Copa Holdings Profit Surges to US$115.9m in Q3

DALLAS — Copa Holdings the parent company of Panama's flag carrier Copa Airlines (CM), reported a net profit of US$115.9m or US$2.93 per share for the third quarter ending September 30, 2022.

For perspective, in Q3 2019, net profit stood at US$104m (US$2.45 earnings per share), indicating that the company is resilient as profits now exceed pre-pandemic levels (up 11.5%). COPA Airline's strong financial results in Q3 2022 came thanks to an uptick in passenger demand.

As a result, passenger revenue went up 13% to 774.2m (compared to 685.3m in Q319), while passenger traffic, measured in terms of revenue passenger mile (RPMs), increased by 0.8% compared to 3Q19. Capacity (ASMs), on the other hand, decreased by 0.6%. leading to load factors increasing by 1.2 percentage points to 86.8%.

Operating Profits, Costs

Operating profit for the quarter also exceeded 2019 levels, standing at US$143.7m ( up by 8.1%) with an operating margin of 17.8% ( down by 5%). Yields increased by 12.1% to US$14.1 cents, and revenue per available seat mile (RASM) increased by 15.0% to US$12.8 cents.

Operating cost per available seat mile (CASM) was reported at US$10.5 cents, increasing by 16.4% when compared to 3Q19, mainly driven by higher fuel prices that blanketed the entire industry in 2022. When fuel is excluded from the calculations, CASM stood at 5.9 cents, decreasing by 5.3% (when compared to 3Q19)

In October, CM received an additional Boeing 737-9 to increase its fleet size, and it expects another delivery by the end of November to increase the total fleet size to 97.

Comments from COPA

Copa stated that "After the losses related to the COVID pandemic, we have seen a steady improvement in our financial results. The company has a proven and very strong business model, which is built on operating the best and most convenient network for intra-Latin American travel."

"Going forward, the company expects to leverage its strong balance sheet, leading liquidity position, and lower cost base to continue strengthening its long-term competitive position by implementing initiatives that will further reinforce its network, product, and cost competitiveness," Copa added.

With over 80 destinations connecting Latin America, the Caribbean, and North America, CM is heading out of the woods after a two-year period of downward pressure on the air travel industry.

With more aircraft deliveries expected, steady improvements in financial results, and stable demand for travel, it is possible that CM will report a strong fourth quarter of 2022 and continue to do so in 2023.

Featured image: Kochan Kleps/Airways