Copa Holdings (CPA) Q1 FY26 earnings call: guidance and Q&A

How much of Q2 was booked before fare increases, and which regions are strongest?

All regions are performing very well, showing strength across the network. The company was about 40% booked for Q2 when fuel prices spiked, limiting immediate yield recovery for that portion.

“We were already sold or booked around 40% in the second quarter when this conflict and fuel prices hit us. So we could not do anything about that 40% for the second half of the year it's much different.”

asked by Savanthi Syth · answered by Pedro Heilbron

What tailwind did stronger local currencies provide in Q1 and what's expected for Q2?

Stronger Latin American currencies generally benefit Copa, as a higher percentage of traffic originates from the south. Most major currencies are up double digits YoY, playing a positive role in demand resilience.

“most of the important ones of the larger markets are up double digits. So yes, that, of course, plays a positive role in what we're seeing.”

asked by Savanthi Syth · answered by Pedro Heilbron

Is the 1% CASM ex-fuel decline consistent across quarters, or are there easier comps in Q2?

The full-year CASM ex-fuel guidance of $0.057 implies a relatively stable trend across the year, with no particular quarter having a massively easier comp.

“we're guiding for a full year CASM of $0.057. And we always talk about CASM being pretty much in the range of the year, pretty stable.”

asked by Duane Pfennigwerth · answered by Peter Donkersloot Ponce

Are competitors scaling back capacity in response to high fuel prices, and what is Copa seeing in the market?

Besides Spirit Airlines' situation, Copa has not observed any particular movement or capacity pullback from other airlines in the region in response to current fuel prices, though it might happen in the future.

“we haven't really seen any particular movement from the rest of the airlines serving the region. We haven't seen any capacity pullback in response to the current fuel prices. That is not to say that it might not happen in the future, but we haven't really seen anything up to now.”

asked by Michael Linenberg · answered by Pedro Heilbron

Is the lower crack spread sustainable, and does the full-year guidance imply nominal pass-through or margin recovery?

The company uses U.S. Gulf Coast jet fuel future curves for guidance, similar to others, with a 15-day lag. Full-year guidance assumes current yield adjustments, the fuel curve, and booking levels, with substantial fuel cost recovery up to 100% by year-end, implying margin recovery as bookings for H2 are lower and allow for better yield adjustments.

“for the second half of the year, bookings are much lower because that's just how the booking curve works, means that those yield increases that are already in place are going to have a more significant impact in the second half of the year than what they were able to have in the second quarter.”

asked by Alberto Valerio · answered by Peter Donkersloot Ponce

How is capacity allocated across regions, and how are Venezuelan operations developing?

Capacity is being shifted slightly towards more profitable routes, but no significant changes due to strong demand across the network. Venezuelan operations are returning to pre-crisis capacity by June, serving 5 cities with over 40 weekly flights, but their impact on overall unit revenues is not significant.

“by June of this year in a few weeks, we're going to be back to the same capacity we had a little bit over a year ago. We will go back to 5 cities and over 40 weekly flights in Venezuela.”

asked by Filipe Nielsen · answered by Pedro Heilbron