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 November, 2019


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: 3Q19 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: 11/14/2019  
  By:  /s/ José Montero

Name: José Montero

    Title: CFO





Exhibit 99.1



Copa Holdings Reports Net Profit of $104.0 million and EPS of $2.45 for the Third Quarter of 2019


Panama City, Panama --- Nov 13, 2019. Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the third quarter of 2019 (3Q19). 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 third quarter of 2018 (3Q18).




§Copa Holdings reported net profit of US$104.0 million for 3Q19 or earnings per share (EPS) of US$2.45, compared to net profit of US$57.6 million or earnings per share of US$1.36 in 3Q18.


§Operating profit for 3Q19 came in at US$132.9 million, representing a 70.9% increase from an operating profit of US$77.8 million in 3Q18.


§Total revenues for 3Q19 increased 5.3% to US$708.2 million. Yield per passenger mile increased 7.9% to 12.5 cents and revenue per available seat mile (RASM) increased 9.4% to 11.1 cents.


§Operating cost per available seat mile (CASM) increased 0.5% to 9.0 cents in 3Q19. Excluding fuel costs, CASM increased 5.5% from 5.9 cents in 3Q18 to 6.2 cents in 3Q19, mainly due to the decrease in capacity related to the grounding of the Boeing MAX fleet.


§Operating margin for 3Q19 came in at 18.8%, 7.2 percentage points higher than the 11.6% generated in 3Q18.


§While capacity (measured in available seat miles, or ASMs) decreased by 3.7% in 3Q19 due to the grounding of the Boeing MAX fleet, consolidated passenger traffic (measured in revenue passenger miles, or RPMs) decreased by only 2.2%. As a result, consolidated load factor for the quarter increased 1.4 percentage points to 85.6%.


§The sum of cash, short-term and long-term investments was US$885.5 million at the end of 3Q19, representing approximately 33% of the last twelve months’ revenues.


§Despite the operational challenges presented by the grounding of its Boeing MAX fleet, Copa Airlines delivered an on-time performance of over 92% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.


§Copa Holdings ended the quarter with a consolidated fleet of 103 aircraft – 68 Boeing 737-800s, 14 Boeing 737-700s, 15 Embraer-190s and 6 Boeing MAX9s.


§The Company has not taken any aircraft deliveries since the world-wide grounding of the Boeing MAX fleet took effect in March 2019. According to its original growth plan for 2019, the Company should have received six additional Boeing MAX9s during the first three quarters of the year and would have received one more in the fourth quarter to end the year with 13 Boeing MAX9 aircraft.


Subsequent Events


§Copa Holdings will pay its fourth quarterly dividend of $0.65 per share on December 13, to all Class A and Class B shareholders on record as of November 29, 2019.


§As part of the world-wide grounding of the Boeing MAX fleet, the Company has removed all Boeing MAX operations from its schedule until mid-February 2020.


§As part of its plan to increase efficiencies, the Company has decided to accelerate the exit of its E190 fleet and is planning to sell the remaining 14 aircraft over the next 18 months, 3 years earlier than previously planned. This anticipated exit could result in a book loss in the range of US$90 million related to the sale of the aircraft and spare parts inventory.






Consolidated Financial
& Operating Highlights
  3Q19  3Q18*  Variance
vs. 3Q18*
   2Q19  Variance
vs. 2Q19
Revenue Passengers Carried ('000)   2,703    2,591    4.3%   2,550    6.0%
RPMs (mm)   5,466    5,587    -2.2%   5,249    4.1%
ASMs (mm)   6,383    6,629    -3.7%   6,166    3.5%
Load Factor   85.6%   84.3%   1.4 p.p.    85.1%   0.5 p.p. 
Yield   12.5    11.6    7.9%   11.8    6.0%
PRASM (US$ Cents)   10.7    9.8    9.7%   10.1    6.7%
RASM (US$ Cents)   11.1    10.1    9.4%   10.5    6.0%
CASM (US$ Cents)   9.0    9.0    0.5%   9.1    -1.2%
CASM Excl. Fuel (US$ Cents)   6.2    5.9    5.5%   6.2    -0.3%
Fuel Gallons Consumed (Millions)   82.0    84.2    -2.7%   79.3    3.3%
Avg. Price Per Fuel Gallon (US$ Dollars)   2.16    2.40    -10.2%   2.22    -3.0%
Average Length of Haul (Miles)   2,022    2,156    -6.2%   2,058    -1.8%
Average Stage Length (Miles)   1,295    1,331    -2.7%   1,279    1.3%
Departures   33,373    33,775    -1.2%   32,676    2.1%
Block Hours   109,614    114,009    -3.9%   106,425    3.0%
Average Aircraft Utilization (Hours)   11.5    12.3    -6.2%   11.2    2.2%
Operating Revenues (US$ mm)   708.2    672.4    5.3%   645.1    9.8%
Operating Profit (US$ mm)   132.9    77.8    70.9%   82.6    60.9%
Operating Margin   18.8%   11.6%   7.2 p.p.    12.8%   6.0 p.p. 
Net Profit (US$ mm)   104.0    57.6    80.6%   50.9    104.4%
EPS - Basic and Diluted (US$)   2.45    1.36    80.5%   1.20    104.4%
# of Shares - Basic and Diluted ('000)   42,487    42,469    0.0%   42,478    0.0%

*Restated for the retrospective adoption of IFRS16.



·Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
·The Company is taking into account the six grounded Boeing MAX9 aircraft currently in its fleet in the calculation of all its financial and operating statistics.








Despite the operational and financial impact of the grounding of its Boeing MAX fleet, Copa Holdings delivered a great quarter, with strong financial results and outstanding operational metrics. Higher load factors and yields resulted in a significant unit revenue increase, which generated a 18.8% operating margin for the quarter, a 7.2 percentage point increase over 3Q18. In terms of operational results, the Company delivered a 92% on-time performance and 99.8% completion factor, placing it again among the best in the industry.


The Company´s consolidated operating revenue increased 5.3% to US$708.2 million during the quarter, despite a 3.7% decrease in capacity compared to 3Q18.


Load factor came in at 85.6%, or 1.4 percentage points above 3Q18. Yields improved 7.9% to 12.5 cents. As a result, passenger revenues per ASM (PRASM) increased 9.7% to 10.7 cents in 3Q19.


Total operating expenses for 3Q19 decreased 3.2% to US$575.3 million, while operating expenses per ASM (CASM) increased 0.5% to 9.0 cents. Excluding fuel costs, CASM increased 5.5% to 6.2 cents, mainly due to the capacity reduction resulting from the grounding of the Boeing MAX fleet.


Aircraft fuel expense decreased by 12.6%, or US$25.5 million, compared to 3Q18 due to lower jet fuel prices and fewer gallons consumed given the lower capacity. The Company’s effective jet fuel price decreased 10.2%, from an average of US$2.40 per gallon in 3Q18 to an average of US$2.16 per gallon in 3Q19.


The Company recorded non-operating expense of US$16.6 million for 3Q19 compared to non-operating expense of US$8.9 million in 3Q18. The non-operating expense in 3Q19 was mostly comprised of a net interest expense of US$6.6 million and a US$9.6 million translation loss due to foreign currency fluctuations, primarily resulting from the significant devaluation of the Argentine Peso.


Copa Holdings closed the quarter with US$ 885.5 million in cash, short-term and long-term investments, representing approximately 33% of last twelve months´ revenues.


Total debt at the end of 3Q19 amounted to US$1.10 billion compared to US$1.29 billion at the end of 2018, all of which is related to aircraft financing. At the end of the quarter, the Company’s lease liability-adjusted net debt to EBITDA ratio was 0.8 times.


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 of the Americas® based in Panama’s advantageous geographic position, with the region’s lowest unit costs, best on-time performance, and a strong 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, while continuing to reduce unit costs.








For 2019, the Company updates its guidance as follows: Given the Boeing MAX grounding, consolidated capacity is now expected to decrease approximately 3% year over year. Operating margin is expected to come in at approximately 16%.


Financial Outlook   2019
Capacity - YOY ASMs     -3 %     7.9 %
Operating Margin     ~16 %      13.0 %


*Restated for the retrospective adoption of IFRS16.                


Factored into the above-mentioned outlook is a load factor of approximately 85%, unit revenues (RASM) of 10.7 cents, Unit Costs excluding Fuel (CASM Excl. Fuel) of 6.3 cents and an effective average price per gallon of jet fuel, including into-plane costs, of US$2.15.




As always, we remind you that at this point our visibility into the next year is very limited. Additionally, our capacity growth, unit cost, and unit revenue assumptions are highly sensitive to the timing of the lifting of the Boeing MAX fleet grounding, which remains subject to substantial uncertainty.


Financial Outlook   2020
Preliminary Guidance
Capacity - YOY ASM Growth   ~5%
Operating Margin   16-18%


The estimated average effective price per gallon of jet fuel for 2020, including into-plane costs, is US$2.10 per gallon.


The Company’s guidance makes certain assumptions regarding the impact of the grounding of the Boeing MAX fleet, including an assumed return to service date in mid-February. Any changes in these assumptions could influence the guidance for the year.




Operating revenue


Consolidated revenue for 3Q19 totaled US$708.2 million, a 5.3% or US$35.8 million increase from operating revenue of US$672.4 million in 3Q18.


Passenger revenue totaled US$685.3 million, an increase of 5.6% from passenger revenue of US$649.1 million in 3Q18. A 1.4 percentage point increase in load factor and a 7.9% increase in passenger yield resulted in a 9.7% increase in PRASM.


Cargo and mail revenue totaled US$14.6 million in 3Q19, less than the US$15.9 million totaled in 3Q18 due to lower capacity.






Other operating revenue totaled US$8.2 million in 3Q19, a 11.5% increase over other operating revenue of US$7.4 million in 3Q18 mostly due to higher non-air frequent flyer program revenues.


Operating expenses


For 3Q19, operating expenses decreased 3.2% to US$575.3 million, representing operating cost per available seat mile (CASM) of 9.0 cents. Operating cost per available seat mile, excluding fuel costs (CASM Excl. Fuel), increased 5.5% to 6.2 cents in 3Q19, mostly due to the Boeing MAX fleet grounding.


Fuel totaled US$177.6 million, a US$25.5 million, or 12.6%, decrease over aircraft fuel expense of US$203.1 million in 3Q18. This decrease was a result of 2.7% fewer gallons consumed due to the Boeing MAX fleet grounding, and a 10.2% lower average price per gallon of jet fuel (all-in), which averaged US$2.16 in 3Q19, compared to US$2.40 in 3Q18.


Wages, salaries, benefits and other employees' expenses totaled US$113.4 million, a 3.3% increase over salaries and benefits of US$109.8 million in 3Q18, due to an increase in operational staff for planned growth and higher variable compensation provisions.


Passenger servicing expenses totaled US$26.2 million, a 1.1% decrease over passenger servicing of US$26.5 million in 3Q18. This decrease resulted primarily from a decrease in the average length of haul.


Airport facilities and handling charges totaled US$47.0 million, a 0.8% decrease over US$47.4 million in 3Q18. This was primarily a result of a decrease in the number of departures.


Sales and distribution expenses totaled US$53.0 million, a 2.2% increase from an expense of US$51.8 million in 3Q18, resulting from an increase in net bookings.


Maintenance, material and repairs totaled US$30.6 million, a 24.4% increase from maintenance, material and repairs of US$24.6 million in 3Q18. This was a result of changes in supplemental rent provisions related to aircraft utilization in 3Q18, as well as landing gear and APU maintenance events performed during the quarter, which are fully expensed as incurred.


Depreciation and amortization totaled US$72.9 million in 3Q19, a 2.4% increase from depreciation and amortization of US$71.1 million in 3Q18 due to aircraft deliveries in 4Q19, and 1Q19.


Flight operation expenses decreased 3.1%, from US$27.4 million in 3Q18 to US$26.6 million in 3Q19, mostly due to less block hours.


Other operating and administrative expenses totaled US$28.0 million in 3Q19, a decrease of 14.4% from 3Q18, mainly due to lower overhead expenses.


Non-operating Income (Expense)


Consolidated non-operating income (expense) resulted in a net expense of US$16.6 million in 3Q19, compared to a net expense of US$8.9 million in 3Q18.


Finance cost totaled US$12.7 million in 3Q19, flat when compared to 3Q18.


Finance income totaled US$6.1 million, flat when compared to 3Q18.






Gain (loss) on foreign currency fluctuations totaled a US$9.6 million loss, compared to a US$2.4 million loss in 3Q18. This translational loss was mainly driven by depreciation in the Argentinian and Brazilian currencies.


Other non-operating (income) expense resulted in a net expense of US$0.4 million in 3Q19.


Income Tax Expense totaled US$12.3 million for the quarter, US$1.0 million higher than in 3Q18. For the full year 2019 the Company expects its effective tax rate to be approximately 13%.


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 80 destinations in 33 countries in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, consisting of 102 aircraft: 6 Boeing 737 MAX9s, 82 Boeing 737NG aircraft and 14 EMBRAER-190s. For more information visit:


CONTACT: Copa Holdings S.A.

Investor Relations:

Ph: 011 507 304-2774


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     %  
    3Q19     3Q18*     Change     2Q19     Change  
Operating Revenues                                        
Passenger revenue     685,337       649,110       5.6 %     620,538       10.4 %
Cargo and mail revenue     14,647       15,919       -8.0 %     16,464       -11.0 %
Other operating revenue     8,226       7,375       11.5 %     8,100       1.6 %
Total Operating Revenue     708,210       672,405       5.3 %     645,102       9.8 %
Operating Expenses                                        
Fuel     177,603       203,121       -12.6 %     177,169       0.2 %
Wages, salaries, benefits and other employees' expenses     113,398       109,814       3.3 %     108,342       4.7 %
Passenger servicing     26,204       26,487       -1.1 %     25,530       2.6 %
Airport facilities and handling charges     47,022       47,415       -0.8 %     44,698       5.2 %
Sales and distribution     52,980       51,832       2.2 %     51,289       3.3 %
Maintenance, materials and repairs     30,632       24,626       24.4 %     31,235       -1.9 %
Depreciation and amortization     72,876       71,149       2.4 %     70,549       3.3 %
Flight operations     26,572       27,434       -3.1 %     25,450       4.4 %
Other operating and administrative expenses     28,047       32,762       -14.4 %     28,240       -0.7 %
Total Operating Expense     575,334       594,640       -3.2 %     562,502       2.3 %
Operating Profit     132,876       77,765       70.9 %     82,601       60.9 %
Non-operating Income (Expense):                                        
Finance cost     (12,696 )     (12,718 )     -0.2 %     (13,573 )     -6.5 %
Finance income     6,121       6,228       -1.7 %     6,041       1.3 %
Gain (loss) on foreign currency fluctuations     (9,641 )     (2,446 )     n/m       (2,213 )     n/m  
Other non-operating income (expense)     (350 )     40       n/m       (2,115 )     -83.4 %
Total Non-Operating Income/(Expense)     (16,567 )     (8,897 )     86.2 %     (11,859 )     39.7 %
Profit before taxes     116,309       68,868       68.9 %     70,742       64.4 %
Income tax expense     12,332       11,298       9.2 %     19,876       -38.0 %
Net Profit     103,978       57,570       80.6 %     50,866       104.4 %
EPS - Basic and Diluted     2.45       1.36       80.5 %     1.20       104.4 %
Shares - Basic and Diluted     42,487,355       42,469,122       0.0 %     42,478,415       0.0 %


* Restated for retrospective adoption of IFRS 16






Copa Holdings, S. A. and subsidiaries

Consolidated statement of financial position

(US$ Thousands)


   September 30   December 31 
   2019   2018 
   (Unaudited)    (Restated) * 
Current Assets          
Cash and cash equivalents   225,289    156,158 
Short-term investments   536,084    566,200 
Total cash, cash equivalents and short-term investments   761,374    722,359 
Accounts receivable, net   138,249    115,831 
Accounts receivable from related parties   2,850    223 
Expendable parts and supplies, net   93,081    86,530 
Prepaid expenses   53,430    74,384 
Prepaid income tax   916    10,357 
Other current assets   19,156    54,387 
TOTAL CURRENT ASSETS   1,069,057    1,064,071 
Long-term investments   124,169    138,846 
Long-term accounts receivable   1,942    1,177 
Long-term prepaid expenses   16,551    25,637 
Property and equipment, net   2,738,111    2,701,322 
Right of use assets   317,423    361,993 
Intangible, net   108,474    101,168 
Net pension asset   6,145    5,091 
Deferred tax assets   17,617    16,041 
Other Non-Current Assets   17,422    33,899 
TOTAL NON-CURRENT ASSETS   3,347,855    3,385,174 
TOTAL ASSETS   4,416,912    4,449,245 
Current maturities of long-term debt   135,982    311,965 
Current portion of lease liability   99,838    102,452 
Accounts payable   101,108    129,851 
Accounts payable to related parties   14,002    14,674 
Air traffic liability   504,921    471,676 
Frequent flyer deferred revenue   78,021    67,814 
Taxes and interest payable   45,278    44,749 
Employee benefits obligations   44,454    42,890 
Income tax payable   4,683    - 
Other Current Liabilities   203    604 
TOTAL CURRENT LIABILITIES   1,028,490    1,186,674 
Long-term debt   965,500    975,283 
Lease Liability   231,079    273,231 
Other long - term liabilities   178,920    161,571 
Deferred tax Liabilities   44,761    48,940 
TOTAL NON-CURRENT LIABILITIES   1,420,260    1,459,025 
TOTAL LIABILITIES   2,448,750    2,645,700 
Issued Capital          
Class A -33,825,130 issued and 31,328,697  outstanding   21,139    21,087 
Class B common stock - 10,938,125   7,466    7,466 
Additional Paid-In Capital   84,338    80,041 
Treasury Stock   (136,388)   (136,388)
Retained Earnings   1,752,710    1,835,566 
Net profit   244,275    - 
Other comprehensive loss   (5,378)   (4,227)
TOTAL EQUITY   1,968,162    1,803,545 
TOTAL EQUITY LIABILITIES   4,416,912    4,449,245 


* Restated for the retrospective adoption of IFRS 16.






Consolidated Statement of Cash Flows

For the nine months ended September 30,

(In US$ thousands) 


    2019     2018     2017  
    (Unaudited)     (Unaudited)     (Unaudited)  
Cash flow from operating activities     548,947       377,941       603,995  
Cash flow used in investing activities     (32,863 )     (129,541 )     (344,088 )
Cash flow used in financing activities     (446,953 )     (316,461 )     (342,001 )
Net increase (decrease) in cash and cash equivalents     69,131       (68,061 )     (82,094 )
Cash and cash equivalents at January 1     156,158       238,792       331,687  
Cash and cash equivalents at September 30   $ 225,289     $ 170,731     $ 249,593  
Short-term investments     536,084       579,246       565,994  
Long-term investments     124,169       165,865       155,953  
Total cash and cash equivalents and investments at September 30   $ 885,542     $ 915,842     $ 971,540  





Copa Holdings, S.A.




This press release includes the following non IFRS financial measures: Operating CASM Excluding Fuel. 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. The following is a reconciliation of these non-IFRS financial measures to the comparable IFRS measures:


Reconciliation of Operating Costs per ASM            
Excluding Fuel (CASM Excl. Fuel)  3Q19   3Q18*   2Q19 
Operating Costs per ASM as Reported (in US$ Cents)   9.0    9.0    9.1 
Aircraft fuel per ASM  (in US$ Cents)   (2.8)   (3.1)   (2.9)
Operating Costs per ASM excluding fuel  (in US$ Cents)   6.2    5.9    6.2 


*  Restated for retrospective adoption of IFRS 16