Copa Holdings, S.A. Q4 FY2025 earnings call

• Recognized by Cirium for the eleventh time as the most on-time airline in Latin America in 2025 with 90.75% on-time performance.
• Increased capacity 9.9% y/y, passenger traffic 10.1% y/y, load factor 86.4% (up 0.2 pp).
• Network expansion: Started service from Panama hub to Los Cabos, Puerto Plata, Santiago, Maracaibo, Salvador Bahia in Dec-Jan.
• Fleet: Took delivery of 4 Boeing 737 MAX 8 in Q4, ended 2025 with 125 aircraft; anticipate adding 8 more in 2026, ending year with 133 aircraft.
• Strong demand trends, solid booking trends, leveraging Hub of the Americas advantage.

Fourth Quarter 2025: Net profit was $172,600,000 ($4.18 per share), a 5.3% increase year over year. Operating profit was $209,600,000 with an operating margin of 21.8%. Excluding a $7,200,000 non-cash adjustment and a $6,000,000 foreign currency loss, net profit would have been $184,100,000 ($4.46 per share) and operating margin 22.5%. CASM was 8.8¢, with ex-fuel CASM at 5.9¢, a 1.6% year-over-year increase. Full Year 2025: Net profit was $671,600,000 ($16.28 per share), an 11.9% year-over-year increase. Operating income was $819,000,000, 8.8% higher year over year, with an operating margin of 22.6%, 0.8 percentage points higher than 2024. Capacity in ASMs grew 7.8%, passenger traffic (RPMs) 8.6%, load factor 87%, RASM 11.2¢ (down 2.6%), CASM 8.6¢ (down 3.6%), ex-fuel CASM 5.8¢ (down 0.7%).

• Expect to increase capacity in ASMs by 11%-13% in 2026.
• Operating margin expected to be in the range of 22%-24% in 2026.
• Assumptions: Load factor ~87%, unit revenues ~$0.11–$0.12, CASM ex-fuel ~$0.057, all-in fuel price $2.50 per gallon.
• ~90% of growth comes from full-year impact of 2025 capacity additions and additional frequencies in existing markets, 10% from new destinations.

• Currency volatility: Impact on revenues and costs, though stronger local currencies in South America were noted to improve demand and yields.
• Delivery delays: Earlier Boeing fleet delivery schedule updates affected fleet plans.
• Market uncertainties: Changing travel patterns due to events like the World Cup could impact demand.
• Legal/regulatory risks: Potential impact of Brazil's proposed law changes on passenger lawsuits and airline costs.

Q: Thoughts on demand impact in Venezuela and Wi-Fi provider?

A: Back flying to Venezuela with twice daily to Caracas and almost daily to Maracaibo, expecting to gradually return to pre-exit cities; Wi-Fi provider chosen, to be publicized in April.

Q: Stronger local currencies and full year RASM guidance?

A: Seeing improved demand and yields from stronger currencies, but guiding for full year RASM is based on overall outlook considering various factors including capacity growth.

Q: CASM ex fuel guidance and capacity evolution?

A: Confident in 5.7¢ CASM ex fuel due to initiatives like sales/distribution savings, densification projects; capacity growth slightly front loaded in first half, then moderating in second half.

Q: Wingo business and Cuba tech stops?

A: Wingo has restarted services, received a tenth 737-800, but not growing much in 2026; can tanker in fuel from Panama to Cuba with minimal impact on passenger capacity.

Q: Codeshare with Volaris and Venezuela market size?

A: Codeshare with Volaris still spooling up, not significant to business; Venezuela market size impact on overall network is manageable with capacity adjustments.

Q: Argentina/Colombia demand dynamics and buyback program?

A: Argentina and Colombia markets are doing well, though Argentina has more capacity year over year; buyback program approved for $200,000,000, half executed.

Q: Brazil law 400 impact and World Cup travel patterns?

A: Potential cost savings from suspension of law 400 reducing passenger lawsuits; World Cup causing changing travel patterns, with team working to manage extra sections and network adjustments.