Copa Holdings Reports Earnings of US$30.4 Million and EPS of US$0.70 for 2Q08

    PANAMA CITY, Aug. 14 /EMWNews/ -- Copa Holdings, S.A.

(NYSE: CPA), parent company of Copa Airlines and Aero Republica, today

announced financial results for the second quarter of 2008 (2Q08). 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 US GAAP. Unless otherwise stated, all

comparisons with prior periods refer to the second quarter of 2007 (2Q07).



    OPERATING AND FINANCIAL HIGHLIGHTS



    -- Copa Holdings reported net income of US$30.4 million for 2Q08, or

diluted earnings per share (EPS) of US$0.70, as compared to net income of

US$30.9 million or diluted EPS of US$0.71 in 2Q07.



    -- Operating income for 2Q08 came in at US$31.2 million, as compared to

operating income of US$39.0 million for 2Q07. Operating margin decreased

from 16.6% to 10.5%, maintaining its position among the world's most

profitable airlines. These strong results were achieved despite US$37.0

million in additional fuel costs as a result of a 56% increase in the

all-in average price per gallon of jet fuel.



    -- In 2Q08, total revenues increased to US$297.9 million, representing

growth of 26.6 %, on an 11.3% capacity expansion. Yield per passenger mile

increased 9.6% to 18.0 cents and operating revenue per available seat mile

(RASM) increased 13.7% to 14.2 cents.



    -- Revenue passenger miles (RPMs) increased 15.8% from 1.35 billion in

2Q07 to 1.56 billion in 2Q08, and available seat miles (ASMs) increased

11.3% from 1.88 billion in 2Q07 to 2.09 billion in 2Q08, with the Copa

Airlines segment increasing 17.2% year-over-year and Aero Republica

decreasing 10.2%, mainly as a result of its down-gauge to an Embraer-190

fleet.



    -- Consolidated load factor increased 2.9 percentage points to 74.5%,

driven by a year-over-year load factor improvement at both Copa Airlines

and Aero Republica.



    -- Operating cost per available seat mile (CASM) increased 22.1%, from

10.4 cents in 2Q07 to 12.7 cents in 2Q08. CASM, excluding fuel costs,

increased 6.9% from 7.3 cents in 2Q07 to 7.8 cents in 2Q08, mainly due to

an increase in Aero Republica's unit costs driven by timing of maintenance

events, Colombian currency appreciation and down-gauging to an Embraer-190

fleet.



    -- Liquidity including cash, short term and long term investments plus

committed credit lines ended the quarter at US$347.2 million, representing

30% of last twelve months revenues.



    -- On May 24, Aero Republica continued its international expansion by

initiating new direct daily service to Caracas, Venezuela, from the

Colombian cities of Bogota and Medellin. Aero Republica currently provides

service to 12 cities in Colombia as well as international connectivity with

Copa Airlines' Hub of the Americas from the cities of Bogota, Bucaramanga,

Cali, Cartagena and Medellin.



    -- On June 30, Copa Airlines announced that it will begin service from

Panama and connecting cities to Belo Horizonte, Brazil, beginning August

21, 2008. More recently, Copa Airlines announced new service to three

additional destinations: Oranjestad (Aruba), Valencia (Venezuela) and Santa

Cruz (Bolivia). By year-end, Copa Airlines' network is expected to serve 45

destinations in 24 countries in the Americas.



    -- During the second quarter, Copa Airlines took delivery of three

aircraft, two Embraer-190's and one Boeing 737-800, ending the quarter with

40 aircraft. Copa Holdings ended the second quarter with a consolidated

fleet of 53 aircraft.



    -- For 2Q08, Copa Airlines reported an on-time performance of 89.3% and

a flight-completion factor of 99.7%, maintaining its position among the

best in the industry.








    Consolidated Financial

     & Operating Highlights   2Q08    2Q07     % Change      1Q08   % Change

    RPMs (millions)          1,559   1,346      15.8%       1,619      -3.8%

    ASMs (mm)                2,093   1,880      11.3%       2,077       0.8%

    Load Factor              74.5%   71.6%   2.9 p.p.       78.0%  -3.5 p.p.

    Yield                     18.0    16.4       9.6%        17.3       4.1%

    PRASM (cents)             13.4    11.8      14.1%        13.5      -0.5%

    RASM (cents)              14.2    12.5      13.7%        14.2      -0.1%

    CASM (cents)              12.7    10.4      22.1%        11.8       8.4%

    CASM Excl. Fuel (cents)    7.8     7.3       6.9%         7.7       0.9%

    Breakeven Load Factor    64.6%   59.3%   5.3 p.p.       64.6%   0.0 p.p.

    Operating

     Revenues (US$ mm)       297.9   235.3      26.6%       295.9       0.7%

    EBITDAR (US$ mm) (1)      66.7    61.7       8.1%        75.9     -12.1%

    EBITDAR Margin (1)       22.4%   26.2%  -3.8 p.p.       25.6%  -3.2 p.p.

    Operating

     Income (US$ mm)          31.2    39.0     -20.0%        51.7     -39.7%

    Operating Margin         10.5%   16.6%  -6.1 p.p.       17.5%  -7.0 p.p.

    Net Income (US$ mm)       30.4    30.9      -1.5%        39.5     -23.0%

    Net Margin               10.2%   13.1%  -2.9 p.p.       13.3%  -3.1 p.p.

    EPS - Basic (US$)         0.70    0.72      -2.4%        0.92     -23.3%

    EPS - Diluted (US$)       0.70    0.71      -1.5%        0.91     -23.0%

    Weighted Avg. # of

     Shares - Basic (000)   43,195  42,817       0.9%      42,985       0.5%

    Weighted Avg. # of

     Shares - Diluted (000) 43,465  43,502      -0.1%      43,433       0.1%

    (1) EBITDAR (earnings before interest, taxes, depreciation,

amortization and rent) is presented as supplemental information because we

believe it is a useful indicator of our operating performance and is useful

in comparing our performance with other companies in the airline industry.

However, EBITDAR should not be considered in isolation, as a substitute for

net income prepared in accordance with US GAAP or as a measure of a

company's profitability. In addition, our calculations may not be

comparable to other similarly titled measures of other companies. A

reconciliation of EBITDAR to consolidated net income is attached to this

press release.



    Full 2Q08 earnings release available for download at:

http://investor.shareholder.com/copa/results.cfm






    2Q08 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

    Date:              August 14, 2008

    Time:              11:30 a.m. EDT (10:30 a.m. Panama Time)

    Conference Call:

    Telephone Number:  877-681-3373  (U.S. Domestic Callers)

                       719-325-4908  (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 international airline

passenger and cargo service. Copa Airlines currently offers approximately

136 daily scheduled flights to 41 destinations in 22 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 and Medellin.



    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



    EBITDAR (Figures in US$ thousands)        2Q08        2Q07        1Q08

    Net Income                             $30,431     $30,905     $39,499



      Interest Expense                     (9,815)    (10,393)    (10,980)

      Capitalized Interest                     484         736         521

      Interest Income                        2,596       3,031       2,768

      Income Taxes                         (3,507)     (3,839)     (4,104)

    EBIT                                    40,674      41,370      51,295



      Depreciation and Amortization         10,433       8,457      10,000

    EBITDA                                  51,107      49,827      61,295



      Aircraft Rent                         12,012       9,303      10,673

      Other Rentals                          3,610       2,575       3,883

    EBITDAR                                $66,729     $61,706     $75,851





    CPA-G