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DATE
Thursday, Aug. 6, 2026 at 11 a.m. ET
CALL PARTICIPANTS
- Director of Investor Relations – Daniel Tapia
- Executive Chairman and Chief Executive Officer – Pedro Heilbron
- Executive Vice President – Robert Carey
- Chief Financial Officer – Peter Donkersloot Ponce
TAKEAWAYS
- Operating Profit — $91.7 million, representing an operating margin of 8.7%, which decreased 13.1 percentage points year over year due to significantly higher fuel expenses.
- Net Profit — $68.2 million, or $1.67 per share, reflecting a 53.9% year-over-year decrease in earnings per share.
- Total Operating Revenue — $1.1 billion, increasing 25.7% year over year driven by higher capacity and unit revenues.
- Passenger Revenue — $1.0 billion, a 25.8% increase compared to the prior year resulting from 15.7% growth in revenue passenger miles and higher yields.
- Passenger Yield — 12.6 cents, increasing 8.7% year over year as management implemented fare increases to recover rising fuel costs.
- Revenue Per Available Seat Mile (RASM) — 11.6 cents, an 7.9% increase year over year, though partially offset by a 0.1-cent impact from shifting travel patterns during the World Cup.
- Capacity (ASMs) — 9.15 billion, increasing 16.5% year over year as the company received more aircraft and improved utilization.
- Load Factor — 86.7%, compared to 87.3% in the prior-year period, reflecting modest pressure from the World Cup event in June.
- Cost Per Available Seat Mile (Ex-Fuel CASM) — 5.7 cents, remaining flat year over year and reflecting continued focus on cost discipline.
- Total CASM — 10.6 cents, a 26.0% increase year over year driven primarily by the higher cost of jet fuel.
- All-in Jet Fuel Price — $4.28 per gallon, representing an 84.8% increase compared to the second quarter of 2025.
- Fuel Recovery — 40%, representing the portion of the year-over-year fuel expense increase recovered through higher yields and demand.
- Cash and Investments — $1.5 billion, representing 39% of the last 12-month revenues and supporting a net debt-to-EBITDA ratio of 0.9x.
- Total Debt — Approximately $2.7 billion, entirely related to aircraft financing with an average cost of debt of 3.7%.
- Fleet Count — 131 aircraft, including four Boeing 737 MAX 8 deliveries received during the quarter.
- Operational Reliability — 90.6% on-time performance and a 99.8% flight completion factor during the second quarter.
- Updated Full-Year Operating Margin Guidance — 17% to 19%, based on current fuel projections and sustained demand across the network.
- Updated Full-Year Capacity Guidance — 14% to 15% ASM growth, an increase from previous estimates due to faster aircraft deliveries and higher utilization.
- Full-Year Fuel Price Assumption — $3.60 per gallon, factoring in elevated and volatile market levels relative to 2025.
- Quarterly Dividend — $1.71 per share, ratified by the board to be paid on Sept. 15 to shareholders of record as of Aug. 31.
- Capital Expenditures (CapEx) — $700 million to $750 million for the full year, adjusted down by $50 million due to the shift of one aircraft delivery from December to January.
- Cargo and Mail Revenue — $34.2 million, a 20.8% increase reflecting the full-year effect of operating a second freighter aircraft.
- Share Repurchases — $45 million executed year to date, with approximately $60 million remaining under the current authorization.
- Third-Quarter Bookings — 75% booked as of the call date, with management reporting sustained demand trends across all regions.
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RISKS
- Heilbron stated, “Our results were affected by an increase of 85 percent in the all in fuel cost, compared to Q2 25,” noting that approximately 40% of quarterly bookings were already sold before the price surge, limiting immediate recovery.
- Carey noted that the World Cup “temporarily affected travel patterns during June,” resulting in a June load factor that was 2.3 percentage points lower year over year.
SUMMARY
Management reported that Copa Holdings, S.A. (CPA +1.01%) maintained profitability in the second quarter despite significant volatility in jet fuel prices. The company is executing a strategic expansion of its Hub of the Americas, transitioning from six to eight connecting banks to improve aircraft utilization and passenger connectivity. Financial performance was supported by capacity growth and higher yields, though results were partially impacted by seasonal travel shifts related to the World Cup. The company maintains a liquid balance sheet and is proceeding with fleet modernization and the rollout of high-speed onboard connectivity to enhance the passenger experience.
- Executive Vice President Carey reported that July traffic results showed a load factor of “nearly 90 percent on a year over year capacity increase of 16 percent,” indicating demand remained strong following the World Cup impact.
- The company will transition its Panama City hub from six to eight connecting banks in March 2027, a decision Heilbron stated will “increase aircraft utilization, optimize the use of airport infrastructure, and further strengthen Panama’s position as the leading hub.”
- Copa Airlines became the first carrier in Latin America to offer Starlink high-speed internet, with first flights operating in July and full fleet installation expected by the first half of 2027.
- Management identified Brazil and North America as showing marginally stronger demand trends, though Heilbron noted that “every market is very healthy” across the entire network.
- The company maintains fleet flexibility for 2028 and beyond, with over 40 unencumbered aircraft and multiple lease expirations that allow for growth adjustments based on market conditions.
- For the second half of 2026, Carey indicated the company is seeing a “plus 10 percent on RASM” trend that is expected to remain consistent across the third and fourth quarters.
INDUSTRY GLOSSARY
- Available Seat Miles (ASMs): A measure of an airline’s carrying capacity, calculated by multiplying the number of seats available for passengers by the number of miles those seats are flown.
- Revenue Per Available Seat Mile (RASM): A metric used to measure an airline’s efficiency, calculated by dividing operating revenue by available seat miles.
- Cost Per Available Seat Mile (CASM): A common unit of cost in the airline industry, representing the cost to fly one seat one mile.
- Load Factor: A measure of the percentage of available seating capacity that is filled with passengers.
- Yield: The average amount of revenue earned per passenger per mile flown.
- Revenue Passenger Miles (RPMs): A measure of the volume of passenger traffic, calculated by multiplying the number of revenue-paying passengers by the miles they traveled.
- Connecting Bank: A scheduling system at a hub airport where a group of flights arrive and depart within a coordinated window to maximize passenger transfer options.
- Hub of the Americas: The company’s primary flight operations center located at Tocumen International Airport in Panama City.
- NDC (New Distribution Capability): A travel industry-supported program for the development and market adoption of a new, XML-based data transmission standard.
Full Conference Call Transcript
Operator: Ladies and gentlemen, thank you for standing by. Welcome to Copa Holdings Second Quarter Earnings Call. During the presentation, all participants will be in listen only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, you will have to press *11 on your touch tone phone. As a reminder, this call is being webcast and recorded on 08/06/2026. Now I will turn the conference call over to Daniel Tapia, Director of Investor Relations. Sir, you may begin.
Daniel Tapia: Thank you, Alia, and welcome everyone to our second quarter earnings call. Joining me today are Mr. Pedro Heilbron, executive chairman and CEO of Copa Holdings, Mr. Robert Carey, executive vice president and Peter Donkersloot Ponce, our CFO. Pedro will begin with an overview of the core of the quarter, Robert will then discuss commercial performance and operational highlights. Peter will conclude with a review of our financial results and outlook. Immediately after, we will open the call for questions from analysts. As a reminder, Copa, Holdings financial reports have been prepared in accordance with International Financial Reporting Standards. In today’s call, we will discuss certain non IFRS financial measures.
A reconciliation of these measures to comparable IFRS measures can be found in our earnings release. Is available on our website. Our discussion today will also contain forward looking statements. Not limited to historical facts that reflect the company’s current beliefs, expectations, and or intentions regarding future events and results. These forward looking statements involve risks and uncertainties that could cause actual results to differ materially are based on assumptions subject to change. Many of these are discussed in our annual report filed with the SEC. Now I will turn I would like to turn the call over to our Chairman and CEO, Mr. Pedro Heilbron.
Pedro Heilbron: Thank you, Daniel. Good morning, and thank you all for joining us for our second quarter earnings call. Before we begin, I would like to recognize and thank our more than 9 thousand coworkers. Thanks for their commitment, professionalism, and disciplined execution, our team continued to deliver strong financial results while maintaining exceptional operational reliability and outstanding service to our passengers. They are the foundation of Copa’s success and have my admiration and appreciation. Our second quarter results demonstrate the resilience of our business model in a significantly higher fuel price environment. And reinforce our ability to continue generating profitable growth through different market cycles.
During the quarter, we delivered an operating profit of $91.7 million and an operating margin of 8.7 percent. These results were affected by an increase of 85 percent in the all in fuel cost, compared to Q2 25. With approximately 40 percent of our bookings sold before the TRIO cost increase. In the quarter, we grew capacity 16.5 percent measured in ASMs, while maintaining solid load factors. Our capacity additions in 2026 after years which aircraft delivery delays slowed our growth, allow us to further consolidate our Hub of The Americas advantage especially in an environment of strong passenger demand across our network. Looking ahead, booking trends remain strong.
Which support our expectations for another year of high load factors and solid financial performance. As part of our continuous efforts to strengthen the Hub of the Americas, we recently set in place our transition from 6 to 8 connecting banks beginning in March 2027. This decision will improve connectivity throughout our network provide greater travel options for our passengers, increase aircraft utilization, optimize the use of airport infrastructure, and further strengthen Panama’s position as the leading hub for intra America’s travel.
Combined with our structurally low unit cost, best in class operational reliability, strong balance sheet, and the unique advantages of our Hub of the Americas, we remain confident in our ability to successfully execute our growth plans and continue delivering value to our shareholders. With that, I will turn the call over to Robert who will discuss the quarter’s commercial and operational highlights.
Robert Carey: Thank you, Pedro, and good morning, everyone. Before I start, I would also like to thank our coworkers across the organization for their continued dedication and outstanding execution throughout the quarter. I have now been here 2 years and Copa’s culture is clearly 1 of our strengths. Let me begin by reviewing some of the quarter’s key commercial and operational highlights. Operating revenues increased 25.7 percent year over year to $1.1 billion Passenger yields increased 8.7 percent compared to Q2 25. Unit revenue or RASM increased 7.9 percent to 11.6 cents while capacity measured in ASMs increased 16.5 percent year over year. Load factor was 86.7 percent. Compared to 87.3 percent in Q2 25.
Revenue performance for the quarter was partially impacted by the World Cup. Which temporarily affected travel patterns during June. As a result, June load factors were 2.3 percentage points lower year over year. Putting modest pressure on unit revenues. We estimate that the World Cup reduced second quarter RASM by approximately 0.1 cents. Despite this headwind, we delivered another quarter of solid revenue performance and continue to see strong demand trends throughout our network going forward. Demonstrating this strong demand we published our July traffic numbers this week, reporting a load factor of nearly 90 percent on a year over year capacity increase of 16 percent.
Furthermore, this load factor 1 of our highest ever came in a higher yield environment. As you can see from our full year guidance, we are expecting these strong load factors to continue. On the operational side, we delivered industry leading results. During the quarter, Copa Airlines delivered an on time performance of 90.6 percent. And a flight completion factor of 99.8 percent. These results position Copa Airlines among the very best airlines globally, for operational reliability and represent a key differentiator of our passenger value proposition. Turning to the network. Recently, we announced the addition of Porlamar, in Isla Margarita, Venezuela. A popular leisure destination which will start in November.
With this addition, Copa will serve 88 destinations in 32 countries throughout The Americas. Further strengthening the breadth and convenience of our network and reinforcing the leadership position of our Hub of the Americas. We also recently achieved an important milestone in enhancing our passenger experience with the launch of Starlink onboard Internet. In July, Copa operated its first Starlink equipped flight. Becoming the first airline in Latin America. To offer high speed Starlink connectivity. We expect the rollout of StarLink Wi Fi across our fleet to be completed in the first half of 27. Finally, on the fleet side, we took delivery of 4 Boeing 37 MAX 8 aircraft during the quarter.
Ending the period with a fleet of 131 aircraft. For the remainder of the year, we expect to receive 1 additional 37. As always, we maintain significant flexibility in our fleet plan. Through delivery options, flight rights, lease expirations, and a substantial base of unencumbered aircraft. Which allows us to adjust the pace of growth if market conditions warrant. To conclude, demand trends and booking patterns remain strong. With that, I will turn the call over to Peter, who will review our results and outlook in more detail.
Peter Donkersloot Ponce: Thank you, Robert, and good morning. I will also like to start by recognizing our team’s continued dedication delivering industry leading results. Their commitment remains essential to our strong operational and financial performance. In the second quarter, we reported an operating profit of $91.7 million resulting in an operating margin of 8.7 percent. Compared to 21.7 percent in the second quarter of 25. Net profit totaled $68.2 million or $1.67 per share. And a net margin of 6.4 percent. Unit cost, excluding fuel or ex-fuel CASM, remained flat. Year over year. To 5.7 cents. Reflecting our continuous focus on cost discipline. Including fuel CASM increased 26 percent to 10.6 cents. A result of significantly higher fuel prices.
During the quarter, average all in jet fuel price increased 85 percent year over year. From $2.32 to $4.28 per gallon. Despite having approximately 40 percent of our second quarter bookings already sold before the increase in fuel prices, strong demand higher yields enable us to recover approximately 40 percent of the year over year increase in fuel expenses during the quarter. Our fuel recovery calculation compares the year over year increase in revenues attributable to higher RASM with a year over year increase in fuel expenses resulting from higher all in fuel prices. Both calculated using 2026 capacity levels. Turning to our balance sheet and liquidity.
We ended the quarter with approximately $1.5 billion in cash short term and long term investments. Representing 39 percent of last 12 months revenue. Our balance sheet remains among the strongest in the airline industry and continues to be a key competitive advantage. Total debt, including lease liabilities, stood at approximately 2.7 billion at quarter end. All of it related to aircraft financing. Our average cost of debt is currently 3.7 percent and we ended the quarter with a net debt-to-EBITDA ratio of 0.9x. Our financial strength continues to provide substantial flexibility as we continue to execute our long term strategy. Turning now to shareholder returns.
I am pleased to announce our Board of Directors ratified the company’s third quarterly dividend payment of $1.71 per share The dividend will be paid on September 15 to all shareholders of record as of August 31. Looking ahead, while fuel prices remain elevated and volatile relative to prior year levels, Underlying demand trends across our network continue to be strong. Based on these demand strengths, and current fuel cost projections, we are updating our full year outlook and now expect an operating margin for 2026 to be in the range of 17 to 19 percent. With a capacity growth of between 14 to 15 percent.
This outlook assumes approximately a load factor of 87 percent a RASM of 12 cents, ex-fuel CASM of 5.7 cents, and an all in fuel price per gallon of $3.60. To summarize, demand and revenue trends remain strong across our network. We are maintaining industry leading cost discipline Our balance sheet remains among the strongest in the industry. And our proven business model continues to position us well to navigate the current fuel environment while delivering profitable growth and long term shareholder value. Thank you, and we will now open the call for questions from the analysts.
Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q and A roster. Our first question comes from the line of Savanthi Syth from Raymond James. Your line is now open.
Savanthi Syth: Hey. Good morning.
Pedro Heilbron: Good morning.
Savanthi Syth: I was kind of curious. I think, Pedro, I think you mentioned or that the third the second quarter was 40 percent booked. Heading into prior to all the kind of fare increases. I was curious how much of the third quarter was booked prior to the fare increases? And as you kind of look out, how much of the third and the fourth quarter are in the books today?
Pedro Heilbron: Okay. So in Q3, was pre war, of course. We had about 20%, a little bit below 20% booked for Q3. And, of course, much less for Q4. Almost nothing for Q4. And today? Adria, how much is the [Inaudible]
Robert Carey: And then, Savi, your question was what is the outlook right now for Q3 or what is the booking level for Q3 and Q4?
Savanthi Syth: Correct? that is correct.
Robert Carey: Yeah. Yeah. Right now, we are about 75% booked for Q3. And about 25% sold for Q4.
Savanthi Syth: Perfect. And if I might, just curious. I saw that it is kind of slight changes in the delivery schedule here, for 26, 27. Any early thoughts on how you are thinking about deliveries in 2028 as I am guessing some of those discussions are happening now?
Pedro Heilbron: Yeah. We publish up to 2027. If I am not mistaken, and we are getting 12 aircraft in 2027. And as always, we have some flexibility. We are going to let go 7 hundred. That come up for their 20 year checks. So we will not do those 20 year checks. We will let 7 hundreds go. So net will be 10 aircraft. Joining Copa Holdings in 2027. We still have another 7 hundreds, which we can let go. We can park at any time. We can harvest the engine. So we also have that flexibility. But we are expecting a strong 2027. Of course, we are not guiding to 2027 yet. But we are very comfortable with the aircraft.
We are we are having delivered next year, and we think we need them all. For 2028, the number again, we have not shared yet. It will be higher because it is like almost the end of the road for all the Boeing delays delivery delays that we had in the last 4 years. And However, we also have a number of lease expirations. We have 6 lease expirations plus the 7 hundred. So we have, like, 11 aircraft that we could let go easily. In 2028 depending on demand. And plus we have our unencumbered aircraft, which is over 40. So we have lots of flexibility.
Again, we think we are going to need most of our 2028 deliveries We will share that information towards the end of the year. But we have lots of flexibility. I appreciate that preliminary color. Thanks, Fred.
Operator: Thank you. Our next question comes from the line of Duane Pfennigwerth of Evercore ISI. Your line is now open.
Duane Pfennigwerth: Hey. Thank you. As you think about the full year unit revenue guidance up 7 percent-ish on 15 percent capacity growth, so low 20s revenue growth. Just wondering if you can give some color on the balance of the back half, which do you expect a big variation between third quarter unit revenue growth and the fourth quarter? Or is your expectation that they would look pretty similar at this point?
Pedro Heilbron: I will let Robert answer that question. But I will say that I think the number 1 thing that is very important is that we are seeing strong demand right now. And so that makes us very comfortable with our projections, of course, that as of today. And but I will let Robert share some of the specifics.
Robert Carey: Yeah. Morning, Dwayne. At this point, we are seeing, plus 10 percent on RASM in h 2. I would say it is fairly consistent across Q3, Q4. In terms of year over year variation, it is broadly somewhere between the 2. So I think nothing really of note in either quarter. That varies.
Duane Pfennigwerth: Great. Thank you. that is very clear. And then just on the trajectory of a non op net interest expense, anything to call out in that trajectory into the back half of the year? And thanks for taking the questions.
Peter Donkersloot Ponce: Hello, Duane. How are you? This is Peter. I would say that it is pretty stable that net interest expense that we are going to see across the across the year, nothing to highlight and as we receive more aircraft we have little bit more financing cost, but it is a embedded in our seed plan and pretty much straightforward. To calculate it. Okay. Thank you.
Operator: Thank you. Our next question comes from the line of Guilherme Mendes of JPMorgan. Your line is now open.
Guilherme Mendes: Yes. Thank you. Good morning, all Pedro, Peter. Robert, and Daniel. Thanks for taking my question. I have 2. The first is on the capacity guidance. So the upward revision, that we saw this quarter, if you can share some details on what is behind it, it is just a matter of receiving more aircraft earlier than expected or anything else in terms of utilization maybe. And the second point is on the Starlink announcement. If you do not mind sharing some additional details on what is the expected CapEx or costs associated with implementing the StarLink and if you intend to charge for it, if it will be somehow a loyalty lever. Thank you.
Pedro Heilbron: Yes. Thank you, Guilherme. In terms of the increased ASM guidance, as I heard correctly. I would say a few things. 1, that we were conservative or careful with our original guidance not being 100 percent sure on the Boeing delivery dates. As the year has gone through, not only is Boeing delivering on time, but actually at least 1 aircraft, we got ahead– 1 aircraft we got ahead by a month. Another a few other aircraft came in a few weeks before. And so we have been able to deploy those aircraft much faster during the year. Plus, we have increased utilization. So we are also getting additional aircraft hours and ASM through utilization.
So the combination of those factors allow us to increase our capacity guidance. And of course, the demand is there. We have strong demand. So we are really happy to be able to guide to higher ASM capacity. In terms of StarLink, I will let Robert complement the answer. But the CapEx was done many months ago. Already in the books and in the guidance. it is there. And, I do not know if you wanna share something else, Robert.
Robert Carey: Yeah. On the business model, first, I mean, we are excited to be the first airline in Latin America to be offering this. The business model complementary access is gonna be there for business class passengers, all of our preferred member gold platinum, and presidential members, as well as Starlink subscribers. And then other passengers are gonna pay for the service. that is the business model we set up.
Pedro Heilbron: Yeah. And on the CapEx, I will just add that it was prepaid as Pedro said. And would just start depreciating from depreciation once the service is installed. For the cash purposes, it is already sitting on our PP&E.
Guilherme Mendes: Amazing. Super clear. Thank you all.
Operator: Thank you. Thank you. Our next question comes from the line of Filipe Ferreira Nielsen of Citi. Your line is now open.
Filipe Ferreira Nielsen: Hey. Hello, everyone. Thanks for taking my question. So I have 1 follow-up regarding the delivery schedule, and this is related to CapEx. Just wondering how this, changes your view on CapEx for the year. How are you expecting CapEx to behave considering that you are receiving aircraft earlier? And, my second question is related to the fuel and competitive behavior. Like just wanted to hear a little bit about how this competition behaving to the fuel drops you are guiding to lower fuel in the back half of the year. And everybody else is also guiding for that. Just wondering how pricing and competition is behaving in this environment. Thank you.
Peter Donkersloot Ponce: Hello, Filipe. How are you? This is Peter. I will address your first question regarding CapEx. And, yeah, we are seeing CapEx right now between $700 and $750. So basically, $50 million less than what we guided at the beginning of the year, and this is basically most of it is because there was we are expecting now 1 less delivery that moved a couple weeks from December to January. Basically, that is what is guiding that difference. And then I will let Robert talk about and Pedro talk about the competition.
Pedro Heilbron: Part. Yeah. So I do not wanna, of course, talk much about pricing and competition. it is a delicate subject. But so far, what we see is a lot of discipline. Triggered by the fuel prices, of course. As fuel prices, come down, we will see what happens. We are comfortable with our guidance. And I must say, I think it is important to mention that pre-war, pre the high fuel prices, average fares, at least in our region and network, were actually below Average yields were below 2019. And that is without taking into consideration inflation. So we are comfortable that the yields can be sustained as oil comes down.
If not at a 100 percent, but enough for a positive effect going forward. I do not know if you guys yeah. No. I think you covered it.
Filipe Ferreira Nielsen: Great. This is very clear. Thank you.
Operator: Thank you. Our next question comes from the line of Rogério Araújo of Bank of America. Your line is now open.
Rogério Araújo: Hi. Thank you very much. I have a question on the second-quarter guidance. You said the margin guidance at 8 percent to 12%. My question is, what were the main uncertainties embedded in that range? And how did those factors ultimately play out such that results landed within the guidance but toward the lower end? If you could explore what was the drivers behind the guidance and what has happened during the quarter. Thank you so much.
Pedro Heilbron: You are talking about the RASM guidance. Right? Actually, the EBIT margin guidance for the second quarter. Okay. EBIT. Yeah. So we ended up we had guided for an 8% to 12% range, given the uncertainty related to the war, to fuel prices, and even to how demand was gonna respond to higher prices. So we gave a wider range than what we usually give. We ended up within that range. On the lower side of it. Mostly due to RASM that is our unit costs were within– actually, we were at target.
Robert Carey: A 100 percent in target. So was mostly coming from RASM. Fuel was also pretty much in the range we said which was between 80, 90 percent year over year. So the difference was RASM.
Pedro Heilbron: I will let Robert add to it, but I will say that it was kind of very early,, maybe mid quarter when we spoke. And that is where it ended up. I mean, I do not think the there is a lot of magic to it. it is just what happened. Robert, I do not know if you wanna add to that.
Robert Carey: Yeah. I think you covered most of it, Pedro. I mean, Morning, Rogério. The only thing I would say, you know, as we highlighted, the World Cup did impact us a bit more than expected in June. And that is the most notable factor we call out in what drove them being a bit on the lower side than we expected. And there is everything else is kind of small factors, and I think the only other thing is you know, as Pedro highlighted, we had a wide range. It was still pretty early on, and we were trying to understand everything going on with the new fuel environment. And so nothing else of note to call out.
Pedro Heilbron: Yeah. And, Rogério, I would I would also mention that, of course, we are we are guiding to very high margins for the year. Which means that we are guiding for very strong margins in the second half of the year. And especially as fuel eases. I mean fuel still quite high because of crack. Even more so than WTI and Brent. The crack spread is very high. And we are still guiding to very strong margins for the second half of the year. And for the whole year.
Rogério Araújo: that is very clear. Thank you so much.
Pedro Heilbron: Hi, operator. We are ready for our next question. I think we lost the operator. Yeah. I think the next call was coming the next question was coming for Jens? Jens, can you hear us? Oh, can you hear me now? Yeah. We can hear you now.
Michael Linenberg: Yeah. Sorry. My microphone was on mute.
Operator: Our next question comes from Michael Linenberg of Deutsche Bank. Your line is now open.
Michael Linenberg: Oh, hey. Good morning, everyone. I guess 2 here. Just the step up in the growth rate for the year, the capacity growth rate? I know Pedro, you talked– you and Robert have both pointed to the stronger, better than healthy demand. As we think about what is driving that or the sort of the elements of the increased ASMs, how much of that is just an annualization of your growth from call it over the last 6 to 12 months. As well as, maybe increased utilization or stage length And should we anticipate any additional new markets to be announced beyond Porlamar?
Pedro Heilbron: Okay. So let’s get that let’s get that information. So about 50%, half of the growth is full year effect from what was implemented last year. And then maybe a small percent, 10% would be new destinations. And the others the rest is new frequencies, traditional additional frequencies. And, yes, we expect we expect to announce at least 1 more destination for year-end. That should come probably before the end of the month, before the end of August. I think we will be announcing what would be our 89th destination. To be implemented in December. Okay. Great.
Michael Linenberg: And then just my second question, just regarding the hub for next year going from 6 to 8 connecting banks. Pedro, I can recall a time when I think it was either 1 to 2 or 2 to 3. So you have made some huge advances here with respect to the Panama City hub. The question is, where are you on where are you from a infrastructure perspective? You know, going from 6 to 8, will you have tapped out all of all of the gates? Will you have to hard stand airplanes? How should we think about just the facility and its ability to accommodate those 8 connecting banks.
You know, how much more runway does that give you before you would have to maybe sink shovels into the ground and build out the concourses. Thanks. Thanks for taking my questions.
Pedro Heilbron: Yeah. Thank you, Mike. I will let Robert answer.
Robert Carey: Hey, Mike. Good morning. So I think look– hey, good morning. I did take it from 6 to 8 banks. Quite the growth story. Look. I think in terms of facilities, this you know, obviously, this helps us in freeing up capacity. We are not at the limit yet in the sixth bank. Structure, but we were starting to near the limits of it. This obviously creates more capacity for growth over the coming years and eases need for additional infrastructure. Plus, we have the internal benefits. You know, we get better utilization. On the aircraft as well as a lot of more options for our customers, which is what is most exciting.
You know, I think in terms of the airport infrastructure then when it changes, you know, there is still a number of investment plans here at the airport over the coming you know, 5 to call it, 5-year horizon. Which will help with gates, which will help with runway capacity, etcetera, as well as just some other projects that are ongoing here. So the combination of those 2, you know, pretty similar to, I think, what we talked about back in the investor day, give us pretty good runway going forward into the next, you know, call it, 5, 10 years. To keep growing comfortably.
Michael Linenberg: Robert, to go from 6 to 8 percent, does that at all change your connection rates and or does it make it less likely that you would want to take on the max 10, which I know is gonna be certified soon? And I know that you have the ability to you know, exchange you know, orders for max eights and nines into the tens. Does that at all change that calculus?
Robert Carey: No. I mean, I think connectivity gives more options. And roughly, the connectivity for the passenger in terms of time of connection. I think, you know, there is some that go down a little, some that go up a little. So the on hold, the average stays broadly the same. In aircraft, it is– aircraft decisions, no. I think, you know, no change. And we are evaluating the different fleet types that exist in for our new order.
Pedro Heilbron: Yeah. What Mike, what the 8-bank will do and Robert mentioned most of it. I know he mentioned that utilization is gonna improve. And then they are gonna be better scheduled for passengers. Also, the airport assets are gonna be better utilized. So it is also great for the airport, which is great for all. So we see it as a as a very, very positive development.
Robert Carey: Absolutely.
Michael Linenberg: Great. But the RASM improver and a and a CASM detractor is kind of how I should think about it. Well, that is that is music for our ears. Exactly. it is like thank you.
Operator: Thank you. Our next question comes from Jens Spiess of Morgan Stanley. Your line is now open. We will move to our next question from Alberto Valerio of EBS. Oh, sorry. You here, Jens?
Jens Spiess: Yeah. Yeah. Sorry. Okay. Sorry. I was on mute. Yeah. Hi, everybody. So I only have 2 basically small modeling questions. 1 is on the buyback program, the 200 million I think you mentioned before that you had executed half of it, I think back on the envelope, we are getting to you executing around 35 million this quarter. So how much more or less do you have left? Is it around 65 million Is it correct? And secondly, on the 02/2027 deliveries, I think you were expecting to get 12 deliveries. You mentioned that 1 will be shifting from this year to next year. So are you still– are you now expecting to receive 13 aircraft?
And more or less throughout the year, how will you be receiving them? Is it more front or back loaded? Thank you.
Peter Donkersloot Ponce: Hello, Jens. How are you? This is Peter. On the buyback program, just to clarify, we have executed $45 million year to date. And we have around $60 million left. For the program to be executed. And, of course, as we always said, whenever we finish, we will we will request the authorization to have an additional program. We always like to have the program open. And then on the delivery schedule, I will tell you to have small movements.
Pedro Heilbron: As we get closer to delivery, deliveries are updated, we have movement And most of the movements we clarify are about a week. They are where delivery is expected in December, and then they move to January. It does not change the ASMs counts for at least this year does not change at all because we did not have that plane flying this year, so it does not change. And then the next year, we also have some deliveries moving from 2027 to 28, but it is also those December deliveries that are moving to January 2028. So, again, nothing material. it is just the regular update that as we get closer to the delivery dates.
I do not know if you wanna add something.
Robert Carey: The only thing the other part, Jens, is yeah. Look 12 next year are pretty evenly spaced throughout the year.
Jens Spiess: Perfect. Alright. Alright. Thank you.
Operator: Thank you. Our next question comes from Alberto Valerio of UBS. Your line is now open.
Alberto Valerio: Thank you. Good morning, gentlemen. Thanks for taking my questions. I have 1 on your side. Oil price come up. Your cost come up, like, 85 percent per gallon. You could pass through a part of it, and you look like you keep this pass-through to the remain of the year. If you could detail or give some explanation where this demand is coming from. If it is strong around your network, South America, North America, Central, or if there is any specific point? Then the other point is about what a word was used before. It looked like airlines were leaving some profitability on the table. If you can tell us how resilient this is? Thank you very much.
Pedro Heilbron: Thank you. I will start, and then I will let Robert complement my answer and maybe add some color. But we see strength throughout our network. There is not really 1 region that is that is doing much better or that is weak compared to the rest. Of course, we always we are always going to have certain markets are going to be on the on the top end. And then some that are going to be in between and maybe lower. But actually, every market is very healthy, and we are getting demand from our whole network. So that is, I would say, a very positive development which is not always the case.
And the diversity of our network is always an asset. And I guess it is a greater asset now that everything is doing well. I am now I will end it.
Robert Carey: I am not going to add to that. Yeah. Robert, but I think the only thing you know, as Pedro said, across the board, it is pretty consistent that all the markets are reacting you know, are showing positive demand signs and pretty evenly kind of the yield increases coming through. And so I think that is a very positive sign to where things stand. No. You know, I think this there is some, you know, Brazil, North America are slightly stronger, but it is kind of, you know, on the margin. Everything is doing very well.
Pedro Heilbron: And, To answer your other question? We are we are we are pretty much positive on how sustainable the price increases are going to be. Because, as I mentioned before that before the oil crisis, our yields, our average yields in the region, were below 2019, and that is not even taking into account inflation. So as fuel comes down, even if there are some adjustments and some pricing comes down, we believe there will remain a positive impact And you know, I should also say that we had a record quarter in the in the first quarter of this year.
So going back to that, it is perfectly fine, but if there is and that was with the kind of lower than 2019 yields. We still had a record quarter. So if something is left which we are pretty sure there will be something left on the price increases, if fuel comes down. it is just gonna be net positive over an already strong base. So we are very positive about this.
Alberto Valerio: it is very clear. Look forward to it. Thank you very much.
Operator: Thank you. This concludes the question and answer session. I would now like to turn it back to Pedro Heilbron, chairman and CEO, for closing remarks.
Pedro Heilbron: Okay. Thank you. Thank you, operator. And thank you all for participating in our earnings call and our Q2 earnings call. Also, thank you for your continued support As you know, you have a committed Copa team on this side. Always working hard to make the results better. And with a very, very positive attitude about how this year. We think it is going to turn out. So, again, thank you, and have a great day.
Operator: Ladies and gentlemen, thank you for participating. You may now disconnect.
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