Washington, D.C. 20549






Report of Foreign Issuer


Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934


Report on Form 6-K dated For the month of May, 2016



Copa Holdings, S.A.

(Translation of Registrant's Name Into English)



Boulevard Costa del Este, Avenida Principal y Avenida de la Rotonda

Urbanización Costa del Este

Complejo Business Park, Torre Norte


Panama City, Panama

(Address of principal executive offices)



(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)


Form 20-F x    Form 40-F ¨


(Indicate by check whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)


Yes ¨    No x


(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b);82-             )




Enclosure: 1Q16 Earnings Release







Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


  Copa Holdings, S.A.
 Date: 5/5/2016    
  By:  /s/ José Montero  

Name: José Montero

Title: CFO





Exhibit 99.1 




Copa Holdings Reports Financial Results for the First Quarter of 2016

Excluding special items, adjusted net income came in at US$69.9 million, or EPS of US$1.66 per share


Panama City, Panama --- May 5, 2016. Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2016(1Q16). The terms “Copa Holdings" or "the Company" refer to the consolidated entity. The following financial information, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS). See the accompanying reconciliation of non-IFRS financial information to IFRS financial information included in financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the first quarter of 2015 (1Q15).




§Copa Holdings reported net income of US$115.5 million for 1Q16, or diluted earnings per share (EPS) of US$2.74. Excluding special items, Copa Holdings would have reported an adjusted net income of US$69.9 million, or EPS of US$1.66 per share, a 31.1% decrease over adjusted net income of US$106.1 million and US$2.41 per share for 1Q15.
§Operating income for 1Q16 came in at US$94.1 million, a 26.1% decrease over operating income of US$127.3 million in 1Q15. Operating margin for the period came in at 16.9%, compared to 20.1% in 1Q15, as a result of lower unit revenues partially offset by lower unit costs.
§Total revenues decreased 11.8% to US$557.1 million. Yield per passenger mile decreased 15.4% to 12.5 cents and operating revenue per available seat mile (RASM) decreased 13.9% to 10.0 cents.
§For 1Q16, passenger traffic (RPMs) grew 3.6% on a 2.4% capacity expansion. Consolidated load factor came in at 77.4%, 0.9 percentage points above 1Q15.
§Operating cost per available seat mile (CASM) decreased 10.4%, from 9.3 cents in 1Q15 to 8.3 cents in 1Q16, mainly due to lower jet fuel costs, despite US$29 million in realized fuel hedge losses. CASM, excluding fuel, decreased 2.8% to 6.2 cents mainly due to weaker regional currencies and contract renegotiations with various suppliers.
§Cash, short-term and long-term investments ended 1Q16 at US$723.9 million, representing 33% of the last twelve months’ revenues.
§For 1Q16, Copa Holdings reported consolidated on-time performance of 90.6% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.


Subsequent Events


§On May 2nd, 2016, Copa Holdings filed its 2015 20-F Annual Report.  In its 2015 audited financial statements, the company recognized a $430.2 million U.S. dollar foreign currency translation loss, on its bolivar cash balance, due to the migration to an exchange rate of 198.69 bolivars per U.S. dollar, instead of the previously used rate of 6.3 bolivars per U.S. dollar.
§On June 15th, 2016, Copa Holdings will pay its second quarter dividend of US$0.51 per share, on all outstanding Class A and Class B shares, to stockholders of record as of May 31st, 2016.




Consolidated Financial &
Operating Highlights
1Q16 1Q15 % Change 4Q15 % Change
Revenue Passengers Carried ('000) 2,120 1,965 7.9% 2,055 3.2%
RPMs (mm) 4,307 4,158 3.6% 4,103 5.0%
ASMs (mm) 5,566 5,433 2.4% 5,486 1.5%
Load Factor 77.4% 76.5% 0.9 p.p. 74.8% 2.6 p.p.
Yield 12.5 14.8 -15.4% 12.5 0.0%
PRASM (US$ Cents) 9.7 11.3 -14.5% 9.3 3.5%
RASM (US$ Cents) 10.0 11.6 -13.9% 9.7 3.1%
CASM (US$ Cents) 8.3 9.3 -10.4% 9.0 -7.5%
CASM Excl. Fuel (US$ Cents) 6.2 6.3 -2.8% 6.5 -5.4%
Breakeven Load Factor (1) 65.0% 60.2% 4.8 p.p. 67.1% -2.1 p.p.
Fuel Gallons Consumed (Millions) 71.7 69.6 3.0% 70.5 1.7%
Avg. Price Per Fuel Gallon (US$ Dollars) 1.68 2.31 -27.2% 1.94 -13.5%
Average Length of Haul (Miles) 2,031 2,116 -4.0% 1,997 1.7%
Average Stage Length (Miles) 1,223 1,247 -1.9% 1,222 0.1%
Departures 31,518 30,691 2.7% 31,184 1.1%
Block Hours 97,632 97,820 -0.2% 97,788 -0.2%
Average Aircraft Utilization (Hours) 10.7 11.1 -3.3% 10.7 0.6%
Operating Revenues (US$ mm)          557.1 631.9 -11.8% 532.6 4.6%
Operating Income (US$ mm)            94.1 127.3 -26.1% 39.1 140.8%
Operating Margin 16.9% 20.1% -3.3 p.p. 7.3% 9.6 p.p.
Net Income (US$ mm) 115.5 113.2 2.0% -408.5 n/m
Adjusted Net Income (US$ mm) (1) 69.9 106.1 -34.1% 41.5 68.4%
EPS - Basic and Diluted (US$) 2.74 2.57 6.8% -9.44 n/m
Adjusted EPS - Basic and Diluted (US$) (1) 1.66 2.41 -31.1% 0.96 73.1%
# of Shares - Basic and Diluted ('000) 42,109 44,077 -4.5% 43,286 -2.7%


(1)Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 1Q16, 1Q15, and 4Q15 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges and shares repurchased, and the impact of Venezuelan and Argentinean currency devaluations.

Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.






Copa Holdings first quarter results reflect lower unit revenues driven in large part by the reduction in yields in Brazil, Venezuela and Colombia as well as further demand weakness in other markets, partially offset by lower fuel expense and lower ex-fuel unit costs for the quarter.


Total revenues decreased 11.8% to US$557.1 million during the quarter on capacity growth of 2.4%. Load factor came in at 77.4%, or 0.9 percentage points above 1Q15, while yields decreased 15.4% to 12.5 cents. As a result, passenger revenues per ASM (PRASM) decreased 14.5%, from 11.3 cents in 1Q15 to 9.7 cents in 1Q16.


Consolidated operating expenses for 1Q16 decreased 8.2% to US$463.0 million, while consolidated operating expenses per ASM (CASM) decreased 10.4% to 8.3 cents. Excluding fuel costs, unit costs decreased 2.8% to 6.2 cents, mainly as the Company benefited from weaker currencies and contract renegotiations with various suppliers.


Aircraft fuel expense decreased 25.0% or US$40.2 million compared to 1Q15, mostly as a result of lower fuel prices, partially offset by higher fuel consumption from larger gauge aircraft. The Company’s effective jet fuel price, which includes a realized hedge loss of US$29.0 million in 1Q16 and a loss of US$25.7 million in 1Q15, decreased from an average of US$2.31 in 1Q15 to US$1.68 in 1Q16. 


For 1Q16, the Company had fuel hedges in place representing 35% of its consolidated volume. The Company has already hedged approximately 32% of its projected volume for 2Q16, 32% in 3Q16 and 35% in 4Q16. For 2017, the Company has hedged approximately 6% of its forecasted fuel consumption. The Company has not entered into any new fuel hedge positions since July 2015.


The Company recorded a net non-operating income of US$32.8 million for 1Q16 compared to a net non-operating income of US$0.8 million for 1Q15. For 1Q16, non-operating income (expense) included a fuel hedge mark-to-market gain of US$27.4 million compared to a fuel hedge mark-to-market gain of US$7.1 million for 1Q15, and an US$18.1 non-operating income mostly due to the currency exchange gain on an approved Venezuela repatriation.


Copa Holdings closed the quarter with US$723.9 million in cash, short-term and long-term investments, representing 33% of the last twelve months´ revenues. Of such cash, US$8.9 million is subject to exchange controls in Venezuela and pending repatriation. During the quarter the company received payment for US$18.6 million from the Venezuelan Government, corresponding to March 2013 sales, at an exchange rate of 13.5 bolivars per U.S. dollar.


Total debt at the end of 1Q16 amounted to US$1.25 billion, all of which is related to aircraft and equipment financing.


We believe we have a very solid business model, which is based on operating the largest and most convenient network for intra-Latin America travel from our hub based in Panama’s unbeatable geographic position, with the lowest unit costs of any full service carrier in the Americas, world leading on-time performance, and a strong balance sheet. Going forward, the Company expects to continue to strengthen its long-term competitive position by taking advantage of new growth opportunities and implementing initiatives to further strengthen its network and product.






For 2016, the Company updates its guidance as follows: Consolidated capacity is now expected to grow +/-2%, mainly as a result of capacity reductions in underperforming markets, such as Brazil and Venezuela.


Load factors are still expected to come in at +/-76%. However, unit revenues (RASM) are now expected to come in at +/-9.6 cents, due to a weaker economic outlook for South America. Unit costs excluding fuel, or CASM ex-fuel, are expected to come in lower at +/-6.4 cents due to cost efficiency initiatives.


Factored into the current guidance is an estimated effective price per gallon of jet fuel, including the effect of current hedge contracts and into-plane costs, of US$1.80 per gallon, up from US$1.70 in the previous guidance. As a result, the Company is projecting an operating margin in the range of 9% to 11% for 2016.  


Financial Outlook  

2016 - Full Year


2016 - Full Year




Capacity - ASM Growth +/-2% +/-3% 4.4%
Average Load Factor +/-76% +/-76% 75.2%
RASM (cents) +/-9.6 +/-9.8 10.4
CASM Ex-fuel (cents) +/-6.4 +/-6.5 6.4
Operating Margin 9-11% 11-13% 11.8%




Operating revenue


Copa Holdings’ operating revenue for 1Q16 totaled US$557.1 million, an 11.8% decrease over operating revenue of US$631.9 million in 1Q15. This decrease was primarily due to a 12.4% or US$75.8 million decrease in passenger revenue.


Passenger revenue. For 1Q16 passenger revenue totaled US$537.7, a 12.4% decrease over passenger revenue of US$613.5 million in 1Q15. Passenger yield decreased 15.4% to 12.5, while load factor increased 0.9 percentage points to 77.4%, which resulted in a 14.5% decrease in passenger revenue per ASM (PRASM).


Cargo, mail and other. Cargo, mail and other revenue totaled US$19.4 million in 1Q16, a 5.7% increase over cargo, mail and other of US$18.3 million in 1Q15.


 Operating expenses


For 1Q16, consolidated operating expenses decreased 8.2% to US$463.0 million, representing operating cost per available seat mile (CASM) of 8.3 cents. CASM, excluding fuel costs, decreased 2.8% to 6.2 cents. An overview of the major variances on a consolidated basis follows:




Aircraft fuel. For 1Q16, aircraft fuel totaled US$120.5 million, a US$40.2 million or 25.0% decrease over aircraft fuel of US$160.8 million in 1Q15. This decrease was primarily a result of a 27.2% decrease in the average price per gallon of jet fuel (all-in), which averaged US$1.68 in 1Q16 as compared to US$2.31 in 1Q15, and was partially offset by a 3.0% increase in gallons consumed. The all-in average price per gallon of jet fuel for 1Q16 includes a realized US$29.0 million fuel hedge loss, compared to a US$25.7 million loss in 1Q15. Excluding the effect of realized fuel hedge loss for both periods, fuel prices decreased 34.2%, from US$1.94 per gallon in 1Q15 to US$1.28 in 1Q16.


Salaries and benefits. For 1Q16, salaries and benefits totaled US$73.7 million, a 5.5% decrease over salaries and benefits of US$78.0 million in 1Q15. The main driver was the positive effect of weaker FX rates against the US dollar.


Passenger servicing. For 1Q16, passenger servicing totaled US$60.5 million, an 8.5% decrease over passenger servicing of US$66.1 million in 1Q15. This decrease is mainly driven by contract renegotiations with various suppliers and the positive effect of weaker currency rates against the US Dollar.  


Commissions. For 1Q16, commissions totaled US$21.0 million, a 19.3% decrease over commissions of US$26.0 million in 1Q15. This decrease was primarily a result of a lower revenue base.


Reservations and sales. Reservations and sales totaled US$26.0 million, a 21.1% increase over reservation and sales of US$21.5 million in 1Q15. This increase was primarily a result of an increase in passengers carried, and higher GDS rates.  


Maintenance, material and repairs. For 1Q16, maintenance, material and repairs totaled US$29.4 million, a 14.4% increase over maintenance, material and repairs of US$25.7 million in 1Q15. This increase was mainly due to higher provisions for future lease returns.


Depreciation. Depreciation totaled US$34.4 million in 1Q16, a 9.3% increase over depreciation of US$31.5 million in 1Q15. This increase was primarily driven by 6 additional aircraft deliveries from 2015, the depreciation of maintenance events, and other projects.


Flight operations, aircraft rentals, landing fees and other rentals. Combined, flight operations, aircraft rentals, landing fees and other rentals decreased 1.7% from US$77.4 million in 1Q15 to US$76.0 million in 1Q16, primarily as a result of efficiencies in crew-related expenses. 


Other. Other expenses totaled US$21.4 million, an increase of US$3.8 million from 1Q15. This was primarily a result of non-cash costs related to the ramp-up of ConnectMiles.


Non-operating income (expense)


Consolidated non-operating income (expense) totaled a net non-operating income of US$32.8 million in 1Q16, compared to a net non-operating income of US$0.8 million in 1Q15.


Interest expense.  Interest expense totaled US$9.3 million in 1Q16, a 22.5% increase from interest expense of US$7.6 million in 1Q15, as a result of a higher effective interest rate and outstanding debt balance related to recent aircraft deliveries.




Interest income.  Interest income totaled US$2.8 million, a 55.7% decrease over interest income of US$6.3 million in 1Q15, mostly due to the reduction of Venezuela cash balance given the foreign currency translation loss reported in our 2015 audited financial results.


Other, net. Other, net totaled a net gain of US$39.4 million in 1Q16, compared to a net gain of US$2.1 million in 1Q15. Other, net, for 1Q16, consists mainly of a fuel hedge mark-to-market gain of US$27.4 million, compared to a fuel hedge mark-to-market gain of US$7.1 million, and an US$18.1 non-operating income due to the currency exchange transaction on an approved Venezuela repatriation.


About Copa Holdings:

Copa Holdings is a leading Latin American provider of passenger and cargo services.  The Company, through its operating subsidiaries, provides service to 76 destinations in 31 countries in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, consisting of 100 aircraft: 77 Boeing 737NG aircraft and 23 EMBRAER-190s. For more information visit:



CONTACT: Copa Holdings S.A.

Investor Relations:

Ph: (507) 304-2774 (IR section)



This release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current plans, estimates and expectations, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement. The risks and uncertainties relating to the forward-looking statements in this release are among those disclosed in Copa Holdings’ filed disclosure documents and are, therefore, subject to change without prior notice.




Copa Holdings, S.A.

Income Statement - IFRS

(US$ Thousands)


  Unaudited   Unaudited   %   Unaudited   %
  1Q16   1Q15   Change   4Q15   Change
Operating Revenues                  
Passenger Revenue 537,695   613,538   -12.4%   512,150   5.0%
Cargo, mail and other 19,376   18,323   5.7%   20,451   -5.3%
Total Operating Revenue 557,072   631,861   -11.8%   532,601   4.6%
Operating Expenses                  
Aircraft fuel 120,549          160,791   -25.0%   136,881   -11.9%
Salaries and benefits 73,683   77,999   -5.5%   70,407   4.7%
Passenger servicing 60,498   66,123   -8.5%   63,689   -5.0%
Commissions 20,980   25,988   -19.3%   19,556   7.3%
Reservations and sales 26,037   21,500   21.1%   24,882   4.6%
Maintenance, material and repairs 29,412   25,708   14.4%   31,528   -6.7%
Depreciation 34,388   31,464   9.3%   34,083   0.9%
Flight operations 31,932   33,369   -4.3%   34,028   -6.2%
Aircraft rentals 30,809   30,244   1.9%   31,530   -2.3%
Landing fees and other rentals 13,302   13,748   -3.2%   13,481   -1.3%
Other 21,390   17,629   21.3%   33,458   -36.1%
Total Operating Expense 462,980   504,562   -8.2%   493,523   -6.2%
Operating Income 94,091   127,299   -26.1%   39,077   140.8%
Non-operating Income (Expense):                  
Interest expense (9,301)   (7,590)   22.5%   (8,922)   4.2%
Interest income 2,777   6,275   -55.7%   8,155   -65.9%
Other, net 39,362   2,130   n/m   (440,284)   n/m
Total Non-Operating Income/(Expense) 32,838   815   n/m   (441,051)   n/m
Income before Income Taxes 126,929   128,114   -0.9%   (401,973)   n/m
Provision for Income Taxes 11,474   14,926   -23.1%   6,499   76.6%
Net Income 115,456   113,188   2.0%   (408,472)   n/m
EPS - Basic and Diluted              2.74                  2.57   6.8%              -9.44   -129.1%
Shares - Basic and Diluted 42,109,094   44,077,111   -4.5%   43,285,727   -2.7%




Copa Holdings, S.A.  

Balance Sheet - IFRS

(US$ Thousands)

   March 31,   December 31, 
   2016   2015 
   (Unaudited)   (Audited) 
Current Assets:        
Cash and cash equivalents  $209,953   $204,715 
Restricted cash and cash equivalents   55,611    64,228 
Short-term investments   457,505    416,005 
Total cash, cash equivalents and short-term investments   723,069    684,948 
Accounts receivable, net of allowance for doubtful accounts   116,319    105,135 
Accounts receivable from related parties   557    642 
Expendable parts and supplies, net of allowance for obsolescence   62,984    62,247 
Prepaid expenses   53,988    48,667 
Other current assets   5,624    5,946 
Total Current Assets   962,541    907,585 
Long-term investments   864    861 
Property and Equipment:          
Owned property and equipment:          
Flight equipment   3,019,901    3,030,361 
Other equipment   118,760    121,205 
    3,138,661    3,151,566 
Less: Accumulated depreciation   (764,461)   (743,983)
    2,374,200    2,407,583 
Purchase deposits for flight equipment   240,966    243,070 
Total Property and Equipment   2,615,166    2,650,653 
Other Assets:          
Net pension asset   7,722    6,050 
Goodwill   20,380    20,380 
Intangible asset   50,085    49,046 
Deferred tax Assets   16,351    12,708 
Other assets   62,941    68,193 
Total Other Assets   157,479    156,377 
Total Assets  $3,736,050   $3,715,476 
Current Liabilities:          
Current maturities of long-term debt  $229,347   $245,514 
Accounts payable   95,817    94,741 
Accounts payable to related parties   9,265    5,605 
Air traffic liability   321,034    352,110 
Frequent flyer deferred revenue   26,810    18,884 
Taxes and interest payable   87,305    67,242 
Accrued expenses payable   67,135    82,948 
Other current liabilities   91,363    118,623 
Total Current Liabilities   928,076    985,667 
Non-Current Liabilities:          
Long-term debt   1,021,159    1,055,183 
Other long-term liabilities   67,148    54,339 
Deferred tax liabilities   37,224    32,865 
Total Non-Current Liabilities   1,125,531    1,142,387 
Total Liabilities   2,053,607    2,128,054 
Shareholders' Equity:          
Class A - 33,478,724 issued and  31,106,084 outstanding   20,984    20,924 
Class B - 10,938,125 shares issued and outstanding   7,466    7,466 
Additional paid in capital   58,432    57,455 
Treasury Stock   (136,388)   (136,388)
Retained earnings   1,732,725    1,638,733 
Accumulated other comprehensive income (loss)   (776)   (768)
Total Shareholders' Equity   1,682,443    1,587,422 
Total Liabilities and Shareholders' Equity  $3,736,050   $3,715,476 




Copa Holdings, S. A. and subsidiaries              

Consolidated Statement of Cash Flows              

For the three months ended March 31,              

(In US$ thousands)              

                2016   2015   2014
                  (Unaudited)   (Unaudited)   (Unaudited)
Cash flow from operating activities                     118,934                       83,361                       74,364
Cash flow (used in) from investing activities                      (42,044)                      (16,479)                       97,524
Cash flow used in financing activities                      (71,652)                      (67,916)                      (73,677)
Net increase (decrease) in cash and cash equivalents                         5,238                        (1,034)                       98,211
Cash and cash equivalents at January 1                     204,715                     221,443                     139,110
Cash and cash equivalents at March 31    $               209,953    $               220,409    $               237,321
Short-term investments *                     457,505                     332,000                     878,674
Long-term investments **                            864                     558,290                         6,589
Restricted cash and cash equivalents ***                       55,611                       48,872                               -   
Total cash and cash equivalents and investments at March 31    $               723,933    $            1,159,571    $            1,122,584


*Short term - investments include $417.1 million of cash in Venezuela at March 2014.
**Long term - investments include $452.4 million at March 2015 of cash in Venezuela.
***Restricted cash correspond to a margin calls to secure derivative financial instruments transactions.






This press release includes the following non-IFRS financial measures: CASM Excluding Fuel, Adjusted Net Income and Adjusted EPS. This supplemental information is presented because we believe it is a useful indicator of our operating performance and is useful in comparing our performance with other companies in the airline industry. These measures should not be considered in isolation, and should be considered together with comparable IFRS measures, in particular operating income and net income. The following is a reconciliation of these non-IFRS financial measures to the comparable IFRS measures:


Reconciliation of Net Income        

Excluding Special Items

    1Q16   1Q15   4Q15
Net income as Reported  $115,456   $113,188   $-408,472
Special Items (adjustments):               
     Unrealized (gain) loss on fuel hedging instruments   27,432    7,115    (15,296)
     (Loss) gain due to devaluation of Venezuelan Bolivar   18,134    (36)   (430,073)
     (Loss) gain due to devaluation of Argentinian Pesos   0    0    (6,901)
     Unrealized (gain) loss on Shares Repurchased   0    0    2,296 
Adjusted Net Income  $69,890   $106,110   $41,501 
Shares used for Computation (in thousands)               
     Basic and Diluted   42,109    44,077    43,286 
Adjusted earnings per share - Basic and Diluted   1.66    2.41    0.96 
Reconciliation Operating Costs per ASM               
Excluding Fuel and Special Items   1Q16   1Q15   4Q15
Operating Costs per ASM as Reported   8.3    9.3    9.0 
Aircraft fuel per ASM   (2.2)   (3.0)   (2.5)
Operating Costs per ASM excluding fuel   6.2    6.3    6.5