Copa (CPA) Q4 2025 Earnings Call Transcript

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Date

Thursday, February 12, 2026 at 11 a.m. ET

Call participants

• Chief Executive Officer — Pedro Heilbron
• Chief Financial Officer — Daniel Tapia

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Takeaways

• Net Profit -- $172.6 million for the quarter, or $4.18 per share, marking a 5.3% increase in EPS compared to the prior year’s fourth quarter.
• Operating Margin -- 21.8% for the quarter; excluding a $7.2 million non-cash lease maintenance adjustment, margin would have been 22.5%.
• Capacity Growth -- Available seat miles (ASMs) rose 9.9% in the quarter; full-year capacity increased 7.8%.
• Passenger Traffic -- Revenue passenger miles (RPMs) grew 10.1% in the quarter; full-year RPMs increased 8.6%.
• Load Factor -- Increased 0.2 percentage points to 86.4% for the quarter; full-year load factor up 0.7 percentage points to 87%.
• Unit Revenue (RASM) -- 11.3¢ for the quarter (flat year over year); 11.2¢ for the full year (down 2.6%).
• Unit Cost (CASM) -- 8.8¢ for the quarter, down 1.6% year over year; full-year CASM was 8.6¢, down 3.6%.
• CASM Excluding Fuel -- 5.9¢ for the quarter (up 0.7% year over year); would have been 5.8¢ excluding the non-cash lease adjustment; full-year was 5.8¢, down 0.7%.
• Quarterly Foreign Currency Loss -- $6 million, attributed mainly to Brazilian real devaluation.
• Aircraft Fleet -- Ended year with 125 aircraft after receiving four Boeing 737 MAX 8s; eight more 737 MAX 8s expected to be delivered in 2026, targeting a fleet of 133 by year-end.
• Liquidity Position -- Total cash, short- and long-term investments at $1.6 billion, representing 44% of last twelve-month revenues.
• Total Debt -- $2.3 billion, with adjusted net debt to EBITDA at 0.6x.
• Average Cost of Debt -- 3.6%, all aircraft-related financing.
• Dividend -- Quarterly dividend of $1.71 per share approved for 2026, with first payment scheduled for March 13 for shareholders of record as of February 27.
• Buyback Program -- $200 million program in place; approximately half executed, half remaining open with no set end date.
• Shareholder Returns -- "We have the buyback program approved by the Board of $200,000,000. We have executed more or less half of it. And we have the other half remaining open."
• Capacity Guidance for 2026 -- Projected ASM growth of 11%-13%, with about half from the full-year impact of 2025 capacity additions, 40% from added frequencies, and 10% from new destinations.
• Operating Margin Guidance for 2026 -- Expected range of 22%-24%.
• RASM Guidance for 2026 -- $0.11–$0.12; management stated guidance is for flat RASM despite double-digit capacity growth.
• CASM ex-Fuel Guidance for 2026 -- Approximately $0.057, consistent with the long-term target of $0.056 by 2028.
• Expected Load Factor for 2026 -- "A load factor of approximately 87%."
• Network Expansion -- New services to Los Cabos, Puerto Plata, Santiago, Maracaibo, and Salvador Bahia launched; service to Venezuela being ramped up with plans to add more destinations during 2026.
• Wingo Operations -- Stable fleet at ten 737-800s; network restoration in Venezuela and Cuba discussed, with limited growth expected in 2026.
• Venezuela Service -- Service resumed to Caracas and Maracaibo; management expects full restoration of previous markets “gradually.”
• Codeshare Partnerships -- Primary codeshare with United; relationship steady but not above pre-pandemic levels; Volaris codeshare launched in November with limited expected business impact.
• Fuel Price Assumption -- 2026 outlook based on an all-in fuel price of $2.50 per gallon.
• Top Operational Recognition -- Cirium named Copa Airlines most on-time in Latin America for the eleventh time, achieving 90.75% on-time performance (highest in the Americas, second globally).

Summary

Copa Holdings, S.A. (NYSE:CPA) management reaffirmed its structural cost advantage and long-term strategic focus through disciplined execution and ongoing network expansion. Liquidity measures position the company with 44% of annual revenues in cash and investments, and the Board’s dividend approval signals confidence in sustained cash flow. Fleet plans call for further investment, targeting 133 aircraft by year-end, as capacity is set to grow primarily from full-year effects of prior expansions and targeted frequency increases in existing markets. Share repurchase activity continued, with half of the announced buyback complete, and partnership strategies remain focused on United codesharing and early-stage collaboration with Volaris.

• Wingo’s operational scope was clarified, with restored services to Venezuela and Cuba but little near-term expansion planned.
• Exposure to the Venezuelan and Brazilian markets, including anticipated regulatory changes such as Brazil’s Resolution 400, was discussed as a possible future cost tailwind but not factored into immediate guidance.
• Management attributed recent RASM and yield outcomes partly to regional currency fluctuations while emphasizing that their 2026 forecasts do not “is not only not part of the plan. It could be a windfall. It is a tailwind right now, but it is not what we are betting on, for growth or for having a strong year.” continued currency strength.
• Seasonal and event-driven demand, including adjustments for the World Cup’s impact on regional travel patterns, will continue to be managed dynamically by capacity redeployment and targeted extra sections.
• Quarterly and annual cost performance was supported by growth leverage and incremental savings initiatives, especially in sales, distribution, and fixed-cost containment, with cost discipline highlighted as central to future margin targets.

Industry glossary

• RASM (Revenue per Available Seat Mile): A key airline metric measuring total operating revenue earned per seat-mile offered, used to track unit revenue trends.
• CASM (Cost per Available Seat Mile): Total operating costs incurred per seat-mile flown; a core benchmark for airline cost efficiency.
• CASM ex-Fuel: Same as CASM, but excluding fuel costs; highlights underlying cost trends excluding commodity price volatility.
• ASM (Available Seat Mile): Measurement of airline capacity, calculated as the number of seats available multiplied by miles flown.
• RPM (Revenue Passenger Mile): Measurement of demand, calculated as the number of paying passengers multiplied by miles flown.
• Load Factor: The percentage of available seating capacity that is filled with paying passengers.
• EBITDA: Earnings before interest, taxes, depreciation, and amortization; a standard measure of operational profitability.
• C-Check: A comprehensive aircraft maintenance check required at regular intervals.

Full Conference Call Transcript

Thank you, Daniel. Good morning, and thank you for joining us for our fourth quarter earnings call. Before we begin, I want to recognize our more than 8,000 coworkers. Their hard work and commitment are fundamental to Copa's strong operational performance, and continued leadership in our industry. To them, as always, my sincere appreciation and respect. We delivered another quarter and full year of strong financial and operational results, reaffirming the strength of our business model and the structural advantage of operating the best positioned and most efficient hub for international travel in the Americas. Our results reflect strong demand trends across the region, continued discipline in our cost execution, and our relentless focus on operational excellence.

As a testament to our operational performance, in January, Copa Airlines was recognized by Cirium for the eleventh time as the most on-time airline in Latin America in 2025, with an on-time performance of 90.75%, the highest of any carrier in the Americas, and the second best in the world. Once again, I want to recognize our team. Without their commitment and dedication, it would not be possible to consistently deliver this level of excellence, which our customers expect from us. Now I will go over our fourth quarter highlights. We increased capacity by 9.9% year over year, while passenger traffic increased by 10.1%. As a result, our load factor increased 0.2 percentage points to 86.4%.

RASM came in at 11.3¢, flat versus fourth quarter 2024. We reported CASM of 8.8¢, and an ex-fuel CASM of 5.9¢, a 1.6% year over year increase.

Operator: Respectively.

Daniel Tapia: Excluding a $7,200,000 non-cash adjustment to the provision for future lease return obligations, ex-fuel CASM for the quarter would have been $0.058. Operating margin came in at 21.8%. Excluding the non-cash maintenance adjustment, we would have reported an operating margin of 22.5%. Turning now to the main highlights for the full year 2025. Capacity in ASMs grew 7.8% year over year while passenger traffic measured in RPMs increased by 8.6%. As a result, our load factor increased 0.7 percentage points to 87%. Unit revenues or RASM decreased 2.6% to 11.2¢. Unit cost or CASM decreased 3.6% to 8.6¢ and CASM, excluding fuel,

Operator: decreased 0.7% to 5.8¢.

Daniel Tapia: And as mentioned before, we delivered full year operating margin of 22.6%. Turning now to our network. Between December and January we started service from our Hub of the Americas in Panama to Los Cabos, Mexico, Puerto Plata and Santiago in the Dominican Republic, Maracaibo in Venezuela, and Salvador Bahia in Brazil, further strengthening our position as the most complete and convenient connecting hub for travel within the Americas. Regarding our fleet, during the quarter, we took delivery of four Boeing 737 MAX 8 aircraft and ended the year with a total of 125 aircraft.

Earlier this year, Boeing updated the fleet delivery schedule for 2026 and we now anticipate adding eight Boeing 737 MAX 8 this year and now expect to end the year with a total fleet of 133 aircraft. We continue to see a strong demand environment in our network as we enter 2026. Booking trends remain solid, supported by healthy travel activity throughout the region, which allow us to leverage the advantages of our Hub of the Americas. The current demand environment gives us confidence in our growth plan and reinforces the foundation for another year of strong margins in 2026.

Consistent with the guidance shared in our earnings release, we expect to grow capacity in the range of 11% to 13% in the year. As detailed in December at our Investor Day, approximately half of the growth is the full-year impact of capacity added in 2025, with an additional 40% coming from added frequencies in existing markets, and the remaining 10% from new destinations. To summarize, we delivered strong fourth quarter and full year results for 2025, Copa was recognized for the eleventh time by Cirium as the most on-time airline in Latin America and second best in the world. We continue to improve our already low and competitive cost structure which remains a core pillar of our business model.

We continue expanding our network, adding frequencies and new cities to our Hub of the Americas, and we are well positioned to deliver another year of profitable growth and strong margins in 2026. Now I will turn the call over to Peter, who will walk us through the financials in more detail.

Operator: Thank you, Pedro. Good morning, everybody.

Daniel Tapia: And thank you for joining the call today. I would like to start by reinforcing Pedro’s recognition of our team's continued dedication to delivering industry-leading results. Their commitment remains essential to our strong operational and financial performance. Let me begin by going over the fourth quarter highlights. We reported a net profit for the quarter of $172,600,000 or $4.18 per share, a 5.3% increase in earnings per share compared to fourth quarter 2024. Operating profit came in at $209,600,000 and we delivered an operating margin of 21.8% for the quarter.

I would like to highlight that our fourth quarter results include a $7,200,000 non-cash adjustment in the maintenance, material and repairs line related to the provision for future lease aircraft return obligation.

Operator: This adjustment

Daniel Tapia: was driven by a reduction in the discount rate used to calculate the present value of expected end-of-lease cost, as the applicable reference rate declined during the period. Additionally, during the quarter, we reported a foreign currency loss of $6,000,000 mainly as a result of the devaluation of the Brazilian real, which has since recovered in early 2026. Excluding these two items, we would have reported a net profit for the quarter of $184,100,000 or $4.46 per share.

Operator: And we would have reported an operating profit

Daniel Tapia: of $216,800,000 and an operating margin of 22.5%. With regards to our cost for the quarter, unit cost or CASM decreased 1.6% year over year, to 8.8¢ and CASM excluding fuel increased 0.7% year over year to 5.9¢. Excluding the non-cash maintenance-related adjustment, we would have reported an ex-fuel CASM of $0.058,

Operator: flat year over year. Moving on to our full year 2025 financial highlights.

Daniel Tapia: We reported a net profit of $671,600,000 or $16.28 per share, which represented an 11.9% year over year increase in earnings per share. Operating income reached $819,000,000, 8.8% higher year over year. Operating margins came in at 22.6%, 0.8 percentage points higher than in 2024. Our consistent delivery of industry-leading operating margins underscores the strength of our business model and disciplined execution. Now I would like to spend some time discussing our balance sheet and liquidity. As of the end of the fourth quarter, total cash, short-term and long-term investments stood at $1,600,000,000, representing 44% of last twelve-month revenues. Further demonstrating our financial strength and flexibility, we also have approximately $500,000,000 in predelivery deposits,

Operator: we currently have

Daniel Tapia: 47 unencumbered aircraft in our fleet. Total debt stood at $2,300,000,000 and we ended the quarter with an adjusted net debt to EBITDA ratio of 0.6x, reflecting our strong financial position. I would like to highlight that our average cost of debt, comprised solely of aircraft-related financing, remains highly competitive at 3.6%.

Operator: Turning now to return of value to our shareholders.

Daniel Tapia: I am pleased to announce that for 2026, the Board of Directors has approved a quarterly dividend payment of $1.71 per share to be paid in March, June, September, and December, subject to Board ratification each quarter. The first quarterly payment will be made on March 13, to all shareholders of record as of February 27.

Operator: Finally,

Daniel Tapia: turning to our outlook. We can provide the following guidance for the full year 2026. We expect to increase our capacity in ASMs within the range of 11% to 13% year over year. And as Pedro shared earlier, around 90% of this growth comes from the full year impact of capacity added in 2025 and additional frequencies in existing markets. And we expect to deliver an operating margin within the range of 22% to 24%.

Operator: We are basing our outlook on the following assumptions.

Daniel Tapia: A load factor of approximately 87%, unit revenues of approximately $0.11–$0.12, CASM ex-fuel of approximately $0.057, consistent with our long-term target of delivering a CASM ex-fuel of $0.056 by 2028, and we are expecting an all-in fuel price of $2.50 per gallon. Thank you, and we will now open the call for questions from the analysts.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please limit yourself to one question and a follow-up. Please standby while we compile the Q&A roster. And our first question comes from the line of Savanthi Syth of Raymond James. Your line is now open. Hey, good morning.

Savanthi Syth: Just wondering if you could, you know, with the developments in Venezuela, you know, just talk about if there was any demand impact in the region and then, you know, what your service there is and kind of the view for that.

Pedro Heilbron: Yeah. Okay. So hi, Savi. We are back flying to Venezuela, of course. And, actually, we only exited the market for a short period. We are flying twice daily to Caracas. And we are also flying to Maracaibo, which is almost daily, a little bit less than daily. Before we had to stop flying to Venezuela last year, we were serving five cities. And we expect to go back to those cities gradually. It will not happen right away, but we will be adding capacity throughout 2026.

Operator: That is

Pedro Heilbron: helpful. And if I might

Savanthi Syth: you know, you mentioned, you know, announced offering Wi-Fi. Have you chosen a provider, and, you know, is that you are going to be, is that for paid Wi-Fi or free or any kind of

Operator: thoughts on how you provide the Wi-Fi service?

Pedro Heilbron: Yes. We have chosen a provider. We have not made it public yet. We will do so, I think, in April. April. We will make it public, but we are confident that our product is going to satisfy all the needs and expectations of our clients.

Savanthi Syth: Very helpful. Thanks. Looking forward to it.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Duane Thomas Pfennigwerth of Evercore ISI. Your line is now open.

Duane Thomas Pfennigwerth: Hey. Good morning. Wanted to ask you about stronger local currencies,

Operator: you know,

Duane Thomas Pfennigwerth: currencies move, maybe people do not feel it right away, but over time, you know, purchasing power improves, and you might see some

Pedro Heilbron: demand pickup, in relation to that in some of the markets that you serve. So I wonder are you seeing any early improvement from stronger local currencies in some of your markets?

Duane Thomas Pfennigwerth: Correct. Yeah. So two answers to that. And we have talked about this before in previous calls. And we have always said, and it holds true today, that we do better when currencies are stronger

Pedro Heilbron: in

Duane Thomas Pfennigwerth: South America, in particular. And, yes, we are seeing improved demand and better yields as a result of the stronger currencies right now.

Duane Thomas Pfennigwerth: Okay. And then maybe just as a follow-up with respect to your full year guidance, which I think assumes flattish unit revenue, is that what you are seeing now, or are you starting the year, you know, stronger than flattish?

Pedro Heilbron: Well, we are guiding for the full year. And the first quarter is usually a strong quarter. The first and I mean, all of our four quarters are strong, of course. We do not have the huge seasonal swing. But quarter one and quarter three are usually the strongest, and quarter one lately has been the strongest quarter. So, of course, we are seeing stronger numbers but we are guiding for the full year and it is really early. So we are standing by our RASM guidance. And we are also adding, you know, double digit capacity this year. We take that into account also.

Duane Thomas Pfennigwerth: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Guilherme G. Mendes of JPMorgan. Your line is now open.

Guilherme G. Mendes: Yes, thank you. Hi, Pedro, Peter, thanks for taking my question. I have a follow-up on the RASM guidance. We were possibly surprised to see the flattish number despite the increase in capacity. The more appreciated local currencies. Pedro, do you mind sharing more details on what is behind that assumption? For

Pedro Heilbron: Yeah. It is a few things. Of course, we are confident on our demand outlook right now, and that is behind our RASM guidance. But, also, there are a few other factors. One is that 50% of that ASM growth in 2026 is the full year of our growth in 2025. So that has already spooled up, most of it. Another 40% is new frequencies, which are going to go mostly or all of it in markets where we need additional capacity. And we need to keep in mind also that we have been catching up in terms of Boeing deliveries. Now we are getting the deliveries that we need and that have been promised.

But in previous years, in particular, in 2024 and 2023,

Duane Thomas Pfennigwerth: we were behind quite a bit

Pedro Heilbron: in deliveries. We also had some catch up to do in markets that, in many cases, are unique to us. And we were not able to deploy enough capacity.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Filipe Ferreira Nielsen of Citi. Your line is now open. Filipe Ferreira Nielsen, your line is now open.

Filipe Ferreira Nielsen: Hey. Hello, guys. Sorry. I was on mute. Thanks for taking my question. I wanted to explore in a little more detail the guidance on the cost side. I remember in third quarter, you guided for CASM ex fuel between 5.7 and 5.8. And now you are assuming 5.7¢ in the guidance. Just wondering if there are any factors that made you a little more optimistic about targeting the lower range of the previous guidance? And how do you see this CASM ex evolving throughout the year? Thank you. Thank you, Filipe. Hey. This is Peter now. So for 2025, we reported a CASM ex fuel of 5.8. But, of course, we report to one decimal.

When you look at the full number and you add a couple decimals, you see we would be close to the middle of the range between 5.7 and 5.8. So that also gives us confidence for the 5.7. And we have a lot of initiatives, some going on and some new initiatives. Like we talked about, the full year effect of sales and distribution that still has some extra savings to come in. We have got a full effect of some densification projects that are going in. We have got the growth, 11% to 13% growth. It is something that is not with the fixed cost. And we also have new initiatives that we are working on.

And despite the fact that none of them make the headlines, the combinations of all these initiatives do add a couple of additional points. So I would say, what is embedded in the guidance is all those initiatives slightly offset by some inflation and some FX headwinds that we are seeing. Great. And just want a follow-up. I just wanted to hear a little more from you. How do you see capacity evolving on a quarter by quarter basis? We know that there is some carry from the deliveries that you took late last year. Just wondering if we should see stronger growth in the first half of the year and then moderating second half.

Maybe if you give a little color on that, please. Yes. You are right. As most of the 50% of the capacity comes from full year effect of last year's deliveries and service we launched. It is slightly front loaded. So we are going to see being more above the range in the first half, then slightly on the lower end of the range in the second half.

Operator: K. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Michael John Linenberg of Deutsche Bank. Your line is now open. Yes. Hi, Pedro. Just on the Venezuela service,

Michael John Linenberg: when you listed the markets, does that actually include Wingo? And I have sort of a question tied to Wingo on how you see that business this year. Is it sort of steady on the fleet size, or is there potential growth in 2026 at Wingo?

Pedro Heilbron: Okay. Sorry for that. I am sorry to our Wingo coworkers. I left Wingo out. Wingo has gone back in, with their own seven free daily frequencies from Bogota to Caracas. And they will be restarting Medellin to Caracas in the very near future. So I did not include Wingo. Wingo received a tenth 737-800 in the second half of last year. And then they went through a number of C-checks so they had to use that aircraft as backup for the C-check. So we will see the impact of their tenth aircraft this year. But, otherwise, it is stable. Wingo will not be growing much this year. And they will continue in the same path we saw last year.

Michael John Linenberg: Great. And then just a quick second one here, Pedro. I know that Cuba is not the biggest market for you, but you have always had long standing service there. Seeing a lot of international carriers either cut the service or maybe being forced to make tech stops. Do you have the ability to fly in with enough fuel from Panama City so you do not have to make a tech stop on a round trip flight to Cuba. Where are you on that? Thanks for taking my questions.

Pedro Heilbron: Yeah. Thank you, Mike. Given that Panama is sea level, and the distance from here to Cuba to Havana, we fly to two cities, but mostly to Havana, we can tanker in Panama and not take any fuel in Cuba, and that is what we are doing, with a minimal impact to our passenger capacity. So we do have to reduce the number of passengers very little. I think it is by 10 or 15, something like that, passengers. And then we are holding back from sending belly cargo. So those are the two things, the two adjustments to be able to tanker in Panama. Then Wingo, I will not miss Wingo this time.

Wingo flies from Bogota to Havana, and they need to make a tech stop in somewhere in Colombia, in Barranquilla, which is

Michael John Linenberg: sea level. And that is because Bogota is hot and high.

Pedro Heilbron: They make a stop in Barranquilla sea level.

Michael John Linenberg: Okay. Okay. Thanks for that.

Operator: Thank you. One moment for our next question. Next question comes from the line of Rafael Simonetti of UBS BB. Hello, and thanks for taking my question. It is a simple question, regarding the codeshare with Volaris. I wanted to know if the partnership remains with the potential deal between Volaris and Viva.

Pedro Heilbron: Thank you. Yes. Well, our codeshare with Volaris started in November. So it is still spooling up. And we have not really addressed the Volaris-Viva merger. At least I am not aware that we have addressed that. We expect the codeshare to continue. And in any case, it is not going to be a significant part of our business. Makes sense. Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Daniel McKenzie of Seaport Global. Your line is now open. Hey, guys. Thanks for the time here. Pedro, I am wondering if you can provide some

Daniel McKenzie: partner perspective. So the either the percent of revenue or the volume of passengers from your partners in 2025, versus what it was, say, pre-pandemic. And, you know, what I am trying to get at is how big a piece of the revenue story are the portfolio of partners? You know, is it more than 10%, less than 10%? Anything you can share?

Pedro Heilbron: Yeah. That is not a number we share. But what I can say is that our numbers are not above pre-pandemic. If anything, they are below or slightly below. Our main partner of course is United. We codeshare in many U.S. routes. And we are also partners in Star Alliance. But we had a partnership even before that. And that partnership is healthy, is strong, and United is doing extremely well themselves, so we know that. But, no, the numbers have not

Michael John Linenberg: changed, have not grown really pre

Pedro Heilbron: pre-pandemic, I mean, post-pandemic. Mhmm. Yeah. Partner United definitely a healthy partner.

Daniel McKenzie: Second question here, just going back to Venezuela. You know, as you think about the risk-reward of the country as part of the network, and I am wondering what its size as a percent of overall flying, you know, could ultimately look like, say, in two to three years.

Pedro Heilbron: Well, you know, of course, we have been born and raised in the middle of Latin America. And so if there is something we know how to do, it is how to deal with changing situations, crises of many kinds. We have proven to be very resilient in every market we serve. And I think we were the better airline in managing this whole Venezuela crisis that is taking quite a while. And we are also very loyal to the countries and cities we serve because we are loyal to our passengers, and we understand the importance of the connectivity we provide through the Hub of the Americas in Panama.

And sorry for this promo ad, but we are confident that we are managing capacity the right way, that we understand the market, and we are going to be there in the future in a successful way. Along the way, we might need to make adjustments. And that is kind of part of our day to day in Latin America, making adjustments. And we have enough opportunity to move around capacity. Right now it is from other markets to Venezuela. Before, it was from Venezuela to other markets. And we have continued returning strong demand even though we always have to make those adjustments. It is kind of our daily living and, you know, the team.

You know, this is not, like, I do not have the magic wand, but we have a team that knows how to deal with changing times and changing situations. Yeah. Very good. Thanks for the time, you guys. Thank you, man.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Pablo Montele of Barclays. Your line is now open.

Pablo Montele: Hi, good morning. Thanks for taking my question.

Pedro Heilbron: Again, on Venezuela, is

Daniel McKenzie: any of this destination included differently in this year guidance?

Stephen Trent: Or it is just basically business as usual now. Just wanted to understand if perhaps you think improvement as well that we might see some upside there or probably will have some incremental cost if you are thinking about expanding Venezuela at some point this year. So I just wanted to understand the impact of Venezuela in your guidance on the unit cost?

Pedro Heilbron: Yeah. Thank you, Pablo. It is not material. I mean, we are not guiding to Venezuela changing our results. There will not be any material changes either way. I mean, there could be upside, of course. But not what we are expecting right now. We are expecting our service to Venezuela to be very similar to the rest of the things we do throughout our network. And if we grow there or we grow in another market, it will not change our guidance in a significant way.

Stephen Trent: Perfect. And if I can add one follow-up, just out of curiosity, have you seen any interesting trends on the World Cup this year for the summer?

Pedro Heilbron: Yeah. Well, that is an interesting topic. Because, you know, World Cups in our region

Stephen Trent: do not happen

Pedro Heilbron: even every four years. So demand patterns are going to change due to the World Cup. And it is going to be different to what we are used to dealing with,

Duane Thomas Pfennigwerth: and we are working hard to try to minimize

Pedro Heilbron: the potential surprises from flights being very full in one direction, maybe not in the other, and then passengers that were going to vacation in Cancun or Punta Cana now are going to go to the World Cup in the U.S. or Mexico or Canada. So all of those changing patterns are a challenge to deal with. And we have a team working on that right now. We will fly extra sections to Toronto,

Michael John Linenberg: where Panama is playing its first two games.

Stephen Trent: Our third game is in New York,

Pedro Heilbron: not sure where we will play after that. If we qualify and keep on moving. Not sure where—oh, the finals are in New York. So, hopefully, we will be there. But we have—

Duane Thomas Pfennigwerth: let us not laugh. You never know.

Operator: So that is true.

Pedro Heilbron: But, of course, you know, the other teams are the favorites. I am not changing that. The favorites are very strong. So, anyway, we will have extra sections, quite a number of extra sections to Toronto. And then we are managing the rest of the network in the best possible way. And, hopefully, in the final, at least, even if it is not Panama, there are two countries that we serve. That will be fantastic. There are many. Yeah. So good.

Stephen Trent: Thank you. Thank you. One moment for our next question.

Operator: Our next question comes from the line of Jen Spies of Morgan Stanley. Your line is now open.

Jen Spies: Hi, everyone. So we have noticed that you are planning to increase capacity in Argentina and actually reducing a bit of capacity in Colombia. So I have a two-part question here. First, if you could please comment on the demand dynamics you are seeing in both of those countries. I think you already alluded a bit on Colombia, but also interesting to see what you are seeing in Argentina and how excited you are about those routes and demand in that market? And secondly, considering how nimbly you are allocating capacity, is it maybe fair to assume that, all else equal, your load factor guidance is actually conservative? Just putting that out. Thank you. Okay.

I will start with the second one first. Because some team members, especially from the commercial department, are here on the call. And they already feel challenged by our goals. So we think our guidance tends to be realistic. And we are always very close to guidance, year in and year out, because we make it realistic, and it is the same guidance that our team has. And a chunk of their compensation is based on us reaching those goals. So everything is well aligned. And for that reason, we need to be realistic. So I would say our guidance is realistic, and when there is upside, it is because there are other external factors that may,

Duane Thomas Pfennigwerth: you know, tailwinds

Pedro Heilbron: that make things easier. So once in a while that happens,

Duane Thomas Pfennigwerth: of course. In terms of

Pedro Heilbron: Colombia and Argentina, I should say that right now, all of our markets are looking well. Argentina is fine. Of course, it is not as strong as a year ago, because, as I mentioned in the previous call, a lot of capacity came in during 2025, but it is still a very strong market. It is still doing well only that year over year there is a lot more capacity from everyone. But we are doing well in Argentina. We serve a number of cities, our new cities, which started last year, are doing well too. And Colombia, it is also doing okay also. Alright. Perfect. Thank you, and congrats on the results. Thank you. Thanks.

Operator: Thank you. Thank you. One moment for our next question. Our next question comes from the line of Rogério Araújo of Bank of America. Your line is now open.

Rogério Araújo: Hi, guys. Thanks for the opportunity. I have a couple here. First one,

Stephen Trent: you already mentioned that

Pedro Heilbron: the local currencies have been supporting yields. Is this the only reason why Copa has expectations for a flat RASM, despite a double digit capacity expansion? Or in your view, are there other strengths in the region that could explain that or maybe some supply rationality? If you could give some colors on that. That is my first one. Thank you. Yeah. The currency, the potential currency strength or tailwind is not something that we are banking on for the full year. We know the volatility of our currencies—well, a lot of currencies in our region. And when we put together our growth plan, currencies were not as strong as they are right now.

So, no, that is not only not part of the plan. It could be a windfall. It is a tailwind right now, but it is not what we are betting on, for growth or for having a strong year.

Stephen Trent: Okay. Perfect.

Pedro Heilbron: Thank you. And also, it felt to me a little bit challenging on arriving to the CASM ex fuel guidance looking at my model and playing with the variables. So any color you could provide on which lines we could reduce further or that you see more opportunities? Anything you could share here would be greatly appreciated as well. Thank you.

Operator: So thank you. I—

Daniel Tapia: you for the question. This is Peter again. I would say that

Operator: our guidance, what has embedded is some benefit for the growth.

Daniel Tapia: So those lines that are fixed or semi-fixed will see a better benefit, part of the salary, wages and benefits—that part that is not operationally driven. And we are very disciplined to not grow overhead

Operator: in the same line that we grow

Daniel Tapia: capacity. So we are going to see some benefits in there. And we should be able to see additional benefits in the sales and distribution.

Operator: So I think if I would call out, I would say those were

Jens Spiess: two particular lines that we could call out right now.

Rogério Araújo: Okay. Very clear. Thanks so much.

Daniel Tapia: Thank you.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Guilherme Mendes of JPMorgan. Your line is now open.

Guilherme Mendes: Yes. Thank you so much guys for the follow-up. I got cut after my first question. But the second one is regarding the buyback

Stephen Trent: program. Peter, if you could remind us where you are on the buyback, how much you have executed so far?

Daniel Tapia: Thank you, Guilherme. We have the buyback program approved by the Board of $200,000,000. We have executed more or less half of it. And we have the other half remaining open. No end date in place. And whenever we do finalize it, we ask for a new one.

Guilherme Mendes: Perfect. Thank you so much.

Operator: Thank you. One moment for our next question. And our last question comes from the line of Alberto Valerio of UBS. Your line is now open. Hi Pedro and Peter. Thank you for taking my questions. My question comes from Brazil here. We heard that

Pedro Heilbron: there is a project to suspend the law 400 in Brazil, which would be good for the industry in terms of lawsuits from the consumers to the airline. I would like to see if you already see any positive impact on the liabilities of Copa with the Brazilian consumers and if, getting approval, this Resolution 400, what we can see in terms of upside to the future?

Stephen Trent: Thank you.

Pedro Heilbron: Yeah. Thank you. So the impact is going to be on cost, of course. And many might not be aware of this, but I think something close to, like, 90% of passenger/consumer lawsuits in the world come out of Brazil. And so that is going to be welcomed by the industry because the numbers just do not make sense and are not fair to airlines or to the reality of our industry. So there will be cost savings from that if it does pass.

Stephen Trent: Thank you, Pedro.

Pedro Heilbron: If I am not mistaken, it is already suspended, is it not? You are not being charged for the lawsuit since the end of last year. Correct me if I am wrong. Do you have any impact already from this or not? Well, we have the impact from the lawsuits. We all have the impact from lawsuits. I mean, to be transparent, I am not very familiar with the specifics of the law, the resolution, and what is going to change. Of course, I am aware of it, and it has been discussed. But it is one of those things that I want to see it to believe it. So it would be a positive.

I have not been very involved in the details of it, but it will be really important for the industry. It will be very positive. And, especially, it will be fair to the industry. And it will result in savings, of course.

Stephen Trent: Fantastic. Fantastic. Thank you very much.

Pedro Heilbron: Thank you. Thank you. Thank you.

Operator: This concludes the question and answer session. I would now like to turn it back to Pedro Heilbron for closing remarks.

Pedro Heilbron: Thank you. So thank you all. This concludes our earnings call. Of course, thank you for being with us. And as always, thank you for your continued support. Have a great day.

Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

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