Copa Holdings Reports Net Income of US$55.2 Million and EPS of US$1.26 for the Second Quarter of 2009

PANAMA CITY, Aug. 5 /PRNewswire-FirstCall/ — Copa Holdings, S.A.
(NYSE: CPA), parent company of Copa Airlines and Aero Republica, today
announced financial results for the second quarter of 2009 (2Q09). The terms
“Copa Holdings” or “the Company” refer to the consolidated entity, whose
operating subsidiaries are Copa Airlines and Aero Republica. The following
financial and operating information, unless otherwise indicated, is presented
in accordance with U.S. GAAP. Unless otherwise stated, all comparisons with
prior periods refer to the second quarter of 2008 (2Q08).

OPERATING AND FINANCIAL HIGHLIGHTS

— Copa Holdings reported net income of US$55.2 million for 2Q09, or
diluted earnings per share (EPS) of US$1.26, an increase of 81.3% as compared
to net income of US$30.4 million or diluted EPS of US$0.70 in 2Q08.

— Excluding special items, which for 2Q09 included a US$27.1 million
non-cash gain associated with the mark-to-market of fuel hedge contracts, Copa
Holdings would have reported an adjusted net income of US$28.1 million, or
diluted EPS of $0.64, compared to an adjusted net income of US$24.8 million or
EPS of US$0.57 for 2Q08. See the accompanying reconciliation of non-GAAP
financial information to GAAP financial information included in the financial
tables section of this earnings release.

— Passenger traffic for the months of May and June were negatively
affected as a result of the H1N1 flu crisis, which resulted in lower overall
demand for intra-Latin America travel, especially to and from Mexico. The
Company estimates that the H1N1 flu crisis reduced consolidated passenger
revenue by approximately US$12 million.

— Operating income for 2Q09 came in at US$36.8 million, despite a
US$12.8 million realized fuel hedge loss, representing an increase of 17.8% as
compared to operating income of US$31.2 million for 2Q08, which included a
US$7.5 million fuel hedge gain. Operating margin increased from 10.5% to
13.2%.

— In 2Q09, total revenues reached US$277.6 million, representing a 6.8%
decline, on a 16.5% capacity expansion. Yield per passenger mile decreased
13.3% to 15.6 cents and operating revenue per available seat mile (RASM)
decreased 20.0% to 11.4 cents.

— Revenue passenger miles (RPMs) increased 7.5% from 1.56 billion in 2Q08
to 1.68 billion in 2Q09, and available seat miles (ASMs) increased 16.5% from
2.09 billion in 2Q08 to 2.44 billion in 2Q09, with the Copa Airlines segment
increasing 18.1% year-over-year and Aero Republica increasing 8.9%.
Consolidated load factor decreased 5.7 percentage points to 68.7%. Break-even
load factor for 2Q09 decreased 6.7 percentage points to 59.7% from 66.4% in
2Q08.

— Operating cost per available seat mile (CASM) decreased 22.5%, from
12.7 cents in 2Q08 to 9.9 cents in 2Q09. CASM, excluding fuel costs,
decreased 9.1% from 7.8 cents in 2Q08 to 7.1 cents in 2Q09.

— Cash, short term and long term investments ended the quarter at
US$394.3 million, representing 31% of the last twelve months’ revenues.

— Copa Holdings ended the quarter with a consolidated fleet of 58
aircraft. Copa Airlines fleet consisted of 43 aircraft, including 28 Boeing
737 Next Generation and 15 Embraer-190′s. Aero Republica’s fleet consisted of
15 aircraft, including 11 Embraer-190′s and four MD-80′s.

— For 2Q09, Copa Airlines reported on-time performance of approximately
90% and a flight-completion factor of 99.5%, maintaining its position among
the best in the industry.

RECENT DEVELOPMENTS

— On July 16, Copa Airlines and Boeing announced an order for 13 Boeing
737-800 aircraft, plus options for an additional 8. At Boeing list prices,
the new order will represent a total investment of approximately US$1 billion.
Deliveries of the 13 newly ordered aircraft will begin in 2012 and end in
2015, with the 8 additional options available for delivery between 2015 and
2017.

— On July 23, Copa Holdings announced it has obtained final loan
guarantee commitments from the Export-Import Bank of the United States (EX-IM
Bank) to support the purchase and financing of two Boeing 737-800 Next
Generation aircraft scheduled for delivery in 2009, as well as preliminary
commitments for 10 additional aircraft scheduled for delivery between 2010 and
2012.

    Consolidated Financial &
    Operating Highlights           2Q09    2Q08   % Change    1Q08   % Change

    RPMs (millions)               1,676   1,559       7.5%   1,807      -7.3%
    ASMs (mm)                     2,438   2,093      16.5%   2,430       0.3%
    Load Factor                   68.7%   74.5%  -5.7 p.p.   74.4%  -5.6 p.p.
    Yield                          15.6    18.0     -13.3%    16.2      -3.7%
    PRASM (cents)                  10.7    13.4     -20.0%    12.1     -11.0%
    RASM (cents)                   11.4    14.2     -20.0%    12.7     -10.4%
    CASM (cents)                    9.9    12.7     -22.5%     9.9       0.1%
    Adjusted CASM (cents) (1)       9.9    12.7     -22.5%     9.9       0.1%
    CASM Excl. Fuel (cents)         7.1     7.8      -9.1%     6.8       3.0%
    Breakeven Load Factor (2)     59.7%   66.4%  -6.7 p.p.   57.5%   2.2 p.p.
    Operating Revenues (US$ mm)   277.6   297.9      -6.8%   308.8     -10.1%
    EBITDAR (US$ mm) (1)           91.2    66.7      36.6%   111.4     -18.2%
    Adjusted EBITDAR (US$ mm)
     (1)(2)                        64.1    61.1       5.0%    95.3     -32.7%
    EBITDAR Margin (1)            32.8%   22.4%  10.4 p.p.   36.1%  -3.3 p.p.
    Adjusted EBITDAR Margin
     (1)(2)                       23.1%   20.5%   2.6 p.p.   30.9%  -7.8 p.p.
    Operating Income (US$ mm)      36.8    31.2      17.8%    68.9     -46.7%
    Adjusted Operating Income
     (US$ mm)(1)                   36.8    31.2      17.8%    68.9     -46.7%
    Operating Margin              13.2%   10.5%   2.8 p.p.   22.3%  -9.1 p.p.
    Adjusted Operating Margin
     (1)                          13.2%   10.5%   2.8 p.p.   22.3%  -9.1 p.p.
    Net Income (US$ mm)            55.2    30.4      81.3%    71.6     -23.0%
    Adjusted Net Income (US$ mm)
     (2)                           28.1    24.8      13.5%    55.5     -49.3%
    EPS - Basic (US$)              1.27    0.70      80.7%    1.67     -23.7%
    Adjusted EPS - Basic (US$)
     (2)                           0.65    0.58      12.6%    1.29     -49.8%
    EPS - Diluted (US$)            1.26    0.70      80.4%    1.65     -23.4%
    Adjusted EPS - Diluted (US$)
     (2)                           0.64    0.57      12.8%    1.28     -49.6%
    Weighted Avg. # of Shares -
     Basic (000)                 43,338  43,195       0.3%  42,908       1.0%
    Weighted Avg. # of Shares -
     Diluted (000)               43,685  43,465       0.5%  43,464       0.5%

(1) EBITDAR means earnings before interest, taxes, depreciation,
amortization and rent.

(2) Break-even load factor, adjusted EBITDAR, Adjusted EBITDAR margin,
Adjusted Net Income and Adjusted EPS (Basic and Diluted) exclude non-cash
charges/gains associated with the mark-to-market of fuel hedges.

Note: A reconciliation of non-GAAP financial to the comparable US GAAP
measures appears at the end of this press release.

Full 2Q09 earnings release available for download at:
http://investor.shareholder.com/copa/results.cfm

    2Q09 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
    Date:                 August 6, 2009
    Time:                 11:00 a.m. EDT (10:00 a.m. Panama Time)
    Conference Call:
    Telephone Number:     877-545-1415   (U.S. Domestic Callers)
                          719-325-4854   (International Callers)
    Webcast Link:         http://investor.shareholder.com/copa/events.cfm

About Copa Holdings

Copa Holdings, through its Copa Airlines and Aero Republica operating
subsidiaries, is a leading Latin American provider of passenger and cargo
service. Copa Airlines currently offers approximately 144 daily scheduled
flights to 45 destinations in 24 countries in North, Central and South America
and the Caribbean. In addition, Copa Airlines provides passengers with access
to flights to more than 120 other international destinations through code
share agreements with Continental Airlines and other airlines. Aero Republica,
the second-largest domestic carrier in Colombia, provides service to 12 cities
in Colombia as well as international connectivity with Copa Airlines’ Hub of
the Americas through flights from Bogota, Bucaramanga, Cali, Cartagena,
Medellin and Pereira. Additionally, Aero Republica has direct daily flights to
Caracas, Venezuela, from the cities of Bogota and Medellin, Colombia.

This release includes “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on current plans, estimates and expectations, and are not
guarantees of future performance. They are based on management’s expectations
that involve a number of business risks and uncertainties, any of which could
cause actual results to differ materially from those expressed in or implied
by the forward-looking statements. The Company undertakes no obligation to
update or revise any forward-looking statement. The risks and uncertainties
relating to the forward-looking statements in this release are among those
disclosed in Copa Holdings’ filed disclosure documents and are, therefore,
subject to change without prior notice.

    Copa Holdings, S.A.
    NON-GAAP FINANCIAL MEASURE RECONCILIATION

This press release includes the following non GAAP financial measures:
Adjusted EBITDAR, Adjusted Net Income and Adjusted EPS. This supplemental
information is presented because we believe they are useful indicators of our
operating performance and are useful in comparing our performance with other
companies in the airline industry. These measures should not be considered in
isolation, and should be considered together with comparable US GAAP measures,
in particular operating income and net income. The following is a
reconciliation of these non-GAAP financial measures to the comparable US GAAP
measures:

    Reconciliation of EBITDAR
    Excluding Special Items                    2Q09       2Q08        1Q09

    Net income as Reported                   $55,162    $30,431     $71,615

    Interest Expense                          (8,520)    (9,815)     (8,936)
    Capitalized Interest                         233        484         318
    Interest Income                            2,211      2,596       2,563
    Income Taxes                              (3,115)    (3,507)     (5,641)
    EBIT                                      64,353     40,674      83,311

    Depreciation and Amortization             11,966     10,433      11,928
    EBITDA                                    76,319     51,107      95,239

    Aircraft Rent                             11,487     12,012      12,366
    Other Rentals                              3,345      3,610       3,812
    EBITDAR                                  $91,150    $66,729    $111,417

    Special Items (adjustments):
         Unrealized (gain) loss on fuel
          hedging instruments (1)            (27,069)    (5,679)    (16,163)
    Adjusted EBITDAR                         $64,081    $61,050     $95,254

    Reconciliation of Net Income
    Excluding Special Items                     2Q09        2Q08        1Q09

    Net income as Reported                    $55,162     $30,431     $71,615

    Special Items (adjustments):
         Unrealized (gain) loss on fuel
          hedging instruments (1)             (27,069)     (5,679)    (16,163)
    Adjusted Net Income                       $28,093     $24,752     $55,452

    Shares used for Computation (in thousands)
         Basic                                 43,338      43,195      42,908
         Diluted                               43,685      43,465      43,464

    Adjusted earnings per share
         Basic                                   0.65        0.57        1.29
         Diluted                                 0.64        0.57        1.28

FOOTNOTE:

(1) The 2Q09, 2Q08 and 1Q09 periods included non-cash gains of
US$27.1 million, US$5.7 million and US$16.2 million, respectively, resulting
from the mark-to-market accounting for changes in the fair value of fuel
hedging instruments.

    CPA-G

SOURCE Copa Holdings, S.A.