Copa 4Q15 Earnings Call Notes

Pedro Heilbron – Chief Executive Officer & Director

Possibly the most challenging economic environment in a decade for Copa

“I want to congratulate our co-workers for their efforts in what was possibly the most challenging year for Latin America and for Copa in the last decade as the region is going through an economic contraction and currencies have devaluated significantly against the U.S. dollar, exerting considerable pressures on yields.”

Load factors are trending flat, but yields are down

“Turning to our current demand environment, load factors were trending flat year-over-year during the first quarter of 2016. However, yields are down significantly year-over-year, given the effect of currency devaluations experienced during the last 12 months, as well as a softer economic environment.”

Not seeing much of an impact from Zika

“I mean, we could say maybe it’s too early, so – I don’t want to say that there won’t be an impact in the future. But so far, we have not seen an impact. Also bear in mind that in those markets, most of our passengers originate in Latin America so the Zika scare is not such a big deal. We’re already living in Latin America. And I guess the main threat is to pregnant women, but pregnant women don’t tend to travel that much. So far we’re not seeing an impact.”

Jose Montero – Chief Financial Officer

Revenues down by 17% driven by currencies and economies

“Our 2015 profitability was affected by revenues, which came in 17% lower year-over-year. As we’ve mentioned before, the lower revenues were driven mainly by weaker economies and weaker currencies in Latin America, particularly in Venezuela, Brazil and Colombia.”

Brazil, Venezuela and Colombia are the three major drivers

Yeah. But there is a clear breakdown of the affect on our unit revenue performance driven by Brazil, Venezuela and Colombia. Those are the three major drivers of this – in the percentage that Pedro mentioned.

Didn’t have significant cash balances in Argentina

“Well this is Jose here, Duane. We currently do not hold any significant balances there. Basically, the government there liberalized the exchange rate after they came into power, so therefore there is no real limits on repatriations there. And we do not hold significant balances there. The impact there was due to the fact that at one point, when the currency got – was opened, we had to revalue our net asset position in the market. So therefore, that’s what that is about. And there – and so basically, that’s the way that it was valued. Now it wasn’t necessarily a revaluation of any cash holdings that we have there.”