2Q26
Filed Aug 7, 2026Copa Holdings Reports Second-Quarter Financial Results
Operating revenue increased 25.7% and RASM increased 7.9%, but an 84.8% increase in average fuel prices drove fuel expense up 110.0%, reducing operating margin to 8.7% from 21.7% and net profit to US$68.2 million from US$148.9 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total Operating Revenueother | 1,059,334 (In US$ thousands) | 0.7 % | 25.7 % |
| Passenger revenueother | 1,002,609 (In US$ thousands) | (0.2 %) | 25.8 % |
| Cargo and mail revenueother | 34,183 (In US$ thousands) | 14.9 % | 20.8 % |
| Other operating revenueother | 22,541 (In US$ thousands) | 21.9 % | 32.4 % |
| Total Operating Expenseother | 967,676 (In US$ thousands) | 21.9 % | 46.8 % |
| Fuel expenseother | 449,552 (In US$ thousands) | 59.2 % | 110.0 % |
| Wages, salaries, benefits and other employees' expensesother | 131,364 (In US$ thousands) | (4.6 %) | 7.4 % |
| Passenger servicingother | 29,028 (In US$ thousands) | 3.2 % | 15.2 % |
| Airport facilities and handling chargesother | 77,315 (In US$ thousands) | (2.4 %) | 19.6 % |
| Sales and distributionother | 57,388 (In US$ thousands) | 4.7 % | 16.1 % |
| Maintenance, materials and repairsother | 42,071 (In US$ thousands) | (9.7 %) | 16.4 % |
| Depreciation and amortizationother | 107,539 (In US$ thousands) | 6.8 % | 21.6 % |
| Flight operationsother | 42,825 (In US$ thousands) | 4.2 % | 30.7 % |
| Other operating and administrative expensesother | 30,593 (In US$ thousands) | 32.5 % | 16.2 % |
| Operating Profit/(Loss)other | 91,658 (In US$ thousands) | (64.6 %) | (50.0 %) |
| Operating Marginother | 8.7 % | -15.9 p.p | -13.1 p.p |
| Total Non-Operating Income/(Expense)other | (14,377) (In US$ thousands) | 24.1 % | 58.3 % |
| Finance costother | (28,179) (In US$ thousands) | 9.1 % | 21.0 % |
| Finance incomeother | 16,533 (In US$ thousands) | 2.8 % | 7.5 % |
| Profit before taxesother | 77,282 (In US$ thousands) | (68.7 %) | (55.6 %) |
| Income tax expenseother | (9,107) (In US$ thousands) | (73.7 %) | (63.9 %) |
| Net Profit/(Loss)other | 68,175 (In US$ thousands) | (67.9 %) | (54.2 %) |
| Net Marginother | 6.4 % | -13.8 p.p | -11.2 p.p |
| Basic Earnings Per Share (EPS)other | 1.67 | -67.7 % | -53.9 % |
| Revenue Passengers Carried (000s)other | 4,138 | 1.0 % | 14.9 % |
| Revenue Passengers OnBoard (000s)other | 6,176 | 2.7 % | 15.1 % |
| RPMs (millions)other | 7,936 | 2.3 % | 15.7 % |
| ASMs (millions)other | 9,150 | 2.9 % | 16.5 % |
| Load Factorother | 86.7 % | -0.5 p.p | -0.6 p.p |
| Yield (US$ Cents)other | 12.6 | (2.4) % | 8.7 % |
| PRASM (US$ Cents)other | 11.0 | (3.0) % | 8.0 % |
| RASM (US$ Cents)other | 11.6 | (2.2) % | 7.9 % |
| CASM (US$ Cents)other | 10.6 | 18.5 % | 26.0 % |
| CASM Excl. Fuel (US$ Cents)non-GAAP | 5.7 | (1.5) % | (0.1) % |
| Fuel Gallons Consumed (millions)other | 105.0 | 2.3 % | 14.2 % |
| Avg. Price Per Fuel Gallon (US$)other | 4.28 | 56.8 % | 84.8 % |
| Net Debt to EBITDAnon-GAAP | 0.9 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Passenger revenueA 15.7% increase in RPMs and an 8.7% increase in passenger yield. | US$1.0 billion | (0.2 %) | 25.8% |
| Cargo and mail revenueHigher cargo volumes, including the full-year effect of a second freighter. | US$34.2 million | 14.9 % | 20.8% |
| Other operating revenueAn increase in ConnectMiles revenues from non-air partners. | US$22.5 million | 21.9 % | 32.4% |
2026 outlook
- NoteCapacity – YOY ASM growth: 14-15%
- NoteOperating Margin: 17-19%
- NoteLoad factor of approximately 87%
- NoteUnit revenues (RASM) of 12.0 cents
- NoteUnit costs excluding fuel (Ex-Fuel CASM) of approximately 5.7 cents
- NoteAll-in fuel price of US$3.60 per gallon
Capital returns
- Share repurchase: 45,004 (In US$ thousands) for the six months ended 2026.
- Dividends paid: 140,661 (In US$ thousands) for the six months ended 2026.
- The Board of Directors ratified its third dividend payment for the year of US$1.71 per share on August 5, 2026.
- Dividends will be paid on September 15, 2026, to shareholders on record as of August 31, 2026.
What drove it
- Operating revenue increased 25.7%, driven by 16.5% capacity growth and a 7.9% year-over-year increase in RASM to 11.6 cents.
- Passenger yields increased 8.7% year over year to 12.6 cents.
- The Company took delivery of 4 Boeing 737-MAX 8 aircraft, ending the quarter with a total fleet of 131 aircraft.
- Copa Airlines reported on-time performance of 90.6% and a flight completion factor of 99.8%.
- The transition from six to eight connecting banks at the Hub of the Americas® is scheduled to start in March 2027.
- The Company expects to complete installation of Starlink Wi-Fi across its entire fleet by the first half of 2027.
Concerns
- Average fuel price per gallon increased 84.8% year over year to US$4.28.
- Fuel expense increased 110.0% year over year to 449,552 (In US$ thousands).
- Total operating expense increased 46.8%, outpacing the 25.7% increase in operating revenue.
- Operating margin declined by 13.1 percentage points year over year to 8.7%.
- Travel patterns were temporarily affected by the World Cup during June, resulting in a lower June load factor and an estimated 0.1-cent impact on quarterly RASM.
- Load factor declined by 0.6 percentage points year over year to 86.7%.
What to watch
- Execution against 2026 operating-margin guidance of 17-19% amid elevated and volatile fuel prices.
- Delivery of 14-15% capacity growth in ASMs compared to 2025.
- The all-in fuel price assumption of US$3.60 per gallon in the 2026 outlook.
- The March 2027 start of the eight-bank Hub of the Americas® structure.
- Completion of Starlink Wi-Fi installation across the fleet by the first half of 2027.
Balance sheet and cash flow
- Cash and cash equivalents: 266,825 (In US$ thousands) at June 2026, compared with 382,554 (In US$ thousands) at December 2025.
- Short-term investments: 996,411 (In US$ thousands) at June 2026, compared with 955,604 (In US$ thousands) at December 2025.
- Long-term investments: 280,188 (In US$ thousands) at June 2026, compared with 248,579 (In US$ thousands) at December 2025.
- Total cash and cash equivalents and investments as of June 30: $ 1,543,424 (In US$ thousands).
- Loans and borrowings: 202,245 (In US$ thousands) at June 2026; loans and borrowings long-term: 2,069,350 (In US$ thousands).
- Net cash flow from operating activities: 617,897 (In US$ thousands) for the six months ended 2026, compared with 484,282 (In US$ thousands) for 2025.
- Net cash flow used in investing activities: (799,513) (In US$ thousands) for the six months ended 2026.
- Net cash flow from/(used in) financing activities: 65,887 (In US$ thousands) for the six months ended 2026.
- Net (decrease) in cash and cash equivalents: (115,729) (In US$ thousands) for the six months ended 2026.
- Net cash flow related to advance payments on aircraft purchase contracts: (340,399) (In US$ thousands) for the six months ended 2026.
- Acquisition of property and equipment: (375,769) (In US$ thousands) for the six months ended 2026.
Analysis
Copa reported a substantial revenue expansion in 2Q26, with total operating revenue of US$1.1 billion, up 25.7% year over year. Passenger revenue increased 25.8% to US$1.0 billion as RPMs rose 15.7% and passenger yield increased 8.7%. Capacity increased 16.5%, while RASM increased 7.9% to 11.6 cents. Load factor was 86.7%, down from 87.3% in 2Q25, with management citing a World Cup-related effect on June travel patterns and an estimated 0.1-cent impact on quarterly RASM.
Fuel was the defining earnings pressure. Average fuel price per gallon rose 84.8% to US$4.28, driving fuel expense up 110.0% to US$449.6 million. Total operating expense increased 46.8% to US$967.7 million, materially faster than revenue. CASM increased 26.0% to 10.6 cents, while CASM excluding fuel decreased 0.1% to 5.7 cents, indicating that the cost escalation was concentrated in fuel rather than underlying ex-fuel unit costs.
The result was a sharp reduction in profitability. Operating profit was US$91.7 million, down 50.0% year over year and 64.6% from 1Q26, while operating margin declined to 8.7% from 21.7% in 2Q25 and 24.6% in 1Q26. Net profit was US$68.2 million and basic EPS was US$1.67, compared with US$148.9 million and US$3.61, respectively, in 2Q25. The Company stated that approximately 40% of second-quarter bookings had already been sold before fuel prices increased, while stronger demand and yields enabled recovery of approximately 40% of the year-over-year increase in fuel expense.
Liquidity remained substantial, with total cash and cash equivalents and investments of US$1.5 billion as of June 30 and a Net Debt-to-EBITDA ratio of 0.9. For the six months ended 2026, operating cash flow was US$617.9 million, while aircraft advance payments and property-and-equipment acquisitions totaled US$340.4 million and US$375.8 million, respectively. The Company also reported US$45.0 million of share repurchases and US$140.7 million of dividends paid during the six-month period, and ratified a US$1.71-per-share dividend payment.
For 2026, Copa updated its outlook to operating margin of 17-19% and ASM growth of 14-15% compared with 2025. The outlook assumes approximately 87% load factor, RASM of 12.0 cents, ex-fuel CASM of approximately 5.7 cents, and an all-in fuel price of US$3.60 per gallon. The guide places fuel cost, unit-revenue realization, and execution on planned capacity growth at the center of the full-year earnings trajectory.
Not in the filing
stated, not guessed- Previous-period outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- Gross profit and gross margin were not reported.
- Diluted EPS was not reported.
- Non-IFRS net profit and non-IFRS EPS were not reported.
- Quarterly operating cash flow was not reported; cash flow was reported for the six months ended 2026.
- Free cash flow was not reported.
- Revenue guidance was not reported.
- Operating-expense guidance was not reported.
- Tax-rate guidance was not reported.
- Named executive quotes were not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.