Copa Holdings, S.A. Q2 FY2025 earnings call

• Recognized the team's efforts contributing to strong results. - Capacity up 5.8% y-o-y, load factor 87.3%. - Passenger yields down 4.1% y-o-y, RASM down 2.8%, CASM down 4.6%, CASM ex fuel up 3.2%. - World-leading on-time performance (91.5%) and flight completion factor (99.8%). - Recognized by Skytrax as Best Airline in Central America and the Caribbean for 10th consecutive year. - Expanded network with new service to San Diego, restarted flights to Caracas, and planned new services to Los Cabos, Puerto Plata, etc. - Took delivery of 3 Boeing 737 MAX-8 aircraft, on track to end 2025 with 125 aircraft. - Declared third dividend of $1.61 per share on September 15.

Copa Holdings reported a strong second quarter with a 21% operating margin and 17.7% net margin. Capacity increased by 5.8% year-over-year, load factor was 87.3% (up 0.5 percentage points from Q2 '24). Passenger yields were 4.1% lower year-over-year, unit revenues (RASM) declined 2.8% to $0.107, unit cost (CASM) decreased 4.6% to $0.085, and CASM excluding fuel increased 3.2% to $0.058. Net profit was $149 million or $3.61 per share, a 25% year-over-year increase in earnings per share. Cash, short-term and long-term investments totaled $1.4 billion, total debt was $2.1 billion, and the adjusted net debt-to-EBITDA ratio was 0.6x.

• Reaffirmed full year operating margin guidance of 21% to 23%. - Maintain capacity growth in ASMs range of 7% to 8% y-o-y. - Outlook supported by healthy demand environment and cost discipline, with RASM ~$0.112, ex-fuel CASM ~$0.058, and all-in fuel price $2.45 per gallon.

• Currency fluctuations affecting top line, yields, and CASM. - Fuel price variations impacting margins. - Competition in the aviation industry affecting market share and yields.

Q: Talk about demand in biggest point-of-sale markets and passenger segments A: Load factors increasing, most markets have strong/steady demand, yields slightly down due to industry capacity growth Q: Impact of weaker dollar on FX, yield, CASM A: Most sales originate in South, benefit from stronger Latin American currencies, but not significant. Costs mostly U.S. dollar based, FX not major impact on costs Q: Airport capacity at PTY, infrastructure projects A: Airport expanding runways, extending one runway, adding gates to new T2, work to continue over 3-4 years Q: 2026 yield outlook, buybacks A: Yields seen holding steady despite capacity growth, buyback program with ~$10 million executed year-to-date, half of $200 million program Q: Cargo business outlook A: Cargo strong, adding second 737-800 freighter, but impact not significant Q: Fuel price assumption, CASM ex fuel trend A: Fuel price in guidance ~$2.45, not updated daily; CASM ex fuel expected flat in second half, committed to $0.058 full year, RASM expected similar to second half last year Q: Demand strength/weakness across regions, Wingo's results A: Central America to U.S. weak, domestic Colombia strong favoring Wingo Q: Role of technology in revenue journey A: Invested in digital tech, homemade IBE and app, working with third parties for dynamic pricing, in infancy with AI and dynamic pricing Q: Seat densification journey A: 30 aircraft pending densification to 156 seats, maintaining comfort features