assets			64,830				4,804
			Total Assets		$	846,126			$	702,050
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities:
	Current maturities of long-term debt				$	60,571			$	30,573
	Accounts payable					38,509				25,335
	Accounts payable to related parties					9,683				3,733
	Air traffic liability					78,969				53,423
	Taxes and interest payable					26,974				16,269
	Accrued expenses payable					13,591				12,848
	Other current liabilities					5,547				830
			Total Current Liabilities			233,844				143,011
Non-Current Liabilities:
	Long-term debt					369,237				380,827
	Post employment benefits liability					1,383				1,158
	Other long-term liabilities					7,419				1,310
	Deferred tax liabilities					5,020				1,589
			Total Non-Current Liabilities			383,059				384,884
			Total Liabilities			616,903				527,895
Shareholders’ Equity:
	Common stock—80,000,000 shares authorized
		Class A—29,028,125 shares issued and outstanding				19,813				19,813
		Class B—13,784,375 shares issued and outstanding				9,410				9,410
	Retained earnings					200,209				144,932
	Accumulated other comprehensive loss					(209	)			—
			Total Shareholders’ Equity			229,223				174,155
			Total Liabilities and Shareholders’ Equity		$	846,126			$	702,050

F-24

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			Nine Months Ended
			September 30,
			2005				2004
			(Unaudited)				(Unaudited)
			(in US$ thousands, except
			per share data)
Operating Revenue:
	Passenger revenue		$	398,550			$	268,652
	Cargo, mail and other			30,379				24,514
				428,929				293,166
Operating Expenses:
	Aircraft fuel			97,733				43,753
	Salaries and benefits			48,134				35,985
	Passenger servicing			36,172				29,116
	Commissions			31,456				21,458
	Reservations and sales			21,415				15,727
	Maintenance, materials and repairs			21,933				13,899
	Depreciation			14,844				13,368
	Flight operations			17,904				13,135
	Aircraft rentals			19,351				10,435
	Landing fees and other rentals			12,282				8,941
	Other			25,364				19,847
				346,588				225,664
Operating Income				82,341				67,502
Non-operating Income (Expense):
	Interest expense			(15,755	)			(12,076	)
	Interest capitalized			657				948
	Interest income			2,300				878
	Other, net			4,061				4,104
				(8,737	)			(6,146	)
Income before Income Taxes				73,604				61,356
	Provision for Income Taxes			8,258				4,663
Net Income			$	65,346			$	56,693
Earnings per share:
	Basic and diluted		$	1.53			$	1.32
	Shares used for computation			42,812,500				42,812,500

F-25

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					Common Stock (Non-																				Accumulated
					Par value)								Issued Capital												Other-
																					Retained				Comprehensive
					Class A				Class B				Class A				Class B				Earnings				Loss				Total
					(in US$ thousands)
At December 31, 2004						29,028,125				13,784,375			$	19,813			$	9,410			$	144,932			$	—			$	174,155
	Net Income					—				—				—				—				65,346				—			$	65,346
	Other comprehensive loss:					—				—
		Foreign currency translation				—				—				—				—				—				(209	)			(209	)
			Total comprehensive income			—				—																				65,137
	Dividends					—				—				—				—				(10,069	)			—				(10,069	)
At September 30, 2005						29,028,125				13,784,375			$	19,813			$	9,410			$	200,209			$	(209	)		$	229,223

F-26

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					Nine Months Ended
					September 30,
					2005				2004
					(Unaudited)				(Unaudited)
					(in US$ thousands)
Cash flows from operating activities
	Net income				$	65,346			$	56,693
	Adjustments for:
		Deferred income taxes				(9,431	)			604
		Depreciation				14,844				13,368
		(Gain)/ Loss on sale of property and equipment				(1,075	)			(600	)
		Provision for doubtful accounts				1,737				1,163
		Allowance for obsolescence of expendable parts and supplies				3				—
		Derivative instruments mark to market				(1,891	)			(1,757	)
	Changes in:
		Restricted cash				(934	)			85
		Accounts receivable				(18,123	)			(947	)
		Accounts receivable from related parties				(298	)			(70	)
		Other current assets				(419	)			(2,177	)
		Other assets				4,002				(1,871	)
		Accounts payable				(10,594	)			(1,184	)
		Accounts payable to related parties				5,950				(694	)
		Air traffic liability				21,065				8,890
		Other liabilities				8,126				(1,202	)
			Net cash provided by operating activities			78,308				70,301
Cash flows from investing activities
	Short-term investments					(6,598	)			3,834
	Advance payments on aircraft purchase contracts					(34,999	)			(14,221	)
	Acquisition of property and equipment					(7,114	)			(40,888	)
	Disposal of property and equipment, net					1,571				1,074
	Purchase of AeroRepublica, net of cash acquired					(22,285	)			—
			Net cash flows (used in) investing activities			(69,425	)			(50,201	)
Cash flows from financing activities
	Proceeds from loans and borrowings					20,374				64,645
	Payments on loans and borrowings					(34,329	)			(24,652	)
	Issuance of bonds					21,919				6,357
	Redemption of bonds					—				(22,961	)
	Dividends declared and paid					(10,069	)			—
			Net cash flows (used in) provided by financing activities			(2,105	)			23,389
	Net increase in cash and cash equivalents					6,778				43,489
	Cash and cash equivalents at beginning of period					95,718				57,598
Cash and cash equivalents at end of period					$	102,496			$	101,087

F-27

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1.	Corporate Information

F-28

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2.	Basis of Presentation

3.	Acquisition of AeroRepública

F-29

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Assets:
	Cash and cash equivalents			$	1.1
	Accounts receivable				10.7
	Prepaid expenses				2.6
	Other current assets				4.7
	Property, plant & equipment				4.8
	Goodwill				28.9
	Intangibles				31.7
	Other non-current assets				4.3
		Total assets acquired		$	88.8
Liabilities:
	Accounts payable			$	22.4
	Air traffic liability				4.4
	Accrued liabilities				7.6
	Debt				11.1
	Deferred tax liability				13.4
	Other liabilities				6.5
		Total liabilities assumed		$	65.4
Net assets acquired				$	23.4

F-30

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			Nine Months Ended
			September 30,
Pro Forma			2005				2004
Total Revenue			$	466.6			$	377.9
Operating Income				83.2				76.2
Income before income taxes				73.4				66.5
Net income				65.3				59.5
Net income per share:
	Basic and Diluted		$	1.53			$	1.39

4.	Long-Term Debt

F-31

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F-32

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6.	Fuel Price Risk Management

7.	Disposal of Long-Lived Assets

8.	Commitments and Contingencies

	Aircraft Commitments

	Line of Credit from the International Finance Corporation

F-33

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	Termination of General Sales Agent Contract

9.	Segment Information

F-34

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				Nine Months Ended
				September 30, 2005
Operating revenues:
	Copa segment			$	367.3
	AeroRepública segment				61.7
		Consolidated		$	429.0
Depreciation:
	Copa segment			$	(14.3	)
	AeroRepública segment				(0.5	)
		Consolidated		$	(14.8	)
Aircraft rentals:
	Copa segment			$	(16.4	)
	AeroRepública segment				(3.0	)
		Consolidated		$	(19.4	)
Operating income:
	Copa segment			$	76.4
	AeroRepública segment				5.9
		Consolidated		$	82.3
Interest expense:
	Copa segment			$	(14.2	)
	AeroRepública segment				(1.6	)
		Consolidated		$	(15.8	)
Interest income:
	Copa segment			$	2.2
	AeroRepública segment				0.1
		Consolidated		$	2.3
Income (loss) before income taxes:
	Copa segment			$	70.6
	AeroRepública segment				3.0
		Consolidated		$	73.6
Total Assets at End of Period:
	Copa segment			$	785.4
	AeroRepública segment				84.1
	Eliminations				(23.4	)
		Consolidated		$	846.1

F-35

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