CPA - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Copa Holdings Second Quarter Earnings Call.

During the presentation all participants will be in a listen-only mode. [Operator Instructions] As a reminder this call is being recorded on August 5, 2021.

Now, I will turn the conference over to Daniel Tapia, Director of Investor Relations. begin. may you Sir,

Daniel Tapia

And to Stephanie. earnings second call. welcome, you, our everyone, quarter Thank

are of Heilbron, José us Pedro Joining today CEO CFO. Montero, Copa our and Holdings;

First, from results. in Immediately second we non-IFRS will been A over José, to by call, prepared today’s financial with call copa.com. International accordance will Holdings’ the after, Pedro reconciliation for financial the will followed have non-IFRS questions found of financial who financial Standards. company’s the highlights, release, Copa been be Financial by our can we our discuss open will measures. start earnings analysts. quarter going which IFRS discuss measures In website, our posted Reporting in has reports on

not the future involve that differ limited to subject of SEC. today these are cause discussion filed forward-looking are results. that report Our historical change. could based company’s Many on intentions the results regarding beliefs, actual in statements, reflect annual expectations events and/or our and and uncertainties discussed statements These to will also risks forward-looking to and current facts with materially assumptions contain

Now I’d turn over call our Executive like Officer, Heilbron. Pedro the Chief Mr. to to

Pedro Heilbron

morning second Daniel. to thanks you, in and our Good Thank participating quarter for call. earnings all,

as at I’d Copa Before my the and commitment utmost to forefront recognize our Latin to the always, like we keep coworkers of begin, aviation, company dedication respect and their all thank for them, to to their and continuous admiration. American efforts

decided earlier month. professional and company challenge Raul many last As new of left know, to take a Pascual on you the

company of Relations. over the many most to dedicated areas, and to airports, new and recently, our years XX like welcome the fleet We’re he Daniel including XX planning. in experience Copa. work to more Tapia, very network also grateful than the of with has Investor outstanding for I scheduling Daniel years opportunity would take of Director

in Relations ability lead Investor to group. We’re very our Daniel’s confident

discussed earnings in America. two diverging remember, Latin call, themes our may we in you As last happening

On which a Panama, countries, hand, environment. and were infection in rate, to the led travel demand some restrictions experiencing one improved including fewer downward trend an

On the virus, of travel. led new demand air for the struggle reimpose travel them other continued requirements to health many and/or restrictions several international countries hand, with affecting other which to

not As the COVID-XX maintained to much. ability Due of today, increased in story travel cases, has capacity. increase affected to restrictions, changed has some countries in which the cases, and, have reinstate several our

the capacity allowed mainly factors. continued leisure On and hand, we quarter-over-quarter from transitioned increase certain month to have reactivate Hub other to back the lets of of also and a us started Americas restrictions, structure, destinations and to growing while has successfully June, us significant which which six destinations. recover, markets U.S. the some storage the load without cost XXXX. and to aircrafts sent frequencies Moreover, the of to Panama to temporary we enables continue in efficiencies back connecting adding during bank our In

a and the forward, will restrictions the we a demand of COVID-XX the will we capacity vaccination expect positive in the supporting second on assume deployment rates infection recovery, the to of faster relaxation have effect region, half year. for lead Going efforts ongoing which travel

Now, I’ll of results. our quarter highlight some second

an in QX. additional allowed our $X.X and profit as a capacity, capacity $X.XXX compared increased improvement quarter. quarter. We of $XXX operating quarter to by yields. to the load XX%, higher in QX of CASM reduce The to XXXX the Load compared capacity, XX% Revenues XX% over additional second of improved ex the million, fuel eight in million came XX% us to of the we percentage an also is from of ASMs terms in previous which first result quarter to reported In reached the factors at first in quarter. factor points $X.XXX

adjustment primarily revenue billion. have million to better $X.X of loss passenger reported our per million a which cash $X.X stronger ended an expectations, $XX Cash the over was $XX.X of than liquidity accretion and of due month, billion quarter. balance a total operating company with quarter averaged sales million. would Excluding the the We in $X.X

terms In XX.X%, report in factor testament product flight continuous and employees’ the a complexity on-time and quarter again, the commitment the passengers. is imposed best us XX% operations which to a true our of performance world-class our of we’re multiple protocols, to and pleased to despite a biosafety by the to the among places completion providing an world for of our

six compared can that operated now it report pre-pandemic. four the Turning it’s XXX-XXXs We now to to operating Wingo.

which During continued second and I’d San our and new quarter, Hub Peru. model been business José, intra-Latin geographic balance convenient advantageous it’s full-service performance Panama’s in Americas, is from Bogota based to a like XXXX. best capacity strongest QX, finalize, the Panama on-time since Lima, lowest that from proven best flights Wingo travel America from to more region’s Rica strong with position the its To a the and of unit the for and for sheet. And expansion network with reaffirm carrier, operating on cost than we leveraging regional operating have to Costa most

even advantage. Going its Americas expects forward, more Hub company valuable the of strategic will that source an the be of

financial José, over I’ll will in Now detail. to it go results who our over more turn

José Montero

safe quarter I us our acknowledging for in everyone. team you your months I going start efforts hope great our doing of and like second many Pedro. the and by join for I’d and Thank today. over are Pedro all their results. families morning, Copa Thanks spirit Good pandemic. well. great to you, joining will that

of available quarter. in capacity for quarter about Load per XXXX. $XX.X share. or at to capacity of $X.XX which amounts miles, the at operated factor net during billion profit million in XX% of average a came $X.X second We XX% the seat of reported Our an came the

gain items we quarterly related million, early XXXX came million issued are to for fuel notes the reported We as Special mark-to-market including of XXXX. of convertible in $XX.X quarter not year. the an this in have share. Excluding our better to during while tickets, of XX% in comprised loss past revenues revenues, company’s as noting would for XXXX On basis, ASM, at made quarter at focus related excluding second items, $XX.X the reported unredeemed well $XX.X continued million the to unredeemed of per million. the an the $X.X net $XX.X pre-COVID profit, in mainly a which a at special operating first loss and an the unrealized capacity achieved savings or during worth our $X.XX costs, per that It’s which came a than growth corresponds sales Unit operating ticket of by adjusted capacity. million the of on million quarter-over-quarter $X.XXX loss result in $X.X we quarter operating we achieved for had quarter. adjusted and driven maintaining

targeting capacity. our and we are cost achieve $X.XX our savings cost reach continue unit We initiatives, below with we to once of our pre-COVID-XX XXX%

our our XXXX. for from at driven underlying were yields, cost QX Aside quarter better our in those which primarily results the in $X.XXX performance, than X% by operating an basis, came on

well mainly cash some per is of by ahead We cash which as as operational month $XX driven our timing the quarter, the period million and expectation increased of approximately of also sales outflows. during accretion for achieved

I’m spend the extraordinary for from time proceeds a to payment include liquidity. CapEx reminder financial and now obligations. our As exclude asset cash balance sales we our going discussing of our all accretion sheet but some and measure,

$X.X end of investments billion. we short cash, second As ended billion long-term at quarter, to the of $X.X of close the and assets had our and

our with quarter the ended added liquidity to of million an credit to also We committed in total $XXX aggregate $X.X more brought than cash our unutilized facilities, billion. which amount

In liabilities, the levels the terms end billion of reported the for $X.X with ones debt, quarter. debt quarter and of the we lease to ended first similar in

to fleet. now Turning our

the delivered the aircraft delivery the quarter, finalized During our in fleet. the Embraer-XXX remaining And July, Embraer-XXXs. sale month in three second last we of we of and

include the In During six our XX XXX-MAXXs. six we XX fleet to XX remaining our we an year now keeping we a entered to figures, MAX expect XXX-XXXs, XX into temporary and with considering with sale receive quarter ended decided we and the keep XXX-XXXs and XXX-XXXs July, the We more for of XXX-XXXs. XXXX.During of these sent we in Xs expect storage agreement fourth to of the to total XXX-XXXs the six during aircraft. are aircraft, quarter, that end were month two the second the also XXX

full our year for as guidance. to As XXXX, providing uncertain still will environment. operating in an outlook the we’re and rest unpredictable be not such, we of And demand

for the be to of XX% at at environment expect air million. and XXXX However, ASMs, restrictions month following about the to levels of We preliminary that the revenues QX approximately quarter billion provide the for the demand capacity can results based state approximately third of – about We XX% XXXX. current and $XXX QX levels $X.X on XXXX of trial of outlook July, be

expect our $X.XX, We quarter. to the fuel be second a decrease of ex XX% CASM approximately versus

we price for during Thank incur to per we’ll to assumptions, the the our these quarter all-in operating questions. And Given will be you. $X.XX some that, gallon, to open the CapEx as neutral with we well quarter. incremental call of cash expect that an as reactivate the fuel fleet, third

Operator

is with Thank Pinningworth you. line ISI. your [Operator from Instructions] question the first And Duane Evercore of

Ray Wong

Ray morning Duane. on Hey, actually This Good for Wong is guys.

or restrictions what for provide bright leisure demand into U.S. significant You Do some travel those could major had a markets significant And lines, requirement? countries in in the a have place? for of percent network vaccine your that some travel specificity your mentioned countries in indicator Along have reopened? restrictions are any have being recovery. spots specifically don’t you

Pedro Heilbron

we providing restriction, Mexico but as Pedro like market industry or might few of have exact but sort before happening is of quarantine also much restrictions This when x here. restricting a like have the percent in as example. a like get it. think number test, a be I negative of are travel hours pretty whole and every test some have antigen travel, It don’t, capacity. of simple restriction. numbers, markets for Chile, course, other where countries Argentina pretty that much have most Others countries restricting the Okay. are I few most PCR is don’t And flights affected has an to it’s and rest the Brazil the the

for Brazil but or to like Islands, higher not pinpoint, the like open It’s the a Republic. seeing as Brazil, But as we faster not those the all. markets hard the recuperation open markets have most expected. Caribbean U.S. would Those some for recovery know. than as origins, Dominican Mexico, that be are markets, ones for it’s So restrictions

Ray Wong

for it where be my do higher follow-up, And you as across shifts lower? you longer-term capacity see structural helpful. look That’s competitive your just whether network, or

José Montero

longer the term? in capacity Competitive

Ray Wong

Yes.

times. when of competitors – network you see you a etc., like through sense your network when other across like harsher restructuring, Just going see

Pedro Heilbron

mean I before. of XX different our but with to Chapter are – we see really they what much Chapter XX, have don’t that of be come won’t there a them we restructuring No, a under Yes. expect network main to competitors, number out

Of don’t for we course, know sure.

We They and existing competition, we’re seen shifts throughout restructuring then there, of region. from there’s course, haven’t new adding And any. the not expecting but major plans, if our new carriers. are capacity

So shifts in more that we know to to think I can but if something. capacity see competition major no future, add don’t expect the José I wants of,

José Montero

thing the And markets lot the of we to carries bit strength that has of world terms it that in I post-COVID serve. that only still the a Hub add uniqueness smaller quite that and in of that a Hub is

some the the that under a point-to-point of that on And some The served carriers cannot we’re even therefore, the of still on positioned think so capacity U.S. increased from basis. competitive and the the in competes be the well very influx I is reality that Hub region of markets well low-cost

Ray Wong

that. for you Thank

José Montero

Thank you, Ray.

Operator

question next of Trent the Your from is with Citi. Stephen line

Stephen Trent

the it’s guys by if services. here. given industry seen we’re specific to two paper much launch one about know have travel so Thanks, had that contacts I’m of curious, my for slower this in type or seen wondering what try the to they talking I’m question. mentioned with – kind like plans if Americas. taking tigers even business businesses I’ve business we’ve or passenger-only you anything

get to take love that. Just your on

Pedro Heilbron

operate might Yes. Well word, narrow be of mainly different others. to in in but the are our markets. world and we not And many distances shorter case, bodies. in part every The our

also. and that getting close we’ve So – it’s that about network of of is but heard we’re that in lot a in we’ve virus markets, a traveling some after what depend those what pre-pandemic. lot say that slowdown, of VFR accounts corporate our pre-pandemic, and travel not was is And will slower our would the I course, the travel than recovering to start I’m XX% for on summer, corporate it’s leisure sure seen

know make more market. to a weight our among split We’re VFR. forward, changes for always to But a target not a at VFR we and be leisure, – almost product specific product corporate, all to few least recovers, evenly have We’ve fully and that been there cater planning to three corporate segments. will any what can be until is years, going toward will that leisure and there more major

our than costs sure be lower before. making we’re So going are to

have the little bit can on success if yields. same we even there’s a more So pressure

Stephen Trent

– they anything Panama, the Okay. Pedro. quick or just your to in you that? my if has in problems. itself, Panama could me been airport quarantine Very remind And know But refresh with as for allowing a no Panama what of requirements transit helpful, Could have like that you follow-up. pass memory, arriving passengers I foreigners kind through

Pedro Heilbron

test, no and a the before other There’s negative Europe, most hours Latin than America U.S. travel XX from for requirement passengers

countries, high-risk test the certain a on and from and few hotels. have mostly then listed in the from America arrival another quarantine plus provide However, to test South one of a Europe, three-day negative

the a fully vaccinated, the that the with arriving has passenger from it don’t test to quarantine. is passenger is However, the high-risk then change, negative go about plus country if – away three-day

Stephen Trent

helpful. Thank Very Okay. you.

Operator

question Keay Hunter from next with Research. is line Wolfe of Your the

Hunter Keay

incur know everybody. conversations counterparts learned morning, from Have sometimes Pedro, airline your airlines I as some states same the any operational with the here U.S. afar or ensure you right you operationally on that safety Good we’re about and issues in that of to seeing you you Hey, either seen that lessons up collaborate issues. through restarting consider don’t just operations might happening now? contemplate

Pedro Heilbron

in to XX% We guiding have pre-pandemic QX. of now capacity – obviously, we’re

So since it we’ve doing QX, gradually. QX up been actually We’ve of since year. been spooling last

growing going XX% QX be ASM. However, and between to QX, we’re in

on-time had But you’ve back in to XX% even seen to our we’ve haven’t capacity. higher a capacity. QX and we fastest it’s done the coming step be performance, in few like a from So it going redeployment quarters get of our as And correctly. QX, in at lost with

We’re not to to beginning, we now. the have but and lot attention, talked groups, were which is not with and question, we paid peers industry specific others, have of we some the a our of your talked right very but closest and airlines cooperating that our from have too

Hunter Keay

Okay.

factor could José, Okay. per question, And ASMs for a of here. curious modeling be kind sorry I’m then, gallon. about the it but nice little

the had a going you stage next above X,XXX higher gallon take the XX% three under ASMs to length, you or rid You these the per low you’re able miles coming to about years? over think Obviously, got are you as them in, of maybe to even be E-XXXs. MAXs two E-XXXs, keep But

José Montero

Yes.

think better that basis. XXX I MAX the has trend performance on per that a XX% ASM – fuel a around than is the the

we over MAXs gallon into the next the So therefore, will in. you months figure the more the per that MAX in come that ASM can as as come improvement several there be will an be fleet, certainly assume that seeing

MAX of fleet. represents So XX% the now yes, right almost the

the more business. passes is gone, and the So it then become times the going-forward and that on in are also more fuel we’re in fact moderate have aids important that come other also the more seeing to and in MAXs quickly. will a you as performance basis, that and thing the that E-XXXs And

Hunter Keay

this So forward, here is level a do think? going you sustainable

José Montero

Yes.

Hunter Keay

you. Thank

Pedro Heilbron

question? Do we have a next

Operator

Suisse. with Credit Zamacona Alejandro

Alejandro Zamacona

And does savings, as to mean, once from? Thank expectations where you. fully What on savings question Hi Pedro, savings do fuel capacity Thank may long structural unitary you. José, Daniel. quick there terms the is and you be cost some Kayaks these capacity recover, recovered. come are of cost structural continues I in A might MAX believe as cost. your

José Montero

Yes, Alejandro.

we at our As saw, QX are to capacity. is $X.XXX, first you which only getting our of our that’s and XX% at all, CASM providing guidance of close for XXXX XXXX very

So close to had pre-pandemic. getting it levels that we is the

first that we we at we prepared remarks, is that by my we’ve counterparties exceeding our in were we all, do And capacity. $X.XX. of with last achieve mentioned reach in – Well, year. that pre-pandemic below I really XXX% business with. the the where yard XXXX CASM that over below as expectations, year, is Our the That will contracts time of renegotiating been last with were did come the We where from? suppliers,

very I We for changes than in of were we with a a leaner efficiencies the both bit adamant continue made plans, well looking that in we IT ago. mean, contracts, ASM fleet terms on we on have about provides we’ve organization been our systems. a savings we where year a quite that. savings Overhead, per as further are with And continue that of basis.

So XXX%, be CASM that are confident that we we and than will will less $X.XX. to it’s that, back about we all get achieve

Alejandro Zamacona

I Okay. And what question, the decision may. just I was the the a decision, rationale XXX-XXXs. keeping the if – on second behind mean, six of remaining

Pedro Heilbron

would I what say started year. reason in the Alejandro, experiencing recovery than we we earlier recovery one faster a expected demand when capacity or Yes, number that is

that number those for, aircraft, own expensive. is So paid of well, very and And not one. they’re was number that two all, first

So rest seat the cost time, is reliability the the have equivalent the same XXX. same they at to per the fleet. the of great of And

of cost short the and it as cost is be of those even – insurance aircraft the the keeping very nothing if was could aircraft, high. So

bets. So we’re just hedging our

José Montero

us. for Flexibility

Alejandro Zamacona

Got so Thank it. Okay, guys. you much

José Montero

Alejandro. Thanks,

Operator

Your with next Syth Raymond is the question Savi James. from line of

Savi Syth

Hey, Good morning.

lot revenue kind a of not capacity sequential seeing the yields? on to moving XQ, a two-year you implies leisure weak you’re back about XX compression are to improving, where it’s XQ. your kind function that yield you’re capacity kind points of seasonally guidance, but just Is Is of compared a XQ that basis, over is it in XX more significant because from year XQ of a points. bringing on given Just is of it revenue your your improving in by improving just and

why wondering was. was I that So

José Montero

Yes, Savi.

you hitting there. So very this is head the believe José here. I well

capacity adding versus to earlier, traffic XX% QX in that is Pedro of are in line. alluded same We QX, as

indeed that to gap simply ramp-up this is about quarter, of that important And it. of the that is What and is are rebuilding not allow of frequency the about destinations very is development its say seeing would capacity a believe with of it yields, Hub to in a So is sort there future maintaining we Hub. grow. ourselves ramp-up we it’s the I and a the

transitional indeed there we’ll sort we basis, is yield make And a capacity percent quarter, that especially is like on the you what, latter are know it during So the the of part the required. seeing especially quarter, the but in to if quarter. a part of reduction adjustments a of latter

So we capacity way are putting being in are very we that forward. the flexible out our

Savi Syth

you sense. bit. said And a Makes just little

in South I just talking talked about think competition, like been earlier term in but on Northern They’ve XX to XX from America the expanding I Pedro Mexico, Salvador. was about or wondering Rica to there, Costa aircraft and deploying medium Volaris. one either

wondering, here, about to and you small your against that extent what able maybe just the Copa but the from markets how market? be excursions potential talked into will serve, that’s you Just answer Volaris to defend

Pedro Heilbron

yes, you Pedro part Savi, the Well, answer. provided Yes. of here. And

legacy the and LCCs airlines seen have the pandemic from many growth from We the competitors, from we’ve U.S. etc. from U.S., America, since Latin both started,

the are past few repeating that’s of The been months. So for not kind new. news

at XX% $X.XX be José reach successful, be going going which are CASM from planning not as – hopefully is, day, XXX%, when back our keeping possible. we’re to we’re we pandemic come should below pre-pandemic that And that we of makes cost mentioned, which and to ends what focusing as we’re CASM, is at too out but hoping far now. the on as be pandemic, to we’re us one the one, at We’re low when

that not connecting – served going be at is but too how be America, high to We’re that it’s And the because pandemic, to strength markets. a many start XX% also of markets of serve to least directly. of the and also large of – able – penny quite before so not markets because taxes you the small while. money. we That’s are intra-Latin a for size fees nonstop traffic pay in passenger change to the the the not after has market, small over of The our Hub markets only connect charging of are to amount our hard are stimulate a airport

new to kind those it’s traffic of stimulate So with cost. hard

of also a We alliance Star part we’re have with and Alliance. strong – United

remain competition all we we more we So though think the to do have successful many place pieces in others. from expect even

Savi Syth

Appreciate Thanks, it.

José Montero

Savi. you, Thank

Operator

of next Barclays. Monsivais is Your of Pablo line question the from

Pablo Monsivais

question. Good for my Thanks morning. Hi, taking

of follow-up on Just a the a first kind question.

be were that would to extent And estimate and vaccination guess? leisure related a question If to do best demand one, over how capacity you was you to the your what help recovery kind of quarter? among think tourism VFR, that what

José Montero

was I’m – seeing. sorry, half start followed – bit is by demand leisure, that where seeing VFR. say would we’re we been about X/X. driven that that before type I leisure is of Pedro sorry, the little travel a terms mentioned of that leisure half And the Pablo, by to than by it VFR say, of I as about pandemic. down, before, will followed now we’re the half then in what versus And breakdown right I’m business the saying, VFR I traffic want it’s is in less then and almost of by yes, half have

But to course, again, we So now. now our over taught traffic. things breakdown seeing maybe us of XX% change represents of are it right has the total that XX% that That’s pandemic the time.

what we the have as of picture that today. So is this

Pedro Heilbron

– from U.S., us for, of available end U.S. terms when in April, impossible in an vaccines were toward it’s increase sometimes U.S. to the tourism And the traffic kind to of obviously there people for reasons the vaccine know the the was but in travel openly of

available that have a to led and obviously or And one continue know, slowing But get we’re countries market thing in strong on that’s more not one believe to us you vaccinated, as particular expect now right people that vaccines tied other. are very as network one seeing and that we a Latin So sector. is there’s to the we dependent particular an Roche, slowdown initial as down. American

So on keep our we’ll strengths. network leveraging and those rebuilding

Pablo Monsivais

Okay, very much. Thank you

José Montero

you, with Subin is Operator the from Your Stifel. Pablo. Thank Bert next line question of

Bert Subin

Good morning.

a to fully percent reopened your your today, current As question, of What you few remain are restrictions over if from we but you XXXX quarters capacity? a how Hunter’s would that things removed. follow-up if think beyond your capacity not upper countries giving add you’re continue the they limit is capacity I capacity guide as know changed, Clearly, what all that nothing is XQ, on to fly? today? And we say here? were to assume should about If fair to next could it

Pedro Heilbron

Yes.

we here. that we operating. pre-pandemic, – compare aircraft. XXXX, were we which XX So included end MAX six Were we’re If were – XXXX, we had X, operating as We of to to by grounded let’s know. but the XXX, say, Pedro not

XX Copa we by few in as deliveries desert, that Holdings XXXX. have of that end end a have We But in in five the – the reactivate. Copa as XX operated can of XXXX. by XXXX, first – in then of will MAX we’ll which by have the Holdings. have nine happen to So we XXXX, XXXX, still the And we part might

mostly that returns, we will lease we’re to – going or we how decide our take higher NGs operating sold leases. we so we’ve So we’re many and of XXX so to us the Embraers. also because then guiding some not renew to to have the higher Embraer-XXXs, that’s gauge aircraft now much of a And MAX than we’re are gauge those have going which X, return

the and sometime end could be XXXX, year, in close will can now, XXX%, the we toward half So at be shortly, some ASMs. right time this of the to XXs not high we by but in of we second XXX% be

José Montero

the sort be for And we not if trends them – of Bert, for providing could But costs, guidance if of go that quarter terms unit cost in our fourth to, range. in the quarter. we the low are on in we’re demand way fourth expect $X.XX in

Bert Subin

– update this, give you very Maybe That’s find your of can fleet Okay. along you us that thinking showed presentation but could just the on same you’re to had helpful. two sort going been chart just an of of in be vein, term, pandemic. your investor about able to sort Thank pull I during good starting wish how one to longer Are you a had refocus your you proving clearly fleet very highlighted lines, down, you one up Demand nice flexibility, and much. just pretty seems a has maybe longer-term your the lever be to resilient. I growth? which on

Pedro Heilbron

Yes.

we’ve we’re is And is the cautious learned that until because it know that virus it’s So happens. really something know unpredictable. still this much even that people don’t

in to back So right And move some to time, we’re now the deliveries. if being our very them we’re see bringing Boeing expected can from even cautious, been a nine we pace but year. desert at reactivating earlier same the the MAX talking we’ve aircraft, at much faster forward than we what

right So to coming have lease due And in NGs over we’re four in three those now. XX the years. we flexibility discussions next of the

we could MAX So returning. I bring or Xs. NGs could guess We renew forward

of a enough lot three the retain levels we flexibility And We’re hope we to capacity years. above to to in had have ASM the next going in pre-pandemic. grow

Bert Subin

Thank you.

José Montero

Thank you Bert.

Operator

question is the Your from of next line with McKenzie Seaport Dan Global.

Dan McKenzie

Thanks, questions here. A morning guys. couple Good of

the vaccine countries versus recover. really So question for you ties travel rollout serve business the first across your network, expectation to to the

has So every a vaccine different course. I got rollout, of country think

network, when markets would the is just you it what next vaccinated. that for were take Or of fully to it But early is coincide for the I’m is whole mid What your XXXX? average sometime does can wondering question, expectation? early lag into business be expectation it recover of along of earlier those Is it? your some ahead for Or rollouts, you it kind an – to it Brazil what or that various to tie that the XXXX XXXX? really vaccine what lines? And If related by rollout? Or rollout, Does share travel year. with are then year-end?

Pedro Heilbron

In Panama, have up. it first that for by month month So a now, a so I’ll a that let the wants of and vaccine from me will at to back example, anyone the vaccine. take we think shot September, José access

to XX% month, vaccinated are But right in to weekly vaccines in we that And I’m also Latin get countries most would vaccinated. now. Colombia just way to be basis. It about pace I on are think We in And going in anyone able in the be America. wants it’s at a sorry, – what coming very XX% fast vaccinated, gaining that a steam seems from get know. a

that end of hope population wants end of coming of that terms year, so the by the corporate, will vaccinated. So, the the fourth vaccinated to to get trouble I countries be quarter, the in degree by And the would back. the

from U.S. of exactly sooner small same to they’ll So major international going same be traveling made of we and that Latin up out. multi-Latin companies how larger are cannot start we’ve some a really after pre-pandemic. going – is same traveling percentage of the those And or regional America heard of that’s before summer, it predict in corporations, probably play companies. the but lot that the American start the won’t we rate than think I the know at Also, accounts in but the than to

José Montero

there, mentioned those in Dan, the accounts. just And the big work the component in for that Yes. corporate believe, a that big shorter companies. who sort or owners Copa air small travels get traveler we there’s will on than of as folks business small a that business add, term back I’d very Pedro people

Dan McKenzie

sense. makes That Yes.

quarantines. help think, really ties any of of way my related And does to outlook? of vaccine second are that the that back, the Savi’s, question how I like if for and on an if gets testing And Europe us tie second bypass corporate it stronger embedded back yields so it’s looking as a for potentially you weaker guess, be question understand countries wondering I’m as a a I not yield to, It model and then to toward kind just that, the there revenue quarter. can that into to, and America two-pronged to quarter? travel So happened initially question. I open, quarter then Latin what third a in mean passport the third requiring just kind the quarter really kind might earlier the where of in sounds here, to expectation to how comes end? third

José Montero

all, the part second third of and I used that was, quarter started was the was it mostly into Pedro Yes, beginning, was store quarter think function in there for think to Mexico. toward the tourists opening the second latter some of first U.S. the items a that certain in than but the several we of as before, I say open especially there are in I in more also and and quarter, the the was, mentioned the of Caribbean think, countries an of as vaccine

here, during of that So in And is quarter. a I of created, think, a demand again there putting is that third is of gap. thing it the was we’re that bump third a capacity in quarter. the mostly of quite the where we’re we’re the however, additional little the seeing also part quarter, is bit we that saw. right in bit specifically, latter And what that third the that the quarter into second But important now seeing latter quarter

rather that’s, I related what quarter the the think, a weakness, to think a adding it’s necessarily but I the seeing network back. now. I we’re into fact story So in we story the order of right to capacity think network in are that third not build And

Dan McKenzie

a as or Europe America And requiring a for any vaccine at opening then requiring Latin model looking passport? countries

Pedro Heilbron

has tried bit. about There good be yet. with proven decision the surprised, a talked a be not no been method are that but and up, Travel good happened, quite a yet. opening of would one some get opening however, on are of of going IATA way that I no out but It’s especially made to Pass, up, passports announced the digital has as one that trials

Daniel Tapia

Thanks.

Pedro Heilbron

Dan. you Thank,

Operator

the And line question Mike will with Bank. Deutsche your final Linenberg of come from

Mike Linenberg

question Hey, holding Everybody. Pedro Alejandro about six response XXX-XXXs. earlier to on the

that third a reason two recognize having I smaller you that was of reasons. gave gauge maybe You thought airplanes the maybe around. And actually some importance

the consideration? at on it road markets. I’m that wasn’t the the reliance may a a I Panama sounds down smaller just airplane. had potentially mentioned the actually small Or be looking curious, like of maybe think you hub you gauge strength And and that but

thoughts that. on Just

Pedro Heilbron

a was It not consideration. interesting So it’s an question.

routes. six to – up thinner the going a the fly smaller However, XXXs of are the network made

E-XXXs to the we adds and to staying aircraft those actually with the where exclusively before operate XXXs. we’re going So had of that value operating

Mike Linenberg

other, double-take a on on a Copa seem maintain you’re is minutes itineraries see one-stop in over basis, sense. those a wing Makes in it Latin MAX tip you’re a two, curious And AXXX the Okay. namely And that does look when of actually seen position bigger like planes through itineraries I MAX I then not nine XXX, you airplanes. going not basis, of talk a South that good service, got pull-down And completely the suggest think this, We’ve is Panama I have a can’t throughout – the nine America, think maybe disappeared. not that’s the one. America by are about there the IATA Panama. consider round I’m I – there’s you lot that with itineraries. do lot that within yet And it Panama America, have some now an the City, bit holidays, into a trips, a suspect was go of much I each picking – that telling And to a because is would respect I share that flying Miami doing of passengers up big everybody around mean and or tied not trips, pre-COVID, airplane do How so flying you’re And enough. isn’t Miami to now. your because see that have you’re think Miami, to of Panama lot if of I buy they’re to almost surprised I of again, Number which some round you’re you I who wants lot that mean, Miami running to And Panama frequency you to or X. Number XXXs, to to because, service South a largest where pandemic. had I’m to carriers going been even nonstop I or would you taking significant about Xs? go very hear to of but how broken between just that think I thought restructuring. out you’ve but

question the in So picked about of sort of XXX a the of MAX two-pronged you up struggles meantime may competitors the region. in XX and/or have your share that because

Pedro Heilbron

Yes.

aircraft, said – Mike, well, think we and the larger The stuff as lot in question. your we simple a possible. you us past, what try things have gauge of as of – to as so we in and So know keep

we There’s It’s XXXs as as So simple. single we Right XXX X. and mainly possible. can have now, commonality, are thing. operator, exclusively NG the whole XXX much very a a simple fleet pilot MAX

sacrifice efficient better We sometimes that XX in very just we network. one ideal few the going a would bring in, gauge or some the markets needs that to to wing narrow-body, we’re than ideal the in make facilitates rather it a more And going etc. having having knowing aircraft mentality. having just to in in exchange we’re that the something Miami, if than the run fleet. route, tips more for markets, single sense the keep And fleet whole for And is MAX

to that’s to each a we’re same future aircraft, any philosophy hard question, which Commonalities, gauger the decision ideal do. drive of kind what smaller your So that. for which that that’s waiting going about simplicity aircraft is was is market, And first to versus drive always. also going

broken the we’re of mode terms ourselves. in recovery itineraries, a In

rebuilding and late our which So connectivity, network we’re six-bank our in started June.

that But advantage in So recovery mode. take fit hub that of model. any are opportunities that we we’ll single

lot be come say a own restructuring. other some the when of everything, So taking I that carriers out that full we their will of cannot covered we’re of of know advantage plus that service

we about rational be want So to that. also

Mike Linenberg

Okay, very everyone. good. Thanks

Pedro Heilbron

Thanks, Mike.

Operator

time. no are further There questions this at

Pedro Heilbron

Okay.

all. next So thank great This your Have Thank See the great call. our rest Thank concludes for support. you earnings a for you week. you participating. a you of day continued and time.

Operator

for presentation gentlemen you And This thank you and may concludes you have Ladies now participation. day. wonderful disconnect. the

Copa (CPA) 7 Aug 212021 Q2 Earnings call transcript