• Operating Margin (Q4 2024): 23.3%
• Operating Margin (Full Year 2024): 21.9%
• Net Profit (Q4 2024): $166.2 million
• Net Profit (Full Year 2024): $608.5 million
• Earnings Per Share (Q4 2024): $3.99
• Earnings Per Share (Full Year 2024): $14.56
• Operating Profit (Q4 2024): $204.2 million
• Operating Profit (Full Year 2024): $753.4 million
• Cash and Investments (End of 2024): Over $1.4 billion
• Debt and Lease Liabilities (End of 2024): $2 billion
• Debt-to-EBITDA Ratio: 0.5 times
• Fleet Size (End of 2024): 112 aircraft
• Expected Fleet Size (End of 2025): 126 aircraft
• Quarterly Dividend (2025): $1.61 per share
• Share Repurchase (2024): $87 million
• Capacity Increase (Full Year 2024): 8.6% year-over-year
• Unit Revenues (RASM) (Q4 2024): $0.113
• Unit Revenues (RASM) (Full Year 2024): $0.115
• Unit Costs Excluding Fuel (CASAM-X) (Q4 2024): $0.059
• Unit Costs Excluding Fuel (CASAM-X) (Full Year 2024): $0.058

• Warning! GuruFocus has detected 1 Warning Sign with CW.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Copa Holdings SA (NYSE:CPA) achieved a strong operating margin of 21.9% for the year, demonstrating effective cost management and operational efficiency.
• The company increased its capacity by 8.6% year-over-year, aligning with its growth strategy and market demand.
• Copa Holdings SA (NYSE:CPA) was recognized by Cerium as the most on-time airline in Latin America for 2024, with an on-time performance of 88.2%.
• The company reported a net profit of $608.5 million for the full year, reflecting solid financial performance.
• Copa Holdings SA (NYSE:CPA) maintains a strong balance sheet with over $1.4 billion in cash and investments, representing 42% of the company's last 12-month revenues.

Negative Points

• Unit revenues (RASM) decreased by 8.2% compared to 2023, primarily due to weaker currencies in Latin America and increased industry capacity.
• The grounding of the 737 MAX 9 fleet and the cancellation of flights between Panama and Venezuela posed operational challenges.
• The company faces ongoing currency volatility, impacting financial results and creating uncertainty in revenue projections.
• Copa Holdings SA (NYSE:CPA) anticipates continued competitive pressure in certain markets, such as Brazil and Colombia, due to overcapacity.
• The geopolitical situation, particularly the lack of normalized relations with Venezuela, affects the company's ability to operate in key markets.

Q & A Highlights

Q: Can you provide more details on the delivery schedule for the 737 MAX aircraft and the slower delivery expectation for 2026? A: Pedro Heilbron, CEO: We are okay with the delivery schedule. We expect 13 aircraft this year, mostly in the second half, with two in June and the rest later. Some will be activated in early 2026. We are fine with this schedule given the opportunities for additional frequencies and new destinations.

Q: How does the current CapEx outlook compare to previous expectations, and what are the projections for next year? A: Daniel Tapia, Director of Investor Relations: CapEx for this year is slightly lower, around $850 million, with cash CapEx at approximately $200 million. Next year, it will be lower, around $450 million, due to fewer aircraft deliveries.

Q: What is the outlook for RASM trends and potential improvements in the second half of the year? A: Pedro Heilbron, CEO: We expect similar trends as last year, with potential slight improvements in the first quarter. A positive inflection in the second half is possible if conditions improve, but we are not forecasting significant changes in currency strength or demand.

Q: Can you elaborate on the regions experiencing overcapacity and its impact on yields? A: Pedro Heilbron, CEO: Overcapacity is mainly in Brazil, Colombia, and Central America, with growth rates close to 20%. This includes some of our own capacity. Overall industry capacity is growing at 6-7%, similar to our growth.

Q: How is Copa managing inventory and revenue management amid FX volatility in major markets like Brazil and Mexico? A: Pedro Heilbron, CEO: We price in dollars but sell in local currency at the daily exchange rate. We hedge half of our Brazilian sales, which mitigates some FX impact. The net impact on our P&L was closer to $28 million for the year.

Q: What are the expectations for business travel demand from corporate clients in the region? A: Pedro Heilbron, CEO: Business traffic and corporate accounts are flat year-over-year, with no expected growth in share of revenue. We anticipate growth tied to capacity but not in the proportion of business travel.

Q: How does the current geopolitical situation affect Copa's operations, particularly regarding relations with Venezuela? A: Pedro Heilbron, CEO: There are no current talks to normalize relations with Venezuela. We hope to return to that market, but there is no immediate resolution. The situation remains unchanged.

Q: What is the status of Copa's buyback program, and is there potential for acceleration? A: Pedro Heilbron, CEO: We have executed $87 million of the $200 million buyback program. We assess liquidity and CapEx needs, and given Boeing delivery delays, we have more liquidity. We expect to complete the buyback program this year.

Q: How does Copa's relationship with United Airlines influence potential collaborations or expansions? A: Pedro Heilbron, CEO: We have a strong relationship with United, including code-sharing and frequent flyer reciprocity. We collaborate on capacity additions, like the San Francisco-PTY service. We are satisfied with the current partnership and remain open to beneficial collaborations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.