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, 2017



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: 1Q17 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: 5/10/2017    
  By:  /s/ José Montero  

Name: José Montero

Title: CFO











Copa Holdings Reports Net Income of $102.3 million and EPS of $2.41 for the First Quarter of 2017

Excluding special items, adjusted net income came in at $103.2 million, or EPS of $2.43 per share


Panama City, Panama --- May 10, 2017. Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2017 (1Q17). The terms “Copa Holdings" and "the Company" refer to the consolidated entity. The following financial information, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS). See the accompanying reconciliation of non-IFRS financial information to IFRS financial information included in the financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the first quarter of 2016 (1Q16).




§Copa Holdings reported net income of US$102.3 million for 1Q17 or earnings per share (EPS) of US$2.41, compared to net income of US$115.5 million or earnings per share of US$2.74 in 1Q16.


§Excluding special items, the Company would have reported an adjusted net income of US$103.2 million, or adjusted EPS of US$2.43, compared to an adjusted net income of US$69.9 million or adjusted EPS of US$1.66 in 1Q16. Special items for 1Q16 include a non-cash gain of US$27.4 million associated with the mark-to-market of fuel hedge contracts, and a US$18.1 million gain related to foreign currency fluctuations.


§Operating income for 1Q17 came in at US$117.5 million, representing a 24.4% increase over operating income of US$94.5 million in 1Q16, as a result of 4.3% additional capacity, and a 6.0% increase in unit revenue per available seat mile (RASM), partly offset by a 3.3% increase in unit costs. Operating margin for 1Q17 came in at 19.1%, compared to an operating margin of 16.9% in 1Q16.


§Total revenues for 1Q17 increased 10.6% to US$616.7 million. Yield per passenger mile increased 0.9% to 12.7 cents and RASM came in at 10.6 cents, or 6.0% above 1Q16.


§For 1Q17, consolidated passenger traffic grew 9.9% while consolidated capacity grew 4.3%. As a result, consolidated load factor for the quarter increased 4.1 percentage points to 81.5%.


§Operating cost per available seat mile (CASM) increased 3.3%, from 8.3 cents in 1Q16 to 8.6 cents in 1Q17. CASM excluding fuel costs increased 1.6% from 6.1 cents in 1Q16 to 6.2 cents in 1Q17.


§Cash, short-term and long-term investments ended 1Q17 at US$841.3 million, representing 37% of the last twelve months’ revenues.


§Copa Holdings took delivery of two B737-800s, ending the quarter with consolidated fleet of 101 aircraft – 66 Boeing 737-800s, 14 Boeing 737-700s, and 21 Embraer-190s.


§Copa Airlines reported consolidated on-time performance of 89.1% and a flight-completion factor of 99.9% for 1Q17, maintaining its position among the best in the industry.


Subsequent Events


§In April, Copa Airlines announced a new flight to Denver, Colorado, starting in December 2017.


§Copa Holdings announced it will host its Annual Investor Day on June 1, 2017, at the New York Stock Exchange.


§Copa Holdings will pay its second quarter dividend of US$0.51 per share on June 15, 2017, on all outstanding Class A and Class B shares, to stockholders of record as of May 31, 2017.





Consolidated Financial
& Operating Highlights
1Q17 1Q16 Variance vs. 1Q16 4Q16 Variance vs. 4Q16
Revenue Passengers Carried ('000) 2,264 2,120 6.8% 2,148 5.4%
RPMs (mm) 4,732 4,307 9.9% 4,568 3.6%
ASMs (mm) 5,808 5,566 4.3% 5,597 3.8%
Load Factor 81.5% 77.4% 4.1 p.p. 81.6% -0.1 p.p.
Yield 12.7 12.6 0.9% 12.8 -0.6%
PRASM (US$ Cents) 10.4 9.7 6.3% 10.4 -0.8%
RASM (US$ Cents) 10.6 10.0 6.0% 10.7 -1.2%
CASM (US$ Cents) 8.6 8.3 3.3% 9.5 -9.3%
CASM Excl. Fuel (US$ Cents) 6.2 6.1 1.6% 6.9 -10.0%
Fuel Gallons Consumed (Millions) 74.2 71.7 3.5% 72.4 2.6%
Avg. Price Per Fuel Gallon (US$ Dollars) 1.84 1.68 9.0% 1.96 -6.1%
Average Length of Haul (Miles) 2,090 2,031 2.9% 2,127 -1.7%
Average Stage Length (Miles) 1,274 1,222 4.3% 1,244 2.4%
Departures 31,095 31,549 -1.4% 30,499 2.0%
Block Hours 101,495 97,659 3.9% 98,150 3.4%
Average Aircraft Utilization (Hours) 11.3 10.7 5.1% 10.8 4.6%
Operating Revenues (US$ mm)             616.7 557.5 10.6% 601.3 2.6%
Operating Income (US$ mm)             117.5 94.5 24.4% 70.6 66.4%
Operating Margin 19.1% 16.9% 2.1 p.p. 11.7% 7.3 p.p.
Net Income (US$ mm) 102.3 115.5 -11.4% 90.5 13.0%
Adjusted Net Income (US$ mm) (1) 103.2 69.9 47.6% 54.7 88.6%
EPS - Basic and Diluted (US$) 2.41 2.74 -11.8% 2.14 13.0%
Adjusted EPS - Basic and Diluted (US$) (1) 2.43 1.66 46.9% 1.29 88.6%
# of Shares - Basic and Diluted ('000) 42,396 42,191 0.5% 42,383 0.0%

(1)Adjusted Net Income and Adjusted EPS for 1Q17, 1Q16 and 4Q16 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges and the impact of the Venezuelan 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 outstanding commercial execution and improving demand trends, as well as continued cost discipline. Higher load factors and yields have produced a significant unit revenue improvement and a year over year margin expansion.


Consolidated operating revenues increased 10.6% to US$616.7 million during the quarter on capacity growth of 4.3%. Load factor came in at 81.5%, or 4.1 percentage points above 1Q16, while yields came in at 12.7 cents, or 0.9% higher than 1Q16. As a result, passenger revenues per ASM (PRASM) increased 6.3% from 9.7 cents in 1Q16 to 10.4 cents in 1Q17.


Operating expenses for 1Q17 increased 7.8% to US$499.2 million, while operating expenses per ASM (CASM) increased 3.3% to 8.6 cents. Excluding fuel costs, unit costs increased 1.6% to 6.2 cents.


Aircraft fuel expense increased 12.9% or US$15.5 million compared to 1Q16, as a result of higher jet fuel prices and increased capacity. The Company’s effective jet fuel price, which includes a realized fuel hedge loss of US$1.1 million in 1Q17 and a US$29.0 million loss in 1Q16, increased 9.0%, from an average of US$1.68 per gallon in 1Q16 to US$1.84 per gallon in 1Q17.


For 1Q17, the Company had fuel hedges in place representing 5% of its consolidated volume. With regards to future fuel hedge contracts, the Company has covered about 5% of its projected consumption volume for the remainder of 2017, using jet fuel swaps at an average price of US$1.80 per gallon.


The Company recorded a non-operating expense of US$4.2 million for 1Q17 compared to non-operating income of US$32.4 million for 1Q16. Non-operating income for 1Q16 included a fuel hedge mark to market gain of US$27.4 million and a US$12.3 million gain related to foreign currency fluctuations.


Copa Holdings ended the quarter with US$841.3 million in cash, short-term and long-term investments, representing approximately 37% of the last twelve months´ revenues.


Total debt at the end of 1Q17 amounted to US$1.17 billion compared to US$1.18 billion at the end of 1Q16, all of which is related to aircraft financing.


The company has a very solid business model, which is based on operating the best and most convenient network for intra-Latin America travel from its hub based on Panama’s advantageous geographic position, with the region’s lowest unit costs, best on-time performance, and strongest balance sheet. Going forward, the Company expects to continue strengthening its long-term competitive position by taking advantage of new growth opportunities and implementing initiatives to further strengthen its network and product.






For 2017, the Company updates its guidance as follows: Consolidated capacity is now expected to grow approximately 7%, as a result of higher aircraft utilization. Given the limited visibility for the second half of the year, the Company is not changing its Operating Margin guidance; however it expects to achieve an operating margin towards the high end of the guidance range.


Financial Outlook  





Capacity - YOY ASM Growth +/-7% 1.5%
Operating Margin 15-17% 12.4%


Factored into the above mentioned outlook is a load factor of approximately 81%, Unit Revenues (RASM) of approximately 10.4 cents, Unit Costs excluding Fuel (Ex-Fuel CASM) of approximately 6.4 cents and an estimated effective price per gallon of jet fuel, including the effect of current hedge contracts and into-plane costs, of US$1.75 per gallon.




Operating revenue


Consolidated revenue for 1Q17 totaled US$616.7 million, a 10.6% or US$59.3 million increase over operating revenue of US$557.5 million in 1Q16, due to a 10.9% or US$59.0 million increase in passenger revenue.


Passenger revenue totaled US$601.5 million, an increase of 10.9% from passenger revenue of US$542.5 million in 1Q16. A 4.1 percentage point increase in load factor, combined with a 0.9% increase in passenger yield, resulted in a 6.3% increase in PRASM.


Cargo and mail revenue totaled US$12.9 million in 1Q17, a 2.8% increase from cargo, mail and other of US$12.5 million in 1Q16.


Other operating revenue totaled US$2.4 million in 1Q17, a 2.5% decrease from other operating revenue of US$2.5 million in 1Q16.


Operating expenses


For 1Q17, operating expenses increased 7.8% to US$499.2 million, representing operating cost per available seat mile (CASM) of 8.6 cents. Operating cost per available seat mile (CASM), excluding fuel costs, increased 1.6% from 6.1 cents in 1Q16 to 6.2 cents in 1Q17.


Fuel totaled US$136.3 million, a US$15.5 million or 12.9% increase over aircraft fuel of US$120.8 million in 1Q16. This increase was a result of an increase of 3.5% on gallons consumed given additional capacity and higher load factors, and a 9.0% higher average price per gallon of jet fuel (all-in), which averaged US$1.84 in 1Q17 as compared to US$1.68 in 1Q16. This average price per gallon of jet fuel for 1Q17 includes a $1.1 million realized fuel hedge loss, compared to a US$29 million fuel hedge loss in 1Q16.




Wages, salaries, benefits and other employees' expenses totaled US$100.8 million, an 8.2% increase over salaries and benefits of US$93.2 million in 1Q16. This was mainly driven by the full year effect of salary inflation adjustments and variable compensation increases.


Passenger servicing totaled US$23.1 million, a 19.8% increase over passenger servicing of US$19.3 million in 1Q16. This increase resulted primarily from passenger traffic growth and length of haul increases.


Airport facilities and handling charges totaled US$41.0 million, a 10.4% increase over 1Q16. This increase was primarily a result of higher effective rates related to airport handling.


Sales and distribution totaled US$49.8 million, a 0.8% increase over an expense of US$49.5 million in 1Q16. This increase was mainly a result of higher net bookings, offset by lower travel agency related expenses.


Maintenance, material and repairs totaled US$25.6 million, an 11.3% decrease from maintenance, material and repairs of US$28.9 million in 1Q16. This decrease was a result of lease return expenses during 1Q16.


Depreciation and amortization totaled US$39.8 million in 1Q17, a 15.8% increase over depreciation of US$34.4 million in 1Q16. This increase was primarily the result of adjusting the fleet’s useful life assumption from 30 to 27 years.


Flight operations, aircraft rentals and other rentals, cargo and courier expenses combined increased 2.6%, from US$58.2 million in 1Q16 to US$59.7 million in 1Q17, mainly as a result of additional flying, partly offset by lower aircraft rental expense due to lease returns.


Other operating and administrative expenses totaled US$23.0 million in 1Q17, an increase of 6% vs 1Q16. This decrease was mainly driven by increased overhead expenses given additional capacity.


Non-operating Income (Expense)


Consolidated non-operating income (expense) resulted in a net expense of US$4.2 million in 1Q17, compared to an income of US$32.4 million in 1Q16.


Finance cost totaled US$8.9 million in 1Q17, a 4.1% decrease from interest expense of US$9.3 million in 1Q16, as a result of a lower debt balance, partially offset by higher interest rates.


Finance income totaled US$3.4 million, a 24.1% increase over interest income of US$2.8 million in 1Q16, as a result of higher investments and higher interest rates.


Gain (loss) on foreign currency fluctuations totaled US$2.7 million, compared to US$12.3 million in 1Q16.


Net change in the value of derivatives resulted in a loss of US$0.9 million, compared to a gain of US$27.4 million in 1Q16.


Other non-operating (income) expense resulted in a net expense of US$0.6 million in 1Q17 compared to a net expense of US$0.8 million in 1Q16.




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: 80 Boeing 737NG aircraft and 21 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 subject to change without prior notice






Copa Holdings, S.A.

Income Statement - IFRS

(US$ Thousands)                    


   Unaudited   Unaudited   %   Unaudited   % 
   1Q17   1Q16*   Change   4Q16*   Change 
Operating Revenues                    
Passenger revenue   601,478    542,499    10.9%   584,250    2.9%
Cargo and mail revenue   12,856    12,511    2.8%   14,063    -8.6%
Other operating revenue   2,389    2,450    -2.5%   2,995    -20.2%
Total Operating Revenue   616,722    557,460    10.6%   601,308    2.6%
Operating Expenses                         
Fuel   136,343    120,803    12.9%   142,087    -4.0%
Wages, salaries, benefits and other employees' expenses   100,817    93,155    8.2%   97,454    3.5%
Passenger servicing   23,074    19,256    19.8%   25,320    -8.9%
Airport facilities and handling charges   40,966    37,105    10.4%   41,616    -1.6%
Sales and distribution   49,841    49,458    0.8%   50,626    -1.6%
Maintenance, materials and repairs   25,596    28,871    -11.3%   34,452    -25.7%
Depreciation and amortization   39,832    34,388    15.8%   54,572    -27.0%
Flight operations   24,031    21,874    9.9%   22,394    7.3%
Aircraft rentals and other rentals   34,231    35,131    -2.6%   33,728    1.5%
Cargo and courier expenses   1,464    1,225    19.5%   1,764    -17.0%
Other operating and administrative expenses   23,001    21,708    6.0%   26,679    -13.8%
Total Operating Expense   499,197    462,974    7.8%   530,692    -5.9%
Operating Profit   117,526    94,486    24.4%   70,616    66.4%
Non-operating Income (Expense):                         
Finance cost   (8,921)   (9,301)   -4.1%   (8,894)   0.3%
Finance income   3,446    2,777    24.1%   3,479    -1.0%
Gain (loss) on foreign currency fluctuations   2,652    12,312    -78.5%   9,738    -72.8%
Net change in fair value of derivatives   (860)   27,432    -103.1%   24,341    -103.5%
Other non-operating (income) expense   (558)   (780)   -28.5%   (365)   52.8%
Total Non-Operating Income/(Expense)   (4,241)   32,440    -113.1%   28,299    -115.0%
Profit before taxes   113,284    126,926    -10.7%   98,916    14.5%
Income tax expense   10,971    11,474    -4.4%   8,371    31.1%
Net Profit   102,314    115,452    -11.4%   90,544    13.0%
EPS - Basic and Diluted   2.41    2.74    -11.8%   2.14    13.0%
Shares - Basic and Diluted   42,395,784    42,191,326    0.5%   42,382,757    0.0%


*During 2017, the Company implemented a business, planning and financial consolidation system, which resulted in a new classification of the chart of accounts. Prior periods have been reclassified for ease of comparison.




Copa Holdings, S. A.

Balance Sheet - IFRS    

(US$ Thousands)


   March 31   December 31 
   2017   2016 
   (Unaudited)   (Unaudited) 
Current Assets        
Cash and cash equivalents   269,896    331,687 
Restricted cash and cash equivalents   -    - 
Short-term investments   570,497    483,002 
Total cash, cash equivalents and short-term investments   840,393    814,689 
Accounts receivable, net   138,228    113,408 
Accounts receivable from related parties   35    499 
Expendable parts and supplies, net   78,053    74,502 
Prepaid expenses   66,931    58,370 
Other current assets   7,206    7,650 
TOTAL CURRENT ASSETS   1,130,846    1,069,118 
Long-term investments   954    953 
Long-term accounts receivable   2,503    1,957 
Long-term prepaid expenses   25,111    26,398 
Property and equipment, net   2,658,867    2,623,682 
Intangible, net   70,705    69,502 
Net pension asset   9,211    8,826 
Deferred tax assets   17,862    18,339 
Other Non-Current Assets   31,716    27,064 
TOTAL NON-CURRENT ASSETS   2,816,929    2,776,721 
TOTAL ASSETS   3,947,775    3,845,839 
Current Liabilities:          
Current maturities of long-term debt   166,549    222,718 
Accounts payable   87,600    104,590 
Accounts payable to related parties   9,143    8,680 
Air traffic liability   435,827    395,580 
Frequent flyer deferred revenue   35,386    35,368 
Taxes and interest payable   71,216    68,483 
Employee benefits obligations   33,360    41,707 
Income tax payable   6,585    1,401 
Other Current Liabilities   5,279    4,385 
TOTAL CURRENT LIABILITIES   850,945    882,912 
Long-term debt   1,007,866    961,414 
Other long - term liabilities   121,883    114,268 
Deferred tax Liabilities   41,467    44,974 
TOTAL NON-CURRENT LIABILITIES   1,171,216    1,120,656 
TOTAL LIABILITIES   2,022,161    2,003,568 
Class A - 33,765,298 issued and 31,177,904 outstanding   20,951    20,988 
Class B - 10,938,125 shares issued and outstanding   7,466    7,466 
Additional Paid-In Capital   67,582    64,986 
Treasury Stock   (136,388)   (136,388)
Retained Earnings   1,865,477    1,552,547 
Net Income   102,385    334,544 
Other Comprehensive Income   (1,859)   (1,872)
TOTAL EQUITY   1,925,614    1,842,271 
TOTAL EQUITY LIABILITIES   3,947,775    3,845,839 




Copa Holdings, S. A. and subsidiaries            

Consolidated Statement of Cash Flows            

For the three months ended March 31,            

(In US$ thousands)              


   2017   2016   2015 
   (Unaudited)   (Unaudited)   (Unaudited) 
Cash flow from operating activities   132,752    118,934    83,361 
Cash flow used in investing activities   (74,800)   (42,044)   (16,479)
Cash flow used in financing activities   (119,743)   (71,652)   (67,916)
Net (decrease) increase  in cash and cash equivalents   (61,791)   5,238    (1,034)
Cash and cash equivalents at January 1   331,687    204,715    221,443 
Cash and cash equivalents at March 31  $269,896   $209,953   $220,409 
Short-term investments   570,497    457,505    332,000 
Long-term investments *   954    864    558,290 
Restricted cash and cash equivalents **   -    55,611    48,872 
Total cash and cash equivalents and investments at March 31  $841,347   $723,933   $1,159,571 

*Long term investments include $452.4 million at March 2015 of cash in Venezuela.
**Restricted cash corresponds to margin calls to secure derivative financial instruments transactions.




Copa Holdings, S.A.




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 Adjusted Net Income            
and Adjusted EPS  1Q17   1Q16   4Q16 
Net profit as Reported  $102,314   $115,452   $90,544 
Special Items (adjustments):               
Gain (loss) on foreign currency fluctuations        18,134    11,501 
Net change in fair value of derivatives   (860)   27,432    24,341 
Adjusted Net Income  $103,174   $69,886   $54,702 
Shares used for Computation (in thousands)               
     Basic and Diluted   42,396    42,191    42,383 
Adjusted earnings per share - Basic and Diluted   2.43    1.66    1.29 
Reconciliation of Operating Costs per ASM               
Excluding Fuel and Special Items   1Q17   1Q16   4Q16
Operating Costs per ASM as Reported   8.6    8.3    9.5 
Aircraft fuel per ASM   (2.3)   (2.2)   (2.5)
Operating Costs per ASM excluding fuel   6.2    6.1    6.9