Rafael Arias - Director of Investor Relations Pedro Heilbron - Chief Executive Officer and Director Jose Montero - Chief Financial Officer

Hunter Keay - Wolfe Research Helane Becker - Cowen Duane Pfennigwerth - Evercore ISI Bernardo Velez - GBM Savanthi Syth - Raymond James Michael Linenberg - Deutsche Bank Márcio Prado - Goldman Sachs Ronaldo Salmon - Itau BBA Dan McKenzie - Buckingham Research Kevin Kaznica - Citi Group

Thank you very much, Tamara. And welcome everyone to our second quarter earnings call.

Joining us today are Pedro Heilbron, CEO of Copa Holdings and Jose Montero, our Chief Financial Officer. First Pedro will start with our second quarter highlights, followed by Jose, who will disclose our financial results.

Immediately after, we will open up the call for questions from analysts. Copa Holdings second quarter financial results have been prepared in accordance with international financial reporting standards.

In today’s call, we will disclose non-IFRS financial measures. A reconciliation of the non-IFRA to IFRS financial measures can be found in our second quarter earnings release, which has been posted on the company’s website, copa.com.

In addition, our discussion will contain forward-looking statements not limited to historical facts that reflect the company's current beliefs, expectations, and/or intentions regarding future events and results. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, and are based on assumptions that are subject to change.

Many of these risks and uncertainties are discussed in our Annual Report filed with the SEC. Now, I would like to turn the call over to our CEO, Pedro Heilbron.

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

As you know, our financial results came in softer than the market expected, mostly as a result of a weaker demand environment particularly in the month of June. Considering the sub demand environment, we continue to be proactive in making adjustments to our network, continue to focus on controlling cost and delivering a superior product.

At the same time, we remain confident in the long-term strength of our business model and our competitive advantages. So we fully expect come out ahead of this economic cycle as an even stronger outline.

Among the key point for the quarter, revenues were significantly impacted coming in 20% lower year-over-year. In fact, our unit revenues decreased 24% year-over-year driven by four percentage point drop in load factor and a 20% reduction in yields.

At the same time, we achieved lower unit cost as CASM decreased 15% from $10.7 to $9.1 and our CASM ex fuel makes came in 6% lower at $6.2. This led to an operating margin of 9% for the quarter.

On July 1, we successfully launched ConnectMiles a new loyalty program. We delivered on time performance of 90% during the quarter among the best in the industry.

In fact, Copa Airlines was recently recognized by flights test for best on-time performance and flight completion in Latin America for the first half of 2015. We’re very proud to receive this recognition as this is one of our key operational KPI and the Copa team works hard day-in and day-out to ensure that our passengers consistently arrive to their destinations on-time.

The second quarter has historically been our weakest quarter in the year in terms of revenue performance. However, our current forecast of just at the second half of the year will come in weaker than originally anticipated and not too different from the second quarter in terms of RASM.

This weaker expect the results come as to the economies of Latin America particularly in South America, fuel don’t shows signs of recovery and currencies have devaluated further against the U.S. dollar affecting overall demand for our travel both in business [indiscernible] markets.

Currently, the main market affected our Venezuela, Brazil and to a lesser extent Columbia. In Venezuela, yields were down significantly year-over-year first from the dollarization of sales that begin in the second half of last year and on top of that in June we saw demand weakness driven primarily by further economic deterioration.

Brazil’s revenue weakness mainly comes from further economic slowdown and currency devaluation. We reduce capacity in this market by 18% as of June when compared to January of 2015, which was our peak month in terms of capacity to Brazil.

Despite that, we still saw material year-over-year drop in load factor and yields in June. Colombia’s demand hasn’t been affected as much, as load factors remain similar to last year.

However, yields are down significantly due to currency devaluation about 35% and some additional competitive capacity. Even though the economy has slowed down from 5% gross last year, it is still expected to gross approximately 3% this year, so Colombia is less affected than Venezuela and Brazil.

Passengers originating in these three markets represented almost 40% of our O&D revenues down from approximately 50% last year during the same period and it appears that the economic slowdown and currency weakness described will persist throughout the third quarter and potentially for the rest of the year. In terms of our overall advanced bookings for the third quarter, we see load factor trends flat to slightly down versus the prior year, which is obviously much better than the four points drop in Q2, but with the yields slightly lower quarter-over-quarter.

We also see continuing price pressure as competitors try to capture traffic in a softer demand environment. For these reasons, we have reduced our unit revenue guidance for 2015 from $0.114 to $0.105.

Given that this affected countries fit passengers to flight from other markets, we continue to review our network in order to optimize profitability, we have made some capacity reductions in specific markets and are now expecting 2015 capacity growth of approximately 5%. Nevertheless, we will be in a position to add back some of the capacity once markets improve again.

Regarding new destinations, we continue to look for opportunities to expand and strengthen our network and hub serving unique markets that lag connectivity to our region. We have already launched New Orleans and also this month we launched Puebla and Villahermosa, our fifth and sixth destinations in Mexico.

Furthermore, we announced a new daily-flight to San Francisco beginning in September and two weekly frequencies to Belize beginning in December. The additions of San Francisco and Belize were possible due to the redeployment of capacity from Brazil and other markets.

In terms of fleet, this year we have nine deliveries all in new Boeing 737-800. Specifically during the second quarter, we received two new 800s, returned one leased 700 and subleased one 700 to United.

We subleased an additional 737-700 to United in July. For the remainder of the year, we expect to receive six more 737-800s and returned three EMBRAER-190 with expiring leases.

Turning now to our new loyalty program, we successfully launched, ConnectMiles on July 1. Early consumer response has been very positive.

As we have surpassed initial expectations for enrollment and member adoption. ConnectMiles provides Copa a powerful tool to strengthen our customer relationships, improve customer service and extend special benefits and recognition to our most-frequent fliers.

Because of our membership in Star Alliance, our ConnectMiles members will continue to have earning and redemption access to the world. We are very excited about the beginning of our own loyalty program and its longer way to realizing the revenue potential it will bring to our company in the mid-term.

So to summarize, we are not pleased by our second quarter financial results. The regional economic environment has weakened further during the second quarter and we expect additional demand and yield pressure during the second half of the year mainly from Venezuela, Brazil, and Colombia.

We’re taking the necessary commercial actions to mitigate this impact and are fine-tuning capacity in our markets while at the same time optimizing and strengthening our networks. Our team continues to deliver world-class operational performance while achieving leading unit cost.

And in spite of the downturn in the economies of Latin America, we’re confident in our business model, we have the strongest network for travel within the America, we continue reducing our unit cost and we have a solid liquidity position with low leverage, which will allow us to come out an even stronger airline in the future. Now, I will turn it over to Jose who will go over our financial results for the second quarter in more detail.

Thank you, Pedro and good morning everyone. Thanks again for joining us.

I want to highlight as in our last quarter, our team’s discipline in controlling our costs, which is particularly important in an environment of slower demand and key to maintaining our company’s strong financial position. During the quarter, revenues decreased 20% year-over-year to $538 million.

We grew available seat miles by 6%, yet revenue passenger miles were essentially flat year-over-year as we saw weaker demand for air travel during the quarter especially during June. As a result, consolidated load factor came in at 72.9% or 4.3 percentage point decrease over Q2 2014.

Furthermore, passenger yields even when adjusted for length of haul were 20% lower year-over-year, mainly driven by yield decreases in Venezuela, Brazil, and Columbia markets. However, in a positive note, our second quarter operating expenses decreased 10% year-over-year and our cost per available seat mile decreased 15% to $9.1 from $10.7 in the second quarter of 2014.

The lower CASM was driven in part by 27% more jet fuel prices. Additionally, we continue to improve our unit cost performance on an ex-fuel basis.

For the quarter, we reduced our CASM ex-fuel by 6% to come in at $6.2. This was driven by reductions in our maintenance, passenger servicing and overhead unit cost as well as lower sales related expenses.

For the second half of the year, we expect to have a slightly higher ex-fuel CASM given timing of certain expenses, as well the expenses related to our new [indiscernible] program. However, as you can see the delivery of our product with low unit cost continues to be one of our company’s core strength.

In terms of operating results, consolidated operating earnings for the quarter came in at $42.2 million representing an operating margin of 9.1%, down substantially when compared to the 19.5% achieved in the second quarter of 2014. In terms of net results, net earnings for the quarter came in at $64.1 million or earnings per share of $1.46 compared to last year’s second quarter net income of $118.2 million or $2.66 per share.

And excluding extraordinary items, maintaining a fuel hedge mark-to-market gain of $23.4 million. Underlying net income for the quarter came in at $41 million or earnings per share of $0.93, 64% year-over-year reduction compared to last year’s second quarter on underlying net income of $115.9 million or adjusted earnings per share of $2.61.

With respect to fuel hedges, we ended the second quarter with hedges or 30% of our fuel volume. While full-year 2015, we are hedged for 28% of our projected volume using jet fuel swaps at an average equivalent price of $2.70 per gallon.

We closed the quarter with approximately 21% cover for 2016 using jet fuel swaps at an average price of $2.52 per gallon. Turning to the balance sheet, assets reached almost $4.2 billion at the end of the quarter.

Owner’s equity totaled approximately $2.2 billion. Debt plus capitalized leases totaled $2 billion and our adjusted net-debt [indiscernible] ratio, excluding all of our cash in Venezuela, came in at two times, which continues to be in the lowest in our peer group.

In terms of debt, we closed the quarter with approximately $1.2 billion of bank debt, about 61% of which is fixed rate, with a blended rate including fixed and floating rate debt of approximately 2.6%. Looking at cash, short and long-term investments, we closed the quarter with $1.15 billion, which represents approximately 46% of last 12 months revenues.

However, as of the end of the quarter, $452 million of our cash was in Venezuela, pending repatriation. Excluding all the cash in Venezuela, the company ended the quarter with over $700 million in cash, which represents roughly 28% of the last 12 months revenues.

Regarding Venezuela, we continue selling only in dollars, and our Bolivar exposure continues to decrease. As of July 31, 2015, our Bolivar balance pending repatriation in Venezuela stood at $448 million, down from $485 million at the end of last year.

In terms of fleet, we ended the quarter with a fleet of 98 aircraft, 57, 737-800s, and 15, 737-700s and 26, EMBRAER-190s. Year-to-date we have already taken delivery of three new Boeing 737-800s, returned two leased 737-700s, and sub-leased two 737-700s to United Airlines.

For the reminder of year, we expect to receive two new Boeing 737-800s during the third quarter and four during the four the quarter. Additionally, we will return one EMBRAER-190 leased aircraft during the third quarter, and two during the fourth quarter.

We’re expected to end the year with a fleet of 100 aircraft with an average of approximately six years. As you can see, we continue modernizing our fleet to improve our product in overall cost efficiency.

Finally as per company policy on September 15, we’ll pay our third quarter dividend in the amount of $0.84 per share to shareholders have record as of August 31, 2015. So going to back to results and to recap, demand for our travel in our region continues to weaken affected by low economic growth and further devalued currencies in Latin America, yields will continued to be affected during the third quarter as we’re seeing weaken demand mainly Venezuela, Brazil and to a lesser extent Colombia.

We continue to looking for efficiencies in order to reduce our unit costs. We are receiving significant benefits from lower fuel prices and we continue to having one of the strongest balance sheets in the industry.

In terms of our guidance for full-year 2015, given fuel prices, the economic outlook in the region further devaluation of curries and demand trends were updating our 2015 full-year guidance as follows. We’re lowering our capacity growth in terms of ASMs to plus or minus 5%.

Load factor is still expected to come in at plus or minus 75%. We’re lowering our RASM guidance to plus or minus $10.05, based on our near-term forecast.

We’re maintaining our CASM ex-fuel guidance at plus or minus $6 .05. We’re lowering our fuel price assumption for the year to an effective price per gallon of $2.20 including inter-plane and net of hedges.

And with respect to our operating margin, we’re lowering our guidance to a range of 11% to 13 %. Thank you.

And with that, we will open the call for some questions, followed by closing remarks from Pedro.

Hi, guys good morning.

Hi, Hunter.

Hi, question on sort of the underlying assumptions that are embedded in the guide. When we think about the fourth quarter and even in the 2016, can you let us know obviously know when those [GDP] (Ph) is going to go or currencies are going to go, but what is underlying your assumptions in terms of your planning process, because I believe in your Analyst Day, Pedro you would had said, you expect Latin American GDP growth to rebound from about 50 basis this year about 2% next year.

Are you guys assuming a stabilization in currency, at the back half of this year are you assuming those GDP growth rates sort of recover as you plan, say beyond the booking curve?

Right so, this is Pedro, right now we are forecasting and already its embedding our guidance the second half of this year and its based mostly on what we saw in the second quarter and more than anything what we saw in June, because up to June the quarter was looking much better. June came in really weak, weaker than what we were expecting and even the way we were managing for June was for a stronger June, but late bookings did not come in.

And in general, the economies and the currencies weakened. So that had big influence in how we are forecasting the rest of the year, even though we do not have a good visibility yet for the fourth quarter, for September somewhat but we still have to wait for late bookings in September and the rest of the quarter.

A next year, it’s too early to tell in November we will give you a preliminary guidance for 2016, but more than anything what we need is stable currencies and stable economies, as not as much that we need growth to rebound to what it used to be a year or two years ago. We have stability if there is less uncertain, what is going to happen with the currencies and the economy, unit revenues would start recuperating.

Okay, so I’m not asking you to categorize your guidance as conservative regarding we think you are going to do, but you are and what I’m hearing you are saying is you guide for the RASM does include an assumptions that the demand environment continues to get worse is that a true statement?

Yes, it is flattish to slightly low, so slightly low to flattish in Q3, flattish in Q4. So it does include kind of what we’ve seen in the second quarter and in June and is not like we take Q4 back to normal or close to normal, where you’ve seen what we saw in June and what we’re forecasting for the third quarter.

I mean we’re almost in September, so we have pretty good visibility for the third quarter and we are expecting fourth quarter to remain flattish versus what we’re seeing right now. For 2016, we have not come out with a guidance yet and again the economy stabilizes, the currencies kind of reach to a point and stay there, we would expect unit revenues to improve next year, but we were not there yet.

Got it. Okay thank you.

And then one quick follow-up, not really follow-up unrelated, but if there is a sense that you guys obviously believe in the long-term story, you reiterate that you’re your Analyst Day, you reiterated at the prepared remarks Pedro, your market cap is [indiscernible] you have an extremely robust balance sheet, very low leverage ratios. If there is a sense that your stock has stopped going down and we've sort of been pricing in the worst of it, why not just take the entire thing out and LBO the company if you feel like the stock has bottomed here and things are not going to get worse.

Well you never know, I won’t speculate about that but you know that’s all stuff we need to consider.

Okay, thank you.

Thanks Hunter.

Hi everybody, thank you very much for the time. So I just have a couple of questions.

Can you say how many unencumbered aircrafts you have at this juncture and are there opportunities for additional capacity growth from these levels?

So yes Helane this is Jose here. We have right now nine unencumbered aircrafts and I think we will end up the year with 12 unencumbered aircrafts.

Okay. And then are there opportunity to grow your capacity?

You broke down. Can you…

Grow capacity.

Grow capacity. Yes, we have a lot of flexibility in the fleet plan, the way that we’re seeing as we saw this year we’re cutting back on our growth, where we are guiding from six to five and we expect 2016 to be kind of in the same ballpark, but we have still some flexibility in terms of expiring leases and with these unencumbered aircrafts that we could play around with on the margin for anything 2016.

Okay. And then just two other questions.

You mentioned that the business started to decline in June, and when we saw the July load factor, which was, actually was a little bit better than your third quarter guidance would imply. So can you say has the business deteriorated further in July and August then or was it I thought a little bit in July it deteriorated again in August?

Okay. Helane this is Pedro.

So the business was already weak in the quarter, but not as weak as June, June was by far the weakest month in the second quarter. In July which is one of our peak months in the year, we see traffic getting back to let’s say an acceptable level, but in part was because we were already kind of alerted that by June that was not as strong as expected.

So July did better in terms of load factor, but with yields depressed like we saw in the quarter. So we got load factor, but we paid a price in yields not much different to what we saw in the second quarter.

June would have had better load factors if we had known ahead of time that late bookings were not going to come in as strong as we expected. So maybe we would have been a little bit more aggressive.

So in short, load factors recuperated somewhat in July, but yields remain depressed.

Okay. And then what about in August, what are you seeing in August, same thing as July?

Yes very similar, very, very similar to July.

Correct.

Okay. And then, these hedge losses is that going to continue in the second half of the year, Jose?

Yes. I think our hedges for the rest of the year are in - they seem to be out of the money.

We have basically maintained our hedge position for 2015 flat for the last several months. So I think they are going to be realize hedge losses for the second half of the year you are seeing.

Okay. Well, thanks for the time guys.

No problem, Helane. Thanks a lot.

Hi, Thanks. Sorry to just follow-up on the near-term here, but it sounds like you are saying July yields are similar to June and similar to what you saw in the second quarter, but 2Q is a seasonal trough.

So can you talk about how much yields are typically higher in July versus what you typically see in a June quarter, because I guess that implies if you are not seeing any yield improvement that things are actually deteriorating in July even though anyway - any color you can offer on that would be great.

Okay. Let me see if we can get you more precise information.

Or I guess the year-to-year RASM, I don’t know if you would be willing to give a year-to-year RASM in June and what that looks in July.

Yes. Let us look for that.

Yes, so Duane it is okay…

And just while you are looking for that maybe you could just remind us about CapEx.

Yes I mean when you look at - on a unit revenue basis, if you look at the Q3 2015 versus 2014, there is a drop, but that is a lower drop in what you saw on the year-over-year comp in Q2 on a unit revenue basis, there is still going to be a double-digit reduction in RASM on a system basis in Q3 from what we’re seeing and I think the RASM on an overall basis is going to be very relatively flat to Q2, but kin of the trough versus Q2 2015 and 2014 is actually wider than what we are seeing in Q3 of 2015 versus 2014.

So. Can you say that again?

So seeing a lower gap on a year-over-year comp in Q3 2015 versus 2014 vis-à-vis the negative gap that we saw in Q2 2015 versus 2014. So there seems to be a lower gap on a year-over-year comp in Q3.

Even though on an overall basis you are still seeing a reduction on a double-digit terms. So it’s slightly better on our year-over-year comp.

Okay. With respect to Venezuela, can you help us understand, and I understand these are small number, right, but if Venezuela was sighted as one of the sources of weakness in the second quarter, why then is capacity growing year-to-year in the third quarter.

And maybe along those lines, it could suggest that while Venezuela yields are very, very weak they are still better than system average, but maybe you can help us understand that.

Right this is Pedro. So first obviously capacity is planned months ahead, it’s not something we’ve planned for a one month through the other and Venezuela yields are down first because of the transition to all dollar sales that happened in the second half of last year and 100% starting early this year.

So that was the kind of the beginning of the Venezuela yields dropping, we saw some of that in the first quarter. What then happened especially in June is that Venezuela demand weakened quite a bit so load factors came down came down and yields came down further in Venezuela.

The capacity plan for the third quarter was already planned for and what we see right now, is we see loads recuperating may be not to the level that we saw at the beginning of the year, but stronger than in the second quarter. And yields although feels down are enough for the flights to be profitable.

So now the profitability in Venezuela is kind of normal is not above the average, but we can fly that capacity which is no more kind of going back to the capacity we had before between Panama and Venezuela not between Venezuela and Columbia where we will remain down. But capacity put back in similar to the levels we had before between Venezuela and Panama and to summarize even through its not as profitable as before and yields are further down, it’s still profitable and similar to average and it make sense to fly that capacity

So nevertheless Duane, we are very keen on making any necessary adjustments to our capacity and we do that on an ongoing basis.

Okay, I’ll jump back in the queue. Thank you.

Sure, hi thanks a lot for the question. I’m just wondering if you guys could share with us how about your yield and demand softness was caused by this [indiscernible] in Brazil.

Okay. This is Pedro; let me look for Brazil numbers.

I’m looking for Brazil as a percent of ASMs. Once second, in the second quarter Brazil what almost 19% of our ASM by the third quarter will be down close to 16%, but it was close to 19% of ASM and it was in the second quarter around 16% of total revenues of which most were point of sale Brazil.

Okay and should you assume that most of your passenger traffic in the Brazilian market comes especially in the corporate segment?

Yes we have a combination and we have a quite a bit of a leisure traffic, but in general terms may be answering your question in a simpler way, around 20% to 25% overall revenue weakness in the second quarter was due to Brazil.

Okay. That’s perfect.

Thanks a lot Pedro.

Welcome.

Hey, good morning just to extrapolate a little bit on what Bernardo was asking. Could you provide that level of color, I’m trying to understand what the pressures were from Brazil, Venezuela, Colombia may be the mix of that and then which of those is getting worse in 3Q versus what you saw in may be June of the second quarter.

Okay, so Venezuela was around 20% of the weakness and it’s not getting better in Q3. A Brazil as I just said was around 20% to 25% of the weakness and it is improving in Q3 slightly, but it is improving somewhat and Colombia was also around 20% and it is improving in Q3.

Got it and Venezuela I think is August like a seasonally strong period and it’s still not strengthening into August.

Sorry can you say that again?

Yes, is Venezuela strength in August, I would say that we are seeing generally a stronger performance in Venezuela than compared let’s say let say to June, but it is certainly not at where it was on a year-over-year comp. its way down in terms of unit revenues on a year-over-year basis, but there is a slight improvement I think versus Q2 performance.

Okay. And then may be taking a step back.

I was wondering if you could - the last time we saw this level of kind of economic weakness and currency weakness is clearly 2009 and I was wondering if you could maybe contrast what is different about the environment today than in 2009 when we saw kind of similar levels of pressure, because it seems like the earnings are definitely under more pressure than it was in 2009 when you kind of adjusted for the size of the company?

Yes we did not see as much weakness in 2009, we did not have the currency devaluation that we have seen right now, which are in some cases up to 30% and 35%. So we did not see that in 2009, there was some certainty in 2009 but the economies were still growing, I don’t have all the figures on my mind right now, but the economies were still growing and actually 2010, 2011 were strong growth years for most of the economies in Latin America.

So I think in that sense it’s quite different, plus there has been more capacity growth overall from Airlines, from Latin America, the U.S. et cetera in the last 12 to 24 months in many markets, which would be fine if the economies were growing and the currencies were strong, but when that changes then there is kind of a land grab.

Everybody wants to make up for slower growth and yields start dropping more than what would usually happen. So I think it’s a combination of all of that but again Latin America did fine in 2010, 2011 et cetera.

That’s helpful and then can I ask one last question, I was wondering if you look at it on a constant currency basis, I was just wondering what level of the unit revenue declines and maybe what contribution that non-fuel cost had from lower currency?

I think from a cost side, it’s helped, but it’s really been minor because of the fact that we have a large portion of our costs are here in Panama and they are dollarized. And I would say that if you look at kind of the yield performance at least in the second quarter, you see that is basically down 20% year-over-year.

So you would argue that’s not unlike what is going on in some of these major currencies that are being devalued up to now.

Got it. That’s helpful.

All right thank you.

Thanks Savi.

Hey everyone just a couple here. Hey just back to not to beat the dead horse here on the currency and the impacts of PRASM, but look your PRASM is down 25% year-over-year, it looks like the space [indiscernible] was up a little bit, so maybe that is a couple percentage points there.

Do you have a sense on sort of percentage points, what was a function of currency weakness, what was FX driven and or anything related to fuel surcharges, because we see those come down in the lot of markets as well, can you have that breakout?

Yes I think a high percent is kind of the changes in Venezuela, which were I don’t know deeper, you want to say that than what was expected or projected and so for different reasons, but it just has come at different markets. It’s still profitable but these are very, very different market than even what we had in the first quarter.

We only sell in dollars but at much lower yields and that’s because their black market currency and their economy has further weakened and that’s been the way to capture traffic in a much changed business environment. So Venezuela has had a considerable drop in PRASM, then Brazil was economy and the devaluation of the currency.

So between Venezuela and Brazil, we can get to like 80% of the revenue witness. And then, we talked a little bit about Colombia and some of the orders makeup the difference but it’s basically that, I think that answers your question, Mike.

Okay. That’s helpful and then just back to Joe, it looks like on the salary and wage expense line, you did call out the FX piece, maybe actually mitigating salary and wage expense and I’m curious all of your crews, flight attendants and pilots, are they all domiciled in Panama, or do you still have flight attendants that are domiciled in Colombia that will allow you to get the benefit of have the stronger dollar as well as what percentage of your increase overall are based outside of Panama?

Okay. So, Mike, we do have crews in Colombia still.

Okay.

Both technical crews, pilots and flight attendants. So there is a little bit of a benefit there in terms of the currency devaluations in that line.

And in terms of the number of employees that we have in Panama versus outside I’d say in Panama it’s about 4,500 employees so half of the total are in Panama, is that like, yes, it’s about two-thirds, here in Panama and a third in Colombia and in the rest of the country.

Okay. That’s helpful.

And just one quick last one on your fleet, Joe or Jose. Sorry Jose you did mention that you had leased one airplane to United 737-700 and then subsequent to quarter-end another one went to United, how many airplanes that you have with United and are there plans to lease more, sublease more and then sort of a second part to that question, you have been redelivering 190s, I’m not sure if I heard you correctly, is that, is the 193 now starting to shrink and are the airplanes that are going back, are they the single class 190s that were used in the Colombian domestic market?

Okay. So we have right now two 737-700s at United on their sublease contract and those are the only two that we have right now scheduled to be under that scheme.

Okay.

And the EMBRAER fleet basically we will right now have 26 EMBRAER-190s and at the end of the year, we will have 23, so we’ll return three EMBRAER aircraft lease operating leases that are expiring and the three aircraft are in the Copa Colombia configuration of 106.

Okay. Very good.

Thank you.

Yes. Good morning, everyone, thanks for the call.

Just would like to discuss a little bit more detailed the jet fuel costs with systems light decrease quarter-over-quarter second Q versus first Q even with like oil price higher in second Q when compared to first Q. So if you just could give some more information on given that we are heading already in the mid of third quarter, on what will expect short term with regards to jet fuel costs.

And also on your hedging policy. Thank you.

So the way that we see the average in a quarter for actually for Q2, we saw it lower than, fuel efficiency was flattish versus Q1, but 2% lower than Q1, not that significant so your item there is a part of it is also related to on an overall basis and you will see a few line on quarter-over-quarter basis. Some of that is also driven by the number of ASMs that you are flying.

So there is a little bit of price impact and there is also somewhat there in terms of how much you’re flying. And in terms of hedges, we are 30% hedged for the remainder of the year, about 28% for the remainder of the year and those hedges are at around $2.70 a gallon.

So they are out of the money essentially. So actually it’s little bit low as about 260, I want to say 260 a gallon for the rest of the year on an average price in terms of value of hedges and it’s about again 20 and actually end of the year 25% so about a quarter or volume for the remainder of the year at 260 on average.

Thank you.

Yes. Thanks for taking my question.

Looking at forward seat availability besides adjusting capacity in Brazil you seem to be cutting capacity in markets like Las Vegas by a big chunk, this has been a key leisure destination for Brazilians. So I’d like to understand if this adjustment is a reflection of weak demand from Brazil or it’s a specific problem in that market, my concern here is not so much Las Vegas but whether Brazil has been hurting your performance north of the hub as well?

Yes, definitely. Brazil and any other weak market affect our performance beyond the hub in Panama, so we need to make adjustments that reflect those new demand trends throughout our network.

So we feel that with a single Las Vegas daily frequency we can satisfy the need of the Brazilian market as we see it today and has better performance, better profitability performance. In the future, we’ll be ready to add capacity, add back capacity in any market, we have to reduce once things come back closer to normal and we’re also making a low season and actually we’re making a specific adjustment in different flights especially where we have multiple frequencies throughout the year, so in low season we’ll make more reductions than in high season but we’re looking at demand trends and there might be a market where we cut a few frequencies in September maybe we add them back in October or vice-versa.

So we’re looking at that also.

Hi, thanks. I have a quick follow-up to the comments you made about Venezuela, do you attribute the renewed weakness in this market mainly to the macro environment and the black market FX rate like you mentioned peaking to lesser and somewhat hurting U.S.

dollar sales or local carriers adding capacity and [sell-in] (Ph) Bolivar also plays a role there.

Yes, as I say all of the above. So the macroeconomic environment it has a strong effect but yes you also have local carriers that can sell in Bolivar we cannot because we would not get our dollars to take them out of the country, so it makes no sense for us to sell in Bolivar.

But local carriers are selling in Bolivar’s are taking a big chunk of the local traffic, thanks to that advantage. So yes, both things are impacting a demand.

Okay. Thank you.

Hi, thanks guys. Pedro, I’m wondering if you can elaborate a little further on the changes you’re making with respect to the networks to drive better results and I appreciate new routes but Copa’s network footprint looks different in the back half of the year relative to the second quarter which causes me to think maybe the guidance could be conservative to, to the point of an earlier question but let us have that aside, how do you get comfortable that the cut say to Brazil are adequate or perhaps to some of other countries that you’re making?

Right. So it’s something we do based on our demand projections.

So we do it every month, we review what we’re doing X number of months into the future and it’s very dynamic, it’s changing so that could be a market where we cut back a month, a certain month and it goes - comes back on the following month, we might have some low season cuts we are not going to actually doing the high season and it’s really hard to predict for example what we will do in the first half of first quarter of 2016, it’s too early, we know what we’re doing from here to the end of the year and is more specific cuts or reduction to specific on these and mostly temporary except for some reductions in Brazil which like for example we took out our third frequencies to Rio that remains out even in the first half of next year and that won’t come back on in [indiscernible] until we see significant changes in the demand trends for Brazil, same with the previous question about our second Las Vegas frequency, so that is not temporary, that is permanent, we feel we have enough capacity with a single frequency to Vegas but when that strengthens again when connectivity from Brazil strengthens again we can put back that capacity and some of the reductions as we mentioned in the script, some of Brazil reductions we’re using to add capacity in new unique markets where we see an opportunity. So again it’s very dynamic, it depends on demand forecast and we do it monthly but we can only do it so many months in the future, not sure if that answers the question.

That’s helpful, thanks. I guess the second question, if you think about the goalpost on how you’re managing the company, I’m wondering if you can talk about how you’re thinking about return on invested capital, it’s been double-digits every year since the IPO and the track record falls to high single digits this year and next and we understand the reason but it does impact how investors think longer term as they value Copa’s stocks.

So to the extent obviously you are willing to defend a double-digit return on invested capital more aggressively would actually drive a very different valuation in conclusion. So I’m just wondering maybe can you just talk more at a high level more philosophically how you’re thinking about that particular metric.

Well yes we’ve been obviously very keen on returning value to the shareholder and we were looking at this very closely, we at the same time we want to manage the business for the long-term and we in this industry pride ourselves in having a very strong balance sheet, so we can continue moving forward but certainly those are items that are very important to us in terms of the way that we return to shareholder and that’s something we’re looking at day in and day out.

Okay, thanks guys. I appreciate it.

Hi good morning guys. This is actually Kevin Kaznica stepping in for Stephen.

Thanks for taking the questions. Just to kind of change [indiscernible] little bit, you’re wondering about the status of the Tocumen airport expansion, do you still expect this to be done by the end of next year?

No that’s going to be delayed most likely until the end of 2017 and essentially offer good because the sign originally done by the previous administration had a lot of the issues that have been corrected or mostly underway to being corrected it right now. So construction has started, restarted I think I had posted but it will take I guess few years to complete, it is going to be end of 2017 but we’re going to end up with a much better airport and much better airport in terms of reminding the leading Intra-America hub in our region.

Great, great and I guess to follow-up on that, do you see any give any comments on low cost carriers watching service to or in Central America, I have been hearing rumours?

Yes there has been a lot of rumours and there is some activity in that sense. And we will wait and see what happens.

The markets in our region especially within Central America most of the markets are not huge, they are not that large and not easily stimulated, it’s kind of we all fly to the same airport with the same cost and we’re very, at least Copa is an extremely competitive airline even from a cost standpoint, we’re a full service, all inclusive, our fares are bundled includes baggage and everything. But when you look at our unit cost, if we were to segregate our economy cabin, we’re going to be in the $0.05 class territory.

We’re going to be below the $0.06 CASM in our economy a cabin with a great reputation, great on time performance, many frequencies show, it’s not an easy competitive landscape we have and we’re one of the reason why it’s that way I mean no low hanging fruit. But yes, there is activity, and we’ll see what happens.

That’s great to see that you guys still are confident on your competitive advantage there. And then just finally this is completely [indiscernible] we’re hearing some I guess some news about droughts in South America, Central America is affecting throughput I think it depend looking now maybe and then the drought results well.

We know it’s not directly related to you guys but have you heard of anything on any kind of economic impact back to lower throughput of [indiscernible].

El Nino as we know, it’s affecting our region. The last time that happened I think it was 15 years ago, like 15 years ago and the Panama Canal actually had to limit the draft of the ships going through due to the lower water levels at our main lake that are part of the Panama Canal system.

And they’re talking that might be necessary again, it maybe next month, maybe in September or October, we don’t think it will have a huge impact in the economy or in our business. But it’s something that the government is dealing with right now.

That’s not something that’s actually been implemented now or something being considered if water levels remain depressed.

Correct.

Okay. Great.

Thank you very much.

Thanks.

Hi, thanks for taking for the follow-up. As we think about 2016 capacity, let’s assume for a second I think you said it’s early but let’s assume for a second things continue to get worse or not yet better.

How much flexibilities you have on growth, would you be willing to shrink I mean the plan is to still grow the fleet next year. How much would you be willing and how much would you be able to flex capacity down in the event of the demand environment continue to be poor?

So our plan right now is not to grow the fleet next year, is to keep it flat from where we would end at the end of 2015, that’s the plan right now. If the economies get better, if currency stabilize which could well happen, we can renew lease claims and grow by two, three, four, five aircraft, it depends on how we see things.

On the other hand, if things we to get worse which hopefully that won’t happen and it’s not what we’re seeing right now, we can always get rid of more aircraft. We could for example sublease more 700s to United, so we also have flexibility in that direction.

So we think we are in a good position to adjust to the realities of 2016.

Okay. And if the fleet - again if things you said gets worst, Pedro but if things sort of stay the same as we’re seeing in June, July, August, presumably that growth rate would have to come down from flat fleet, that still is embedded in that a little bit of recovery, is that fair?

Not really. If things stay flattish next year we will stay as we are right now which is kind of how we’re going to close the year.

You might expect a low single-digit ASM growth rate for 2016, if that were to occur, but as Pedro mentioned, we believe a lot of flexibility in the fleet plan still even a year out to work it and pursue opportunities as they show up or adjust downwards if it’s necessary.

Okay, thanks again for the time.

Thanks for taking the follow-up. Just one quick one on the mileage plan, is there any temporary headwind that you’re experiencing now as it relates to sort of launching your own mileage plan and ramp time is there any revenue impact that you’re experiencing right now related to this transition?

Yes, not really Duane, not from the revenue side. What we will see in the second half is and we’ve mentioned this before is a about a $20 million incremental cost associated with the start up of the program and so that’s actually into our unit cost guidance for the year.

Okay, thanks. And then just can you remind us gross CapEx for this year and next year and how much of your deliveries, do you have left to still finance?

Yes, so all the aircraft for this year we have six aircraft left to be delivered this year which three are operating leases and those three airplanes that we have pending for delivery this year they’ve already been [secured] (Ph) to financing via Japanese operating leases. And on our total basis our CapEx for the year including the aircraft is around almost $300 million about 288 and but the aircraft are basically 100% financing because of the structure that we have.

So kind of other CapEx non-aircraft CapEx is about $100 million.

And what is that in 2016? Thanks.

Yes, in 2016 is around the same figure on the total basis including aircraft around [270] (Ph).

Thank you.

Hi, thanks. Just few quick questions one is on the ConnectMiles are you still kind of expecting a positive revenue contribution in 2016 and any additional cost now that you’ve seen a little bit more of a program ramp up and then secondly this on the capacity front, I would imagine that you and your competitors coming into the year maybe were little bit more hesitant to adjust capacity because I don’t think we saw the level of weaknesses being where it was.

Are you seeing any adjustments on the competitive front, where are you seeing more cuts now versus before or things about the same?

This is Pedro, start with the second question and then I’ll let Jose talk about. Answer the first one, we have not seen that much in terms of a capacity, a reduction especially in the market that we’ve talked about as being the weakest and we haven’t seen that much.

Hopefully we’ll see some more capacity adjustments the rest of year but so far we have not really seen a lot of reduction. I mean there has been some here and there but nothing significant.

Got it.

And Savi in terms of the FFP, I would say that initially are very pleased by the way that the program has been ramping up but it’s still too really to tell in terms of what the impact would be next year in terms of revenue positive side it might be something for, probably I want to call it second half of 2016 as when we’ll start see the true benefits of the program but for now we’re very pleased with the way that the program is started, we’re pretty pleased with that.

Got it. Great.

Thank you.

Thanks. End of Q&A

Thank you. Okay.

Thank you all. This concludes our second quarter earnings call.

Before we leave, I just want to emphasize that we, Copa Holdings have the strongest network in Latin America. We have the best unit cost, the best product and we are dedicating 100%.loss of our time to make sure we come ahead of this market and economic weakness that we come out ahead even stronger airline and we’re fully confident in our business model, in our opportunity in the future and also confident that we can make the best out of this little bit more challenging situation.

So with that, I want to thank you for being with us and thank you for your continued support. Have a good day.