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 Aug, 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: 2Q16 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: 8/3/2016  
  By:  /s/ José Montero

Name: José Montero

Title: CFO





Exhibit 99.1



Copa Holdings Reports Financial Results for the Second Quarter of 2016

Excluding special items, adjusted net income came in at $21.5 million, or Adj. EPS of $0.51


Panama City, Panama --- August 3, 2016. Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2016 (2Q16). 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 the financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the second quarter of 2015 (2Q15).




§Copa Holdings reported net income of US$54.5 million for 2Q16, or diluted earnings per share (EPS) of US$1.29. Excluding special items, Copa Holdings would have reported an adjusted net income of $21.5 million, or $0.51 per share, a 47.6% decrease over adjusted net income of US$41.0 million or US$0.93 per share for 2Q15.


§Operating income for 2Q16 came in at US$34.2 million, a 30.5% decrease over operating income of US$49.2 million in 2Q15. Operating margin for the period came in at 6.9%, compared to 9.1% in 2Q15, as a result of lower unit revenues partially offset by lower unit costs.


§Operating results for the quarter were affected by realized fuel hedge losses of US$21.2 million, compared to US$21.3 million in 2Q15. Excluding these realized fuel hedge losses, operating margin for the quarter would have been 11.2% for 2Q16, and 13.1% for 2Q15.


§For 2Q16, passenger traffic (RPMs) increased 6.2% on a 0.4% capacity contraction. As a result, consolidated load factor came in at 78.3%, or 4.9 percentage points above 2Q15.


§Total revenues decreased 8.2% to US$494.4 million, as Yield per passenger mile decreased 14.0% to 11.3 cents. Operating revenue per available seat mile (RASM) decreased 7.7% to 9.3 cents.


§Operating cost per available seat mile (CASM) decreased 5.5%, from 9.1 cents in 2Q15 to 8.6 cents in 2Q16, mainly due to lower jet fuel costs. CASM excluding fuel increased 1% to 6.3 cents.


§Cash, short-term and long-term investments ended 2Q16 at US$764.7 million, an increase of US$40.8 million versus 1Q16, which represents 36% of the last twelve months’ revenues.


§Copa Holdings took delivery of one Boeing 737-800 aircraft, ending the quarter with a consolidated fleet of 101 aircraft.


§In June, Copa Airlines inaugurated service to two new destinations, Chiclayo in Perú and Holguín, our third city in Cuba.


§For 2Q16, Copa Holdings reported consolidated on-time performance of 86.5% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.




§On July 1st Copa Airlines inaugurated its third new destination for 2016, Rosario, Argentina.


§Copa Holdings will pay its third quarter dividend of US$0.51 per share on September 15, 2016, on all outstanding Class A and Class B shares, to stockholders of record as of August 31, 2016.





Consolidated Financial & Operating Highlights 2Q16 2Q15 % Change 1Q16 % Change
Revenue Passengers Carried ('000) 2,020 1,868 8.1% 2,120 -4.7%
RPMs (mm) 4,178 3,933 6.2% 4,307 -3.0%
ASMs (mm) 5,335 5,359 -0.4% 5,566 -4.1%
Load Factor 78.3% 73.4% 4.9 p.p. 77.4% 0.9 p.p.
Yield 11.3 13.2 -14.0% 12.5 -9.3%
PRASM (US$ Cents) 8.9 9.7 -8.2% 9.7 -8.2%
RASM (US$ Cents) 9.3 10.0 -7.7% 10.0 -7.4%
CASM (US$ Cents) 8.6 9.1 -5.5% 8.3 3.7%
CASM Excl. Fuel (US$ Cents) 6.3 6.2 1.0% 6.2 2.1%
Breakeven Load Factor 66.6% 61.9% 4.7 p.p. 56.5% 10.1 p.p.
Adjusted Breakeven Load Factor (1) 73.7% 60.2% 13.5 p.p. 65.0% 8.7 p.p.
Fuel Gallons Consumed (Millions) 69.4 67.9 2.1% 71.7 -3.3%
Avg. Price Per Fuel Gallon (US$ Dollars) 1.81 2.30 -21.3% 1.68 7.4%
Average Length of Haul (Miles) 2,068 2,105 -1.8% 2,031 1.8%
Average Stage Length (Miles) 1,194 1,243 -3.9% 1,223 -2.3%
Departures 30,313 30,094 0.7% 31,518 -3.8%
Block Hours 95,171 95,694 -0.5% 97,632 -2.5%
Average Aircraft Utilization (Hours) 10.4 10.8 -3.5% 10.7 -2.8%
Operating Revenues (US$ mm) 494.4 538.4 -8.2% 557.1 -11.2%
Operating Income (US$ mm) 34.2 49.2 -30.5% 94.1 -63.7%
Operating Margin 6.9% 9.1% -2.2 p.p. 16.9% -10.0 p.p.
Net Income (US$ mm) 54.5 64.1 -14.9% 115.5 -52.8%
Adjusted Net Income (US$ mm) (1) 21.5 41.0 -47.6% 69.9 -69.3%
EPS - Basic and Diluted (US$) 1.29 1.46 -11.1% 2.74 -52.8%
Adjusted EPS - Basic and Diluted (US$) (1) 0.51 0.93 -45.2% 1.66 -69.3%
# of Shares - Basic and Diluted ('000) 42,117 44,038 -4.4% 42,109 0.0%

(1)Adjusted Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 2Q16, 2Q15, and 1Q16 exclude non-cash charges/gains associated with mark-to-market of fuel hedges, and also exclude charges/gains related to the Venezuelan currency.


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








Copa Holdings’ second quarter results reflect a low yield environment, mainly driven by the continued economic weakness in Brazil, Colombia and Venezuela, partially offset by the benefits of an aggressive capacity management strategy, an increase in overall traffic and lower unit costs year-over-year. It is important to note that our results were significantly affected by realized fuel hedge losses, which had a negative impact on our operating margins for the quarter, excluding these realized fuel hedge losses the company would have reported an operating margin of 11.2% in 2Q16.


Total revenues decreased 8.2% to US$494.4 million during the quarter on a capacity contraction of 0.4%. Load factor came in at 78.3%, or 4.9 percentage points above 2Q15, while yields decreased 14.0% to 11.3 cents. As a result, passenger revenues per ASM (PRASM) decreased 8.2%, from 9.7 cents in 2Q15 to 8.9 cents in 2Q16.

Consolidated operating expenses for the quarter decreased 5.9% to US$460.3 million, while consolidated operating expenses per ASM (CASM) decreased 5.5% to 8.6 cents. Excluding fuel costs, unit costs came in at 6.3 cents.


Aircraft fuel expense decreased 19.7%, or US$30.6 million, compared to 2Q15, mostly as a result of lower fuel prices. The Company’s effective jet fuel price, which includes a realized hedge loss of US$21.2 million in 2Q16 and US$21.3 million in 2Q15, decreased from an average of US$2.30 per gallon in 2Q15 to US$1.81 per gallon in 2Q16. 

For 2Q16, the Company had fuel hedges in place representing 32% of its consolidated volume. The Company has hedges for approximately 32% of 3Q16, and 35% of 4Q16´s expected fuel consumption. For 2017, the Company has hedged less than 6% of its forecasted fuel consumption.


The Company recorded a net non-operating income of US$26.1 million for 2Q16 compared to a net non-operating income of US$22.1 million for 2Q15. Non-operating income for 2Q16 included a fuel hedge mark-to-market gain of US$40.6 million, a currency exchange translation loss of US$7.6 million related to the devaluation of the DICOM rate in Venezuela, and a net interest expense of US$5.9 million. 2Q15 non-operating income consisted mainly of a fuel hedge mark-to-market gain of US$23.4 million.


Copa Holdings closed the quarter with US$764.7 million in cash, short-term and long-term investments, representing 36% of last twelve months´ revenues.


At the end of 2Q16, total debt amounted to US$1.25 billion, all of which is related to aircraft and equipment financing.


We believe we have a very solid and relevant 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 unit costs among the lowest of any full service carrier in the Americas, world leading on-time performance, and a strong balance sheet. Going forward, the Company will continue to strengthen its long-term competitive position by taking advantage of new growth opportunities, a flexible fleet plan, and implementing initiatives to further strengthen its network and product.







For 2016, the Company updates its guidance as follows: We maintain consolidated capacity growth at +/-2%,


We are increasing our Load factor guidance to +/-79%. As a result, Unit revenues (RASM) are now expected to come in higher at +/-9.8 cents. Unit costs excluding fuel, or CASM ex-fuel, are still expected to come in at +/-6.4 cents.


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$1.75. As a result, the Company is increasing its operating margin guidance to a range of 11% to 13% for 2016.



Financial Outlook  

2016 - Full Year


2016 - Full Year




Capacity - ASM Growth +/-2% +/-2% 4.4%
Average Load Factor +/-79% +/-76% 75.2%
RASM (cents) +/-9.8 +/-9.6 10.4
CASM Ex-fuel (cents) +/-6.4 +/-6.4 6.4
Operating Margin 11-13% 9-11% 11.8%




Operating revenue


Copa Holdings’ operating revenue for 2Q16 totaled US$494.4 million, an 8.2% decrease over operating revenue of US$538.4 million in 2Q15. This decrease was primarily due to an 8.6% or US$44.6 million decrease in passenger revenue.


Passenger revenue. For 2Q16, passenger revenue totaled US$472.9 million, an 8.6% decrease over passenger revenue of US$517.5 million in 2Q15. Passenger yield decreased 14.0% to 11.3, while load factor increased 4.9p.p. which resulted in an 8.2% decrease in passenger revenue per ASM (PRASM).


Cargo, mail and other. Cargo, mail and other revenue totaled US$21.5 million in 2Q16, a 3.2% increase from US$20.8 million in 2Q15.


Operating expenses


For 2Q16, consolidated operating expenses decreased 5.9% to US$460.3 million, representing operating cost per available seat mile (CASM) of 8.6 cents. CASM, excluding fuel costs, increased 1.0% to 6.3 cents. An overview of the major variances on a consolidated basis follows:






Aircraft fuel. For 2Q16, aircraft fuel totaled US$125.3 million, a US$30.6 million or 19.7% decrease over aircraft fuel of US$155.9 million in 2Q15. This decrease was primarily a result of a 21.3% decrease in the average price per gallon of jet fuel (all-in), which averaged US$1.81 in 2Q16 as compared to US$2.30 in 2Q15. The all-in average price per gallon of jet fuel for 2Q16 includes a $21.2 million fuel hedge loss, similar to the US$21.3 million loss in 2Q15. Excluding the effect of realized fuel hedge loss for both periods, fuel prices decreased 24.4%, from US$1.98 in 2Q15, to US$1.50 in 2Q16.


Salaries and benefits. For 2Q16, salaries and benefits totaled US$69.1 million, a 0.2% decrease over salaries and benefits of US$69.2 million in 2Q15 mainly driven by foreign exchange rates and headcount efficiencies, partially offset by the full year effect of salary adjustments.


Passenger servicing. For 2Q16, passenger servicing totaled US$63.6 million, a 0.4% increase over passenger servicing of US$63.3 million in 2Q15. This increase resulted primarily from additional passengers carried due to higher load factors, offset by lower overall passenger related costs.


Commissions. For 2Q16, commissions totaled US$20.6 million, a 1.3% increase over commissions of US$20.4 million in 2Q15. This increase was mainly a result of higher credit card penetration year over year.


Reservations and sales. Reservations and sales totaled US$23.9 million, an 8.4% increase from reservation and sales of US$22.0 million in 2Q15. This increase was primarily a result of additional bookings given a higher load factor year over year.


Maintenance, material and repairs. For 2Q16, maintenance, material and repairs totaled US$26.2 million, a 6.5% decrease over maintenance, material and repairs of US$28.0 million in 2Q15. This decrease was mainly a result of timing of maintenance events and contract negotiations.


Depreciation. Depreciation totaled US$34.8 million in 2Q16, a 2.8% increase over depreciation of US$33.9 million in 2Q15. This increase was primarily driven by the full-year effect of 2015 aircraft deliveries, 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 2.7% from US$77.5 million in 2Q15 to US$75.4 million in 2Q15, primarily as a result of efficiencies in crew-related expenses.


Other. Other expenses totaled US$21.4 million, an increase of US$2.5 million over 2Q15. 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 US$26.1 million in 2Q16, compared to US$22.1 million in 2Q15.


Interest expense. Interest expense totaled US$9.1 million in 2Q16, a 9.2% increase from interest expense of US$8.4 million in 2Q15, as a result of a higher effective interest rate and outstanding debt balance related to recent aircraft deliveries.


Interest income. Interest income totaled US$3.2 million, a 44.1% decrease over interest income of US$5.8 million in 2Q15 due to the reduction of our cash balances in Venezuela.


Other, net. Other, net totaled a net gain of US$32.0 million in 2Q16, compared to a net gain of US$24.7 million in 2Q15. Other, net for 2Q16, includes a fuel hedge mark-to-market gain of US$40.6 million and a US$7.6 million translation loss due to currency devaluation in Venezuela. Other, net for 2Q15 consisted mainly of a fuel hedge mark-to-market gain of US$23.4 million.





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 74 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 101 aircraft: 78 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   %
  2Q16   2Q15   Change   1Q16   Change
Operating Revenues                  
Passenger Revenue 472,931   517,508   -8.6%   537,695   -12.0%
Cargo, mail and other 21,518   20,846   3.2%   19,376   11.1%
Total Operating Revenue 494,449   538,354   -8.2%   557,072   -11.2%
Operating Expenses                  
Aircraft fuel 125,260          155,908   -19.7%   120,549   3.9%
Salaries and benefits 69,065   69,204   -0.2%   73,683   -6.3%
Passenger servicing 63,560   63,315   0.4%   60,498   5.1%
Commissions 20,642   20,383   1.3%   20,980   -1.6%
Reservations and sales 23,881   22,033   8.4%   26,037   -8.3%
Maintenance, material and repairs 26,190   27,999   -6.5%   29,412   -11.0%
Depreciation 34,815   33,855   2.8%   34,388   1.2%
Flight operations 30,540   32,605   -6.3%   31,932   -4.4%
Aircraft rentals 30,833   30,034   2.7%   30,809   0.1%
Landing fees and other rentals 14,046   14,889   -5.7%   13,302   5.6%
Other 21,434   18,973   13.0%   21,390   0.2%
Total Operating Expense 460,266   489,197   -5.9%   462,980   -0.6%
Operating Income 34,183   49,157   -30.5%   94,091   -63.7%
Non-operating Income (Expense):                  
Interest expense (9,147)   (8,372)   9.2%   (9,301)   -1.7%
Interest income 3,238   5,789   -44.1%   2,777   16.6%
Other, net 32,025   24,657   29.9%   39,362   -18.6%
Total Non-Operating Income/(Expense) 26,117   22,074   18.3%   32,838   -20.5%
Income before Income Taxes 60,299   71,231   -15.3%   126,929   -52.5%
Provision for Income Taxes 5,772   7,134   -19.1%   11,474   -49.7%
Net Income 54,527   64,097   -14.9%   115,456   -52.8%
EPS - Basic and Diluted 1.29   1.46   -11.1%   2.74   -52.8%
Shares - Basic and Diluted 42,117,261   44,037,684   -4.4%   42,109,094   0.0%





Copa Holdings, S. A.        
Balance Sheet - IFRS        
(US$ Thousands)  June 30,   December 31, 
   2016   2015 
ASSETS  (Unaudited)   (Audited) 
Current Assets:          
Cash and cash equivalents  $207,617   $204,715 
Restricted cash and cash equivalents   20,787    64,228 
Short-term investments   535,484    416,005 
Total cash, cash equivalents and short-term investments   763,888    684,948 
Accounts receivable, net of allowance for doubtful accounts   123,088    105,135 
Accounts receivable from related parties   576    642 
Expendable parts and supplies, net of allowance for obsolescence   68,698    62,247 
Prepaid expenses   44,950    48,667 
Other current assets   9,405    5,946 
Total Current Assets   1,010,605    907,585 
Long-term investments   856    861 
Property and Equipment:          
Owned property and equipment:          
Flight equipment   3,080,513    3,030,361 
Other equipment   120,427    121,205 
    3,200,940    3,151,566 
Less: Accumulated depreciation   (795,669)   (743,983)
    2,405,271    2,407,583 
Purchase deposits for flight equipment   222,514    243,070 
Total Property and Equipment   2,627,785    2,650,653 
Other Assets:          
Net pension asset   8,130    6,050 
Goodwill   20,380    20,380 
Intangible asset   52,483    49,046 
Deferred tax Assets   16,870    12,708 
Other assets   52,931    68,193 
Total Other Assets   150,794    156,377 
Total Assets  $3,790,040   $3,715,476 
Current Liabilities:          
Current maturities of long-term debt  $214,667   $245,514 
Accounts payable   88,845    94,741 
Accounts payable to related parties   10,810    5,605 
Air traffic liability   384,813    352,110 
Frequent flyer deferred revenue   25,893    18,884 
Taxes and interest payable   87,759    67,242 
Accrued expenses payable   66,820    82,948 
Other current liabilities   50,545    118,623 
Total Current Liabilities   930,152    985,667 
Non-Current Liabilities:          
Long-term debt   1,035,440    1,055,183 
Other long-term liabilities   69,170    54,339 
Deferred tax liabilities   39,151    32,865 
Total Non-Current Liabilities   1,143,761    1,142,387 
Total Liabilities   2,073,913    2,128,054 
Shareholders' Equity:          
Class A - 33,477,536 issued and  31,111,310 outstanding   20,988    20,924 
Class B - 10,938,125 shares issued and outstanding   7,466    7,466 
Additional paid in capital   59,072    57,455 
Treasury Stock   (136,388)   (136,388)
Retained earnings   1,765,765    1,638,733 
Accumulated other comprehensive income (loss)   (776)   (768)
Total Shareholders' Equity   1,716,127    1,587,422 
Total Liabilities and Shareholders' Equity  $3,790,040   $3,715,476 






Copa Holdings, S. A. and subsidiaries


Consolidated Statement of Cash Flows


For the six months ended June 30,


(In US$ thousands)


   2016   2015   2014 
   (Unaudited)   (Unaudited)   (Unaudited) 
Cash flow from operating activities   267,049    194,620    273,835 
Cash flow (used in) from investing activities   (124,608)   (59,718)   (47,520)
Cash flow used in financing activities   (139,539)   (166,017)   (193,322)
Net increase (decrease) in cash and cash equivalents   2,902    (31,115)   32,993 
Cash and cash equivalents at January 1   204,715    221,443    139,110 
Cash and cash equivalents at June 30  $207,617   $190,328   $172,103 
Short-term investments *   535,484    410,000    723,808 
Long-term investments **   856    526,132    253,875 
Restricted cash and cash equivalents ***   20,787    27,260    52,425 
Total cash and cash equivalents and investments at June 30  $764,744   $1,153,720   $1,202,211 


* Short-term investments include $264 million of cash in Venezuela at June 2014.


** Long-term investments include $435 million and $253 million at June 2015 and 2014 of cash in Venezuela, respectively.


*** Restricted cash correspond to a margin calls to secure derivative financial instruments transactions.







This press release includes the following non IFRS financial measures: Adjusted Breakeven Load Factor, 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   2Q16   2Q15   1Q16
Net income as Reported  $54,527   $64,097   $115,456 
Special Items (adjustments):               
     Unrealized gain (loss) on fuel hedging instruments   40,644    23,409    27,432 
     (Loss) gain due to devaluation of Venezuelan Bolivar   (7,607)   (294)   18,134 
Adjusted Net Income  $21,490   $40,982   $69,890 
Shares used for Computation (in thousands)               
     Basic and Diluted   42,117    44,038    42,109 
Adjusted earnings per share - Basic and Diluted   0.51    0.93    1.66 
Reconciliation of Operating Costs per ASM               
Excluding Fuel and Special Items   2Q16   2Q15   1Q16 
Operating Costs per ASM as Reported   8.6    9.1    8.3 
Aircraft fuel per ASM   (2.3)   (2.9)   (2.2)
Operating Costs per ASM excluding fuel   6.3    6.2    6.2 
Reconciliation of Breakeven Load Factor               
Excluding Special Items   2Q16   2Q15   1Q16 
Total Operating Expenses, Non-Operating Results
and Provision for Income Taxes
   439,922    474,258    441,616 
Breakeven Load Factor   66.6%   61.9%   56.5%
Special Items (adjustments):               
     Unrealized gain (loss) on fuel hedging instruments   40,644    23,409    27,432 
     (Loss) gain due to devaluation of Venezuelan Bolivar   (7,607)   (294)   18,134 
Total Operating Expenses, Non-Operating Results
and Provision for Income Taxes excluding special items
  $472,959   $497,372   $487,182 
Adjusted Breakeven Load Factor (Excluding Special items)   73.7%   60.2%   65.0%