##### Table of Contents



As
filed with the Securities and Exchange Commission on March 16, 2010
    UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 20-F
 
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 001-32696
 
 COPA HOLDINGS, S.A.
  Not Applicable
 
 Republic of Panama
 Avenida Principal y Avenida de la Rotonda, Costa del Este
Complejo Business Park, Torre Norte
Parque Lefevre, Panama City
Panama   Joseph Putaturo
Complejo Business Park, Torre Norte
Parque Lefevre, Panama City, Panama
+507 304 2677 (Telephone)
+507 304 2535 (Facsimile)
 
 Securities registered or to be registered pursuant to Section 12(b) of the Act
 Title of Each Class:
    
    Name of Each Exchange On Which RegisteredClass A Common Stock, without par value
    
    New York Stock Exchange
 
 Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
 
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
 
 Indicate the number of outstanding shares of each of the issuers classes of capital or common
stock as of the close of the period covered by the annual report:
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. þ Yes o No
 If this report is an annual or transition report, indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934. o Yes þ No
 Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. þ Yes o No
 Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). o Yes o No
 Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
 Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o(Do not check if a smaller reporting
company)
    
    Smaller reporting company o
 Indicate by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:
 U.S. GAAP þ IFRS o Other o
 If Other has been checked in response to the previous question, indicate by check mark which
financial statement item the registrant has elected to follow:
 o Item 17 o Item 18
 If this is an annual report, indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). o Yes þ No




---



##### 



TABLE OF CONTENTS
 Introduction
    
    iiMarket Data
    
    iiPresentation of Financial and Statistical Data
    
    iiiSpecial Note About Forward-Looking Statements
    
    iiiItem 1. Identity of Directors, Senior Management and Advisers
    
    
    1Item 2. Offer Statistics and Expected Timetable
    
    
    1Item 3. Key Information
    
    
    1Item 4. Information on the Company
    
    
    22Item 4A. Unresolved Staff Comments
    
    
    43Item 5. Operating and Financial Review and Prospects
    
    
    43Item 6. Directors, senior management and employees
    
    
    62Item 7. Major Shareholders and Related Party Transactions
    
    
    69Item 8. Financial Information
    
    
    72Item 9. The Offer and Listing
    
    
    74Item 10. Additional Information
    
    
    75Item 11. Quantitative and Qualitative Disclosures about Market Risk
    
    
    88Item 12. Description of Securities Other than Equity Securities
    
    
    89Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    90Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    90Item 15. Controls and Procedures
    
    
    90Item 16. Reserved
    
    
    91Item 16A. Audit Committee Financial Expert
    
    
    91Item 16B. Code of Ethics
    
    
    92Item 16C. Principal Accountant Fees and Services
    
    
    92Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    92Item 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    92Item 16F. Changes in Registrants Certifying Accountant
    
    
    92Item 16G. Corporate Governance
    
    
    93Item 17. Financial Statements
    
    
    94Item 18. Financial Statements
    
    
    94Item 19. Exhibits
    
    
    94Index to Financial Statements
    
    
    F-1Exhibit 10.51Exhibit 10.52Exhibit 10.53Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2
   i




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##### Table of Contents



INTRODUCTION
   
    
    Aircraft utilization represents the average number of block hours operated
per day per aircraft for the total aircraft fleet.
 
    
    Available seat miles or ASMs represents the aircraft seating capacity
multiplied by the number of miles the seats are flown.
 
    
    Average stage length represents the average number of miles flown per
flight.
 
    
    Block hours refers to the elapsed time between an aircraft leaving an
airport gate and arriving at an airport gate.
 
    
    Break-even load factor represents the load factor that would have resulted
in total revenues being equal to total expenses.
 
    
    Load factor represents the percentage of aircraft seating capacity that is
actually utilized (calculated by dividing revenue passenger miles by available seat
miles).
 
    
    Operating expense per available seat mile represents operating expenses
divided by available seat miles.
 
    
    Operating revenue per available seat mile represents operating revenues
divided by available seat miles.
 
    
    Passenger revenue per available seat mile represents passenger revenue
divided by available seat miles.
 
    
    Revenue passenger miles represents the number of miles flown by revenue
passengers.
 
    
    Revenue passengers represents the total number of paying passengers
(including all passengers redeeming OnePass frequent flyer miles and other travel
awards) flown on all flight segments (with each connecting segment being considered a
separate flight segment).
 
    
    Yield represents the average amount one passenger pays to fly one mile.
 
 Market Data
   ii




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##### Table of Contents



Presentation of Financial and Statistical Data
   
 Special Note About Forward-Looking Statements
  
    
    general economic, political and business conditions in Panama and Latin America and
particularly in the geographic markets we serve;
 
    
    our managements expectations and estimates concerning our future financial
performance and financing plans and programs;
 
    
    our level of debt and other fixed obligations;
 
    
    demand for passenger and cargo air service in the markets in which we operate;
 
    
    competition;
 
    
    our capital expenditure plans;
 
    
    changes in the regulatory environment in which we operate;
 
    
    changes in labor costs, maintenance costs, fuel costs and insurance premiums;
 
    
    changes in market prices, customer demand and preferences and competitive
conditions;
 
    
    cyclical and seasonal fluctuations in our operating results;
 
    
    defects or mechanical problems with our aircraft;
 
    
    our ability to successfully implement our growth strategy;
 
    
    our ability to obtain financing on commercially reasonable terms; and
 
    
    the risk factors discussed under Risk Factors beginning on page 4.
   iii




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##### Table of Contents



PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 A. Selected Financial Data
    Year Ended December 31,2005(21)
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009(in thousands of dollars, except share and per share data and operating data)INCOME STATEMENT DATAOperating revenue:Passenger revenue
    
    $
    563,520
    
    
    $
    798,901
    
    
    $
    967,066
    
    
    $
    1,217,311
    
    
    $
    1,186,717Cargo, mail and other
    
    
    45,094
    
    
    
    52,259
    
    
    
    60,198
    
    
    
    71,478
    
    
    
    66,370Total operating revenues
    
    
    608,614
    
    
    
    851,160
    
    
    
    1,027,264
    
    
    
    1,288,789
    
    
    
    1,253,087Operating expenses:Aircraft fuel
    
    
    149,303
    
    
    
    217,730
    
    
    
    265,387
    
    
    
    404,669
    
    
    
    300,816Salaries and benefits
    
    
    69,730
    
    
    
    91,382
    
    
    
    116,691
    
    
    
    139,431
    
    
    
    157,879Passenger servicing
    
    
    50,622
    
    
    
    64,380
    
    
    
    82,948
    
    
    
    98,775
    
    
    
    110,768Commissions
    
    
    45,087
    
    
    
    57,808
    
    
    
    65,930
    
    
    
    67,177
    
    
    
    57,565Reservations and sales
    
    
    29,213
    
    
    
    38,212
    
    
    
    48,229
    
    
    
    54,996
    
    
    
    56,280Maintenance, materials and repairs
    
    
    32,505
    
    
    
    50,057
    
    
    
    51,249
    
    
    
    66,438
    
    
    
    76,732Depreciation
    
    
    19,857
    
    
    
    24,874
    
    
    
    35,328
    
    
    
    42,891
    
    
    
    47,079Flight operations
    
    
    24,943
    
    
    
    33,740
    
    
    
    43,958
    
    
    
    56,425
    
    
    
    60,873Aircraft rentals
    
    
    27,631
    
    
    
    38,169
    
    
    
    38,636
    
    
    
    43,008
    
    
    
    46,538Landing fees and other rentals
    
    
    17,909
    
    
    
    23,929
    
    
    
    27,017
    
    
    
    32,467
    
    
    
    33,628Other
    
    
    32,622
    
    
    
    44,758
    
    
    
    55,093
    
    
    
    58,521
    
    
    
    62,186Special fleet charges(1)
    
    
    
    
    
    
    
    
    
    
    7,309
    
    
    
    
    
    
    
    19,417Gain from involuntary conversion(2)
    
    
    
    
    
    
    
    
    
    
    (8,019
    )
    
    
    
    
    
    
    Total operating expenses
    
    
    499,422
    
    
    
    685,039
    
    
    
    829,756
    
    
    
    1,064,798
    
    
    
    1,029,761Operating income
    
    
    109,192
    
    
    
    166,121
    
    
    
    197,508
    
    
    
    223,991
    
    
    
    223,326Non-operating income (expense):Interest expense
    
    
    (21,629
    )
    
    
    (29,150
    )
    
    
    (44,332
    )
    
    
    (42,071
    )
    
    
    (32,938
    )Interest capitalized
    
    
    1,089
    
    
    
    1,712
    
    
    
    2,570
    
    
    
    1,921
    
    
    
    693Interest income
    
    
    3,544
    
    
    
    7,257
    
    
    
    12,193
    
    
    
    11,130
    
    
    
    9,185Other, net(3)
    
    
    395
    
    
    
    185
    
    
    
    10,987
    
    
    
    (58,843
    )
    
    
    59,703Total non-operating expenses, net
    
    
    (16,601
    )
    
    
    (19,996
    )
    
    
    (18,582
    )
    
    
    (87,863
    )
    
    
    36,643Income before income taxes
    
    
    92,591
    
    
    
    146,125
    
    
    
    178,926
    
    
    
    136,128
    
    
    
    259,969Provision for income taxes
    
    
    (9,592
    )
    
    
    (12,286
    )
    
    
    (17,106
    )
    
    
    (17,469
    )
    
    
    (19,610
    )Net income
    
    
    82,999
    
    
    
    133,839
    
    
    
    161,820
    
    
    
    118,659
    
    
    
    240,359BALANCE SHEET DATATotal cash, cash equivalents and short-term
investments
    
    $
    114,490
    
    
    $
    197,380
    
    
    $
    308,358
    
    
    $
    396,826
    
    
    $
    352,068
  1




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##### Table of Contents



Year Ended December 31,2005(21)
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009(in thousands of dollars, except share and per share data and operating data)Accounts receivable, net
    
    
    46,533
    
    
    
    62,137
    
    
    
    74,169
    
    
    
    75,201
    
    
    
    80,791Total current assets
    
    
    184,351
    
    
    
    290,651
    
    
    
    435,736
    
    
    
    522,464
    
    
    
    502,154Purchase deposits for flight equipment
    
    
    52,753
    
    
    
    65,150
    
    
    
    64,079
    
    
    
    84,861
    
    
    
    198,697Total property and equipment
    
    
    637,543
    
    
    
    862,283
    
    
    
    1,166,262
    
    
    
    1,337,669
    
    
    
    1,481,687Total assets
    
    
    916,912
    
    
    
    1,255,015
    
    
    
    1,707,251
    
    
    
    1,954,225
    
    
    
    2,092,869Long-term debt
    
    
    402,954
    
    
    
    529,802
    
    
    
    732,209
    
    
    
    800,196
    
    
    
    750,971Total shareholders equity
    
    
    245,867
    
    
    
    371,669
    
    
    
    531,637
    
    
    
    632,432
    
    
    
    865,628Capital stock
    
    
    29,223
    
    
    
    32,563
    
    
    
    37,372
    
    
    
    42,964
    
    
    
    48,244CASH FLOW DATANet cash provided by operating activities
    
    $
    115,368
    
    
    $
    193,468
    
    
    $
    221,941
    
    
    $
    198,105
    
    
    $
    282,436Net cash used in investing activities
    
    
    (159,886
    )
    
    
    (258,980
    )
    
    
    (334,758
    )
    
    
    (322,780
    )
    
    
    (151,451
    )Net cash provided by financing activities
    
    
    38,929
    
    
    
    141,498
    
    
    
    228,295
    
    
    
    59,519
    
    
    
    (87,849
    )OTHER FINANCIAL DATAEBITDA(4)
    
    
    129,444
    
    
    
    191,180
    
    
    
    243,823
    
    
    
    208,039
    
    
    
    330,108Aircraft rentals
    
    
    27,631
    
    
    
    38,169
    
    
    
    38,636
    
    
    
    43,008
    
    
    
    46,538Operating margin(5)
    
    
    17.9
    %
    
    
    19.5
    %
    
    
    19.2
    %
    
    
    17.4
    %
    
    
    17.8
    %Weighted average shares used in computing net
income per share (basic)(6)
    
    
    42,812,500
    
    
    
    43,517,489
    
    
    
    43,782,386
    
    
    
    43,822,879
    
    
    
    43,910,929Weighted average shares used in computing net
income per share (diluted)(6)
    
    
    42,812,500
    
    
    
    43,517,489
    
    
    
    43,782,386
    
    
    
    43,822,879
    
    
    
    43,910,929Net income (loss) per share (basic)(6)
    
    $
    1.94
    
    
    $
    3.08
    
    
    $
    3.70
    
    
    $
    2.71
    
    
    $
    5.47Net income (loss) per share (diluted)(6)
    
    $
    1.94
    
    
    $
    3.08
    
    
    $
    3.70
    
    
    $
    2.71
    
    
    $
    5.47Dividends declared per share
    
    $
    0.24
    
    
    $
    0.19
    
    
    $
    0.31
    
    
    $
    0.37
    
    
    $
    0.37OPERATING DATARevenue passengers carried(7)
    
    
    4,361
    
    
    
    5,741
    
    
    
    6,015
    
    
    
    6,485
    
    
    
    7,182Revenue passenger miles(8)
    
    
    3,824
    
    
    
    5,017
    
    
    
    5,861
    
    
    
    6,717
    
    
    
    7,397Available seat miles(9)
    
    
    5,359
    
    
    
    6,866
    
    
    
    7,918
    
    
    
    8,845
    
    
    
    9,911Load factor(10)
    
    
    71.4
    %
    
    
    73.1
    %
    
    
    74.0
    %
    
    
    75.9
    %
    
    
    74.6
    %Break-even load factor(11)
    
    
    58.0
    %
    
    
    58.0
    %
    
    
    58.5
    %
    
    
    67.1
    %
    
    
    56.2
    %Total block hours(12)
    
    
    103,628
    
    
    
    130,818
    
    
    
    157,200
    
    
    
    182,692
    
    
    
    206,720Average daily aircraft utilization(13)
    
    
    9.8
    
    
    
    9.8
    
    
    
    9.6
    
    
    
    9.6
    
    
    
    10.1Average passenger fare
    
    
    129.2
    
    
    
    139.2
    
    
    
    160.8
    
    
    
    187.7
    
    
    
    165.2Yield(14)
    
    
    14.74
    
    
    
    15.92
    
    
    
    16.50
    
    
    
    18.12
    
    
    
    16.04Passenger revenue per ASM(15)
    
    
    10.51
    
    
    
    11.64
    
    
    
    12.21
    
    
    
    13.76
    
    
    
    11.97Operating revenue per ASM(16)
    
    
    11.36
    
    
    
    12.40
    
    
    
    12.97
    
    
    
    14.57
    
    
    
    12.64Operating expenses per ASM (CASM)(17)
    
    
    9.32
    
    
    
    9.98
    
    
    
    10.48
    
    
    
    12.04
    
    
    
    10.39Departures
    
    
    48,934
    
    
    
    65,471
    
    
    
    71,893
    
    
    
    79,664
    
    
    
    88,294Average daily departures
    
    
    156.6
    
    
    
    179.4
    
    
    
    197.0
    
    
    
    217.7
    
    
    
    241.9Average number of aircraft
    
    
    31.0
    
    
    
    38.6
    
    
    
    45.0
    
    
    
    52.0
    
    
    
    56.3Airports served at period end
    
    
    36
    
    
    
    42
    
    
    
    46
    
    
    
    51
    
    
    
    51SEGMENT FINANCIAL DATACopa:Operating revenue
    
    $
    505,655
    
    
    $
    676,168
    
    
    $
    806,201
    
    
    $
    1,035,945
    
    
    $
    1,024,473Operating expenses
    
    
    402,684
    
    
    
    509,540
    
    
    
    634,521
    
    
    
    827,713
    
    
    
    810,201Depreciation
    
    
    19,242
    
    
    
    23,732
    
    
    
    30,710
    
    
    
    38,107
    
    
    
    43,174Aircraft rentals
    
    
    22,096
    
    
    
    23,842
    
    
    
    27,756
    
    
    
    31,271
    
    
    
    26,037Interest expense
    
    
    19,424
    
    
    
    26,907
    
    
    
    36,300
    
    
    
    36,208
    
    
    
    30,086Interest capitalized
    
    
    1,089
    
    
    
    1,712
    
    
    
    2,570
    
    
    
    1,921
    
    
    
    693Interest income
    
    
    3,376
    
    
    
    6,887
    
    
    
    11,720
    
    
    
    10,514
    
    
    
    8,121Net income (loss) before tax
    
    
    89,745
    
    
    
    155,533
    
    
    
    165,571
    
    
    
    119,355
    
    
    
    254,346Total assets
    
    
    851,075
    
    
    
    1,168,121
    
    
    
    1,546,623
    
    
    
    1,823,512
    
    
    
    1,918,964AeroRepública:Operating revenue
    
    $
    103,016
    
    
    $
    175,883
    
    
    $
    226,042
    
    
    $
    264,912
    
    
    $
    240,359Operating expenses
    
    
    96,839
    
    
    
    176,388
    
    
    
    200,474
    
    
    
    249,152
    
    
    
    232,743Depreciation
    
    
    615
    
    
    
    1,142
    
    
    
    4,618
    
    
    
    4,783
    
    
    
    3,905Aircraft rentals
    
    
    5,535
    
    
    
    14,604
    
    
    
    14,760
    
    
    
    22,732
    
    
    
    26,187Interest expense
    
    
    2,205
    
    
    
    2,243
    
    
    
    8,032
    
    
    
    5,863
    
    
    
    2,852Interest capitalized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest income
    
    
    168
    
    
    
    370
    
    
    
    473
    
    
    
    616
    
    
    
    1,064Net income (loss) before tax
    
    
    2,846
    
    
    
    (9,408
    )
    
    
    13,354
    
    
    
    5,277
    
    
    
    5,229Total assets
    
    
    98,091
    
    
    
    132,872
    
    
    
    256,349
    
    
    
    258,562
    
    
    
    318,906SEGMENT OPERATING DATACopa:Available seat miles(9)
    
    
    4,409
    
    
    
    5,239
    
    
    
    6,298
    
    
    
    7,342
    
    
    
    8,319Load factor(10)
    
    
    73.4
    %
    
    
    77.8
    %
    
    
    78.4
    %
    
    
    78.8
    %
    
    
    76.0
    %Break-even load factor
    
    
    56.8
    %
    
    
    56.1
    %
    
    
    58.7
    %
    
    
    67.2
    %
    
    
    53.2
    %Yield(14)
    
    
    14.41
    
    
    
    15.49
    
    
    
    15.33
    
    
    
    16.81
    
    
    
    15.25Operating revenue per ASM(16)
    
    
    11.47
    
    
    
    12.91
    
    
    
    12.80
    
    
    
    14.11
    
    
    
    12.31CASM(17)
    
    
    9.13
    
    
    
    9.73
    
    
    
    10.08
    
    
    
    11.27
    
    
    
    9.74Average stage length(19)
    
    
    1,123
    
    
    
    1,158
    
    
    
    1,207
    
    
    
    1,216
    
    
    
    1,214
  2




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##### Table of Contents



Year Ended December 31,2005(21)
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009(in thousands of dollars, except share and per share data and operating data)On time performance(18)
    
    
    91.7
    %
    
    
    91.0
    %
    
    
    86.9
    %
    
    
    87.5
    %
    
    
    87.6
    %AeroRepública:(22)Available seat miles(9)
    
    
    950
    
    
    
    1,627
    
    
    
    1,620
    
    
    
    1,503
    
    
    
    1,592Load factor(10)
    
    
    62.0
    %
    
    
    57.9
    %
    
    
    57.2
    %
    
    
    61.7
    %
    
    
    67.5
    %Break even load factor
    
    
    60.7
    %
    
    
    61.9
    %
    
    
    53.8
    %
    
    
    62.0
    %
    
    
    67.3
    %Yield(14)
    
    
    16.53
    
    
    
    17.79
    
    
    
    22.74
    
    
    
    26.31
    
    
    
    20.71Operating revenue per ASM(16)
    
    
    10.84
    
    
    
    10.81
    
    
    
    13.95
    
    
    
    17.63
    
    
    
    15.10CASM(17)
    
    
    10.19
    
    
    
    10.84
    
    
    
    12.37
    
    
    
    16.58
    
    
    
    14.62Average stage length(19)
    
    
    360
    
    
    
    370
    
    
    
    398
    
    
    
    421
    
    
    
    429On time performance(20)
    
    
    70.4
    %
    
    
    80.3
    %
    
    
    72.8
    %
    
    
    84.2
    %
    
    
    90.1
    %
 
 (1)
    
    Represents expenses related to costs associated with terms negotiated for the early
termination its MD-80 aircraft as a result of AeroRepúblicas transition to a more fuel
efficient all Embraer-190 fleet.(2)
    
    Represents gain on involuntary conversion of non-monetary assets to monetary assets related
to insurance proceeds in excess of aircraft book value.(3)
    
    Consists primarily of changes in the fair value of fuel derivative contracts, foreign
exchange gains/losses and gains on sale of Boeing 737-200 aircraft. See Item 5. Operating
and Financial Review and Prospects and the notes to our consolidated financial statements.(4)
    
    EBITDA represents net income (loss) plus the sum of interest expense, income taxes,
depreciation and amortization minus the sum of interest capitalized and interest income.
EBITDA is presented as supplemental information because we believe it is a useful indicator of
our operating performance and is useful in comparing our operating performance with other
companies in the airline industry. However, EBITDA should not be considered in isolation, as
a substitute for net income prepared in accordance with U.S. GAAP or as a measure of a
companys profitability. In addition, our calculation of EBITDA may not be comparable to
other companies similarly titled measures. The following table presents a reconciliation of
our net income to EBITDA for the specified periods: Year Ended December 31,2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009(in thousands of dollars)Net income
    
    $
    82,999
    
    
    $
    133,839
    
    
    $
    161,820
    
    
    $
    118,659
    
    
    $
    240,359Interest expense
    
    
    21,629
    
    
    
    29,150
    
    
    
    44,332
    
    
    
    42,071
    
    
    
    32,938Income taxes
    
    
    9,592
    
    
    
    12,286
    
    
    
    17,106
    
    
    
    17,469
    
    
    
    19,610Depreciation
    
    
    19,857
    
    
    
    24,874
    
    
    
    35,328
    
    
    
    42,891
    
    
    
    47,079Subtotal
    
    
    134,077
    
    
    
    200,149
    
    
    
    258,586
    
    
    
    221,090
    
    
    
    339,986Interest capitalized
    
    
    (1,089
    )
    
    
    (1,712
    )
    
    
    (2,570
    )
    
    
    (1,921
    )
    
    
    (693
    )Interest income
    
    
    (3,544
    )
    
    
    (7,257
    )
    
    
    (12,193
    )
    
    
    (11,130
    )
    
    
    (9,185
    )EBITDA
    
    
    129,444
    
    
    
    191,180
    
    
    
    243,823
    
    
    
    208,039
    
    
    
    330,108
 Aircraft rentals represents a significant operating expense of our business. Because we leased several of our aircraft
during the periods presented, we believe that when assessing our EBITDA you should also consider the impact of our aircraft
rent expense, which was $27.6 million in 2005, $38.2 million in 2006, $38.6 million in 2007, $43.0 million in 2008 and
$46.5 million in 2009.(5)
    
    Operating margin represents operating income divided by operating revenues.(6)
    
    All share and per share amounts have been retroactively adjusted to reflect the current
capital structure described under Description of Capital Stock and in the notes to our
consolidated financial statements. In 2009, we changed our method of calculating earnings per
share and adjusted prior period data accordingly. See Note 10 to our Consolidated Financial
Statements.(7)
    
    Total number of paying passengers (including all passengers redeeming OnePass frequent flyer
miles and other travel awards) flown on all flight segments, expressed in thousands.(8)
    
    Number of miles flown by scheduled revenue passengers, expressed in millions.(9)
    
    Aircraft seating capacity multiplied by the number of miles the seats are flown, expressed in
millions.(10)
    
    Percentage of aircraft seating capacity that is actually utilized. Load factors are
calculated by dividing revenue passenger miles by available seat miles.(11)
    
    Load factor that would have resulted in total revenues being equal to total expenses,
excluding the effect of fuel derivative mark-to-market and special fleet charges, this figure
would have been 57.9% in 2005, 57.7% in 2006, 58.6% in 2007, 63.0% in 2008 and 59.2% in 2009.(12)
    
    The number of hours from the time an airplane moves off the departure gate for a revenue
flight until it is parked at the gate of the arrival airport.(13)
    
    Average number of block hours operated per day per aircraft for the total aircraft fleet.(14)
    
    Average amount (in cents) one passenger pays to fly one mile.(15)
    
    Passenger revenues (in cents) divided by the number of available seat miles.  3




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##### Table of Contents



(16)
    
    Total operating revenues for passenger related costs (in cents) divided by the number of available seat miles.(17)
    
    Total operating expenses for passenger aircraft related costs (in cents) divided by the number of available seat miles.(18)
    
    Percentage of flights that arrive at the destination gate within fifteen minutes of scheduled arrival.(19)
    
    The average number of miles flown per flight.(20)
    
    Percentage of flights that depart within fifteen minutes of the scheduled departure time.(21)
    
    For AeroRepública operating data, this period covers from April 22, 2005 until December 31,
2005 which corresponds to the period that AeroRepública was consolidated in our financial
statements.(22)
    
    AeroRepública has not historically distinguished between revenue passengers and non-revenue
passengers. Although we have implemented systems at AeroRepública to record that information,
revenue passenger information and other statistics derived from revenue passenger data for the
year ended December 31, 2005, 2006, 2007, 2008 and 2009 has been derived from estimates that
we believe to be materially accurate. B. Capitalization and Indebtedness
  C. Reasons for the Offer and Use of Proceeds
  D. Risk Factors
 An investment in our Class A shares involves a high degree of risk. You should carefully
consider the risks described below before making an investment decision. Our business, financial
condition and results of operations could be materially and adversely affected by any of these
risks. The trading price of our Class A shares could decline due to any of these risks, and you
may lose all or part of your investment. The risks described below are those known to us and that
we currently believe may materially affect us.
 R isks R elating to Our Company
 Our failure to successfully implement our growth strategy may adversely affect our results of
operations and harm the market value of our Class A shares.
    4




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##### Table of Contents



Our performance is heavily dependent on economic conditions in the countries in which we do
business.
  
    
    changes in economic or other governmental policies;
 
    
    changes in regulatory, legal or administrative practices; or
 
    
    other political or economic developments over which we have no control.
  The cost of refinancing our debt and obtaining additional financing for new aircraft has increased
and may continue to increase.
    5




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We are dependent on our alliance with Continental and cannot assure you that it will continue.
    We operate using a hub-and-spoke model and are vulnerable to competitors offering direct flights
between destinations we serve.
   6




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The Panamanian Aviation Act and certain of the bilateral agreements under which we operate contain
Panamanian ownership requirements that are not clearly defined, and our failure to comply with
these requirements could cause us to lose our authority to operate in Panama or to the
international destinations we serve.
   Autoridad de Aeronáutica Civil
 Our business is subject to extensive regulation which may restrict our growth or our operations or
increase our costs.
 Unidad Administrativa Especial de Aeronáutica Civil
  7




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##### Table of Contents



The growth of our operations to the United States and the benefits of our code-sharing arrangements
with Continental are dependent on Panamas continued favorable safety assessment.
  We are highly dependent on our hub at Panama Citys Tocumen International Airport.
   8




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We are exposed to increases in landing charges and other airport access fees and cannot be assured
access to adequate facilities and landing rights necessary to achieve our expansion plans.
    We have significant fixed financing costs and expect to incur additional fixed costs as we expand
our fleet.
   
    
    limit our ability in the future to obtain additional financing for working
capital or other important needs;
  9




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##### Table of Contents




    
    impair our liquidity by diverting substantial cash from our operating needs to
service fixed financing obligations; or
 
    
    limit our ability to plan for or react to changes in our business, in the
airline industry or in general economic conditions.
  Our existing debt financing agreements and our aircraft operating leases contain restrictive
covenants that impose significant operating and financial restrictions on us.
  
    
    create material liens on our assets;
 
    
    take certain actions that may impair creditors rights to our aircraft;
 
    
    sell assets or engage in certain mergers or consolidations; and
 
    
    engage in other specified significant transactions.
  If we fail to successfully take delivery of or reliably operate new aircraft, our business could be
harmed.
  
    
    manufacturers delays in meeting the agreed upon aircraft delivery schedule;
 
    
    difficulties in obtaining financing on acceptable terms to complete our purchase
of all of the aircraft we have committed to purchase; and
 
    
    the inability of new aircraft and their components to comply with agreed upon
specifications and performance standards.
    10




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##### Table of Contents



If we were to determine that our aircraft, rotable parts or inventory were impaired, it would have
a significant adverse effect on our operating results.
 Accounting for the
Impairment or Disposal of Long-Lived Assets
 We rely on information technology systems, and we may become more dependent on such systems in the
future.
  Our quarterly results can fluctuate substantially, and the trading price of our Class A shares may
be affected by such variations.
   Our reputation and financial results could be harmed in the event of an accident or incident
involving our aircraft.
   11




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##### Table of Contents



Fluctuations in foreign exchange rates could negatively affect our net income.
   Our maintenance costs will increase as our fleet ages.
  If we enter into a prolonged dispute with any of our employees, many of whom are represented by
unions, or if we are required to increase substantially the salaries or benefits of our employees,
it may have an adverse impact on our operations and financial condition.
   12




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##### Table of Contents



Our revenues depend on our relationship with travel agents and tour operators.
  
    
    the size of commissions offered by other airlines;
 
    
    changes in our arrangements with other distributors of airline tickets; and
 
    
    the introduction and growth of new methods of selling tickets.
 We rely on third parties to provide our customers and us with facilities and services that are
integral to our business.
  We depend on a limited number of suppliers.
    13




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##### Table of Contents



We are dependent on key personnel.
  Our operations in Cuba, which has been identified by the U.S. Department of State as a state
sponsor of terrorism, may adversely affect our reputation and the liquidity and value of our Class
A shares.
   Risks Relating to the Airline Industry
 The airline industry is highly competitive.
   14




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##### Table of Contents



We may face increasing competition from low-cost carriers offering discounted fares.
  Significant changes or extended periods of high fuel costs or fuel supply disruptions could
materially affect our operating results.
   15




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##### Table of Contents



We may experience difficulty finding, training and retaining pilots and other employees.
   Because the airline industry is characterized by high fixed costs and relatively elastic revenues,
airlines cannot quickly reduce their costs to respond to shortfalls in expected revenue.
   16




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##### Table of Contents



Airline bankruptcies could adversely affect the industry.
  Our business may be adversely affected by downturns in the airline industry caused by terrorist
attacks, war or outbreak of disease, which may alter travel behavior or increase costs.
    Increases in insurance costs and/or significant reductions in coverage would harm our business,
financial condition and results of operations.
  Failure to comply with applicable environmental regulations could adversely affect our business.
   17




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##### Table of Contents



Risks Relating to Panama and our Region
 We are highly dependent on conditions in Panama and, to a lesser extent, in Colombia.
    ny increase in the taxes we or our shareholders pay in Panama or the other countries where we do
business could adversely affect the value of our Class A shares.
   18




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##### Table of Contents



Political unrest and instability in Latin American countries to which we fly may adversely affect
our business and the market price of our Class A shares.
  Risks Relating to Our Class A Shares
 The value of our Class A shares may be adversely affected by ownership restrictions on our capital
stock and the power of our Board of Directors to take remedial actions to preserve our operating
license and international route rights by requiring sales of certain outstanding shares or issuing
new stock.
 (Pacto Social)
  19




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##### Table of Contents



Our controlling shareholder has the ability to direct our business and affairs, and its interests
could conflict with yours.
  The Class A shares will only be permitted to vote in very limited circumstances and may never have
full voting rights.
  Substantial future sales of our Class A shares by CIASA could cause the price of the Class A shares
to decrease.
   20




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##### Table of Contents



Holders of our common stock are not entitled to preemptive rights, and as a result you may
experience substantial dilution upon future issuances of stock by us.
  You may not be able to sell our Class A shares at the price or at the time you desire because an
active or liquid market for the Class A shares may not continue.
  Our Board of Directors may, in its discretion, amend or repeal our dividend policy. You may not
receive the level of dividends provided for in the dividend policy or any dividends at all.
  To the extent we pay dividends to our shareholders, we will have less capital available to meet our
future liquidity needs.
  Our Articles of Incorporation impose ownership and control restrictions on our company which ensure
that Panamanian nationals will continue to control us and that these restrictions operate to
prevent any change of control or some transfers of ownership in order to comply with the Aviation
Act and other bilateral restrictions.
   21




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##### Table of Contents



The protections afforded to minority shareholders in Panama are different from and more limited
than those in the United States and may be more difficult to enforce.
  Developments in Latin American countries and other emerging market countries may cause the market
price of our Class A shares to decrease.
  
 Item 4. Information on the Company
 A. History and Development of the Company
 General
    22




---



##### Table of Contents



sociedad anónima
   Capital Expenditures
  B. Business Overview
     23




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##### Table of Contents



Our Strengths
  
    
    Our Hub of the Americas airport is strategically located.We believe that Copas base
of operations at the geographically central location of Tocumen International Airport in
Panama City, Panama provides convenient connections to our principal markets in North,
Central and South America and the Caribbean, enabling us to consolidate traffic to serve
several destinations that do not generate enough demand to justify point-to-point service.
Flights from Panama operate with few service disruptions due to weather, contributing to
high completion factors and on-time performance. Tocumen International Airports sea-level
altitude allows our aircraft to operate without performance restrictions that they would be
subject to at higher-altitude airports. We believe that Copas hub in Panama allows us to
benefit from Panama Citys status as a center for financial services, shipping and commerce
and from Panamas stable, dollar-based economy, free-trade zone and growing tourism.
 
    
    We focus on keeping our operating costs low.In recent years, our low operating costs
and efficiency have contributed significantly to our profitability. Our operating cost per
available seat mile, excluding costs for fuel and fleet impairment charges, was 6.53 cents
in 2005, 6.81 cents in 2006, 7.13 cents in 2007, 7.46 in 2008, and 7.36 in 2009. See Item
5. Operating and Financial Review and Prospects for a reconciliation of our operating cost
per available seat mile when excluding costs for fuel and fleet impairment charges to our
operating cost per available seat mile. We believe that our cost per available seat mile
reflects our modern fleet, efficient operations and the competitive cost of labor in
Panama.
 
    
    We operate a modern fleet.Our fleet consists of modern Boeing 737-Next Generation and
Embraer 190 aircraft equipped with winglets and other modern cost-saving and safety
features. Over the next several years, we intend to enhance our modern fleet through the
addition of at least 28 additional Boeing 737-Next Generation aircraft. We believe that our
modern fleet contributes to our on-time performance and high completion factor (percentage
of scheduled flights not cancelled). We expect our Boeing 737-700s, 737-800s and Embraer
190s to continue offering substantial operational cost advantages in terms of fuel
efficiency and maintenance costs. Since December 2007, AeroRepública has taken delivery of
13 Embraer 190 aircraft and as of February 2010 has completed its fleet modernization and
expansion plan.
  24




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##### Table of Contents




    
    We believe Copa has a strong brand and a reputation for quality service.We believe
that the Copa brand is associated with value to passengers, providing world-class service
and competitive pricing. For the year ended December 31, 2009, Copa Airlines statistic for
on-time performance was 87.6%, completion factor was 99.4% and baggage handling was 2.5
mishandled bags per 1000 passengers. Additionally, AeroRepúblicas statistics for on-time
performance was 90.1%, completion factor was 99.7% and baggage
handling was 1.1 mishandled
bags per 1000 passengers. Our focus on customer service has helped to build passenger
loyalty. We believe that our brand has also been enhanced through our relationship with
Continental, including our joint marketing of the OnePass loyalty program in Latin America,
the similarity of our aircraft livery and aircraft interiors and our participation in
Continentals Presidents Club lounge program.
 
    
    Our management fosters a culture of teamwork and continuous improvement.Our management
team has been successful at creating a culture based on teamwork and focused on continuous
improvement. Each of our employees has individual objectives based on corporate goals that
serve as a basis for measuring performance. When corporate operational and financial
targets are met, employees are eligible to receive bonuses according to our profit sharing
program. See Item 6D. Employees. We also recognize outstanding performance of individual
employees through company-wide recognition, one-time awards, special events and, in the
case of our senior management, grants of restricted stock and stock options. Our
goal-oriented culture and incentive programs have contributed to a motivated work force
that is focused on satisfying customers, achieving efficiencies and growing profitability.
 Our Strategy
  
    
    Expand our network by increasing frequencies and adding new destinations.We believe
that demand for air travel in Latin America is likely to expand in the next decade, and we
intend to use our increasing fleet capacity to meet this growing demand. We intend to focus
on expanding our operations by increasing flight frequencies on our most profitable routes
and initiating service to new destinations. Copas Panama City hub allows us to consolidate
traffic and provide service to certain underserved markets, particularly in Central America
and the Caribbean, and we intend to focus on providing new service to regional destinations
that we believe best enhance the overall connectivity and profitability of our network.
 
    
    Continue to focus on keeping our costs low.We seek to reduce our cost per available
seat mile without sacrificing services valued by our customers as we execute our growth
plans. Our goal is to maintain a modern fleet and to make effective use of our resources
through efficient aircraft utilization and employee productivity. We intend to reduce our
distribution costs by increasing direct sales, including internet and call center sales, as
well as improving efficiency through technology and automated processes.
 
    
    Emphasize superior service and value to our customers.We intend to continue to focus
on satisfying our customers and earning their loyalty by providing a combination of
superior service and competitive fares. We believe that continuing our operational success
in keeping flights on time, reducing mishandled luggage and offering convenient schedules
to attractive destinations will be essential to achieving this goal. We intend to continue
to incentivize our employees to improve or maintain operating and service metrics relating
to our customers satisfaction by continuing our profit sharing plan and employee
recognition programs and to reward customer loyalty with the popular OnePass frequent flyer
program, upgrades and access to Presidents Club lounges.
 
    
    Capitalize on opportunities at AeroRepública.We are seeking to enhance AeroRepúblicas
profitability through a variety of initiatives, including, expanding its international
routes, capitalizing on aircraft interchange with Copa, integrating its route network with
Copas and improving overall efficiency.
  25




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##### Table of Contents



AeroRepública
    Industry
     2008 IATA Traffic Results(1)Passengers
    
    
    
    
    
    
    PassengerCarried
    
    
    
    
    
    
    Miles(Thousands)
    
    
    Change (%)
    
    
    (Millions)
    
    
    Change (%)
    
    
    ASMs (Million)
    
    
    Change (%)
    
    
    Load FactorInternational Scheduled ServiceNorth America  Central America
    
    
    34,327
    
    
    
    3.2
    %
    
    
    50,046
    
    
    
    3.1
    %
    
    
    64,979
    
    
    
    0.7
    %
    
    
    77.0
    %North America  South America
    
    
    10,699
    
    
    
    5.0
    %
    
    
    32,076
    
    
    
    3.1
    %
    
    
    41,080
    
    
    
    3.0
    %
    
    
    78.1
    %Central America  South America
    
    
    1,539
    
    
    
    8.5
    %
    
    
    2,216
    
    
    
    13.4
    %
    
    
    3,080
    
    
    
    8.6
    %
    
    
    72.0
    %Within Central America
    
    
    2,543
    
    
    
    0.2
    %
    
    
    1,431
    
    
    
    8.5
    %
    
    
    2,218
    
    
    
    13.8
    %
    
    
    64.5
    %Within South America
    
    
    12,437
    
    
    
    18.4
    %
    
    
    11,231
    
    
    
    14.9
    %
    
    
    15,263
    
    
    
    15.8
    %
    
    
    73.6
    %Domestic Scheduled ServiceCentral America
    
    
    8,693
    
    
    
    -16.7
    %
    
    
    5,636
    
    
    
    -12.9
    %
    
    
    8,085
    
    
    
    -18.3
    %
    
    
    69.7
    %South America
    
    
    38,119
    
    
    
    5.3
    %
    
    
    20,966
    
    
    
    8.5
    %
    
    
    29,858
    
    
    
    10.3
    %
    
    
    70.2
    %
 
 (1)
    
    IATA passenger traffic data is not yet available for 2009.  26




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##### Table of Contents



GDP
    
    
    GDP per Capita2009 GDP
    
    
    
    
    
    
    2009 GDP per CapitaCurrent Prices
    
    
    2009 Real GDP
    
    
    Current Prices(US$bn)
    
    
    (% Growth)
    
    
    (US$)Brazil
    
    
    1,482
    
    
    
    -0.7
    %
    
    
    7,737Argentina
    
    
    301
    
    
    
    -2.5
    %
    
    
    7,508Chile
    
    
    150
    
    
    
    -1.7
    %
    
    
    8,853Mexico
    
    
    866
    
    
    
    -7.3
    %
    
    
    8,040Colombia
    
    
    229
    
    
    
    -0.2
    %
    
    
    4,661Panama
    
    
    25
    
    
    
    1.8
    %
    
    
    7,145USA
    
    
    14,266
    
    
    
    -2.7
    %
    
    
    46,443
 
 Source:
    
    International Monetary Fund, World Economic Outlook Database,
October 2009; real GDP growth calculated in local currency    Route Network and Schedules
 Copa
   27




---



##### Table of Contents



Revenue by Region
 Year Ended December 31,Region
    
    2007
    
    
    2008
    
    
    2009North America(1)
    
    
    18.9
    %
    
    
    14.4
    %
    
    
    14.4
    %South America
    
    
    46.1
    %
    
    
    55.4
    %
    
    
    57.2
    %Central America(2)
    
    
    26.2
    %
    
    
    23.7
    %
    
    
    21.7
    %Caribbean(3)
    
    
    8.8
    %
    
    
    6.6
    %
    
    
    6.6
    %
 
 (1)
    
    The United States, Canada and Mexico.(2)
    
    Includes Panama.(3)
    
    Cuba, Dominican Republic, Haiti, Jamaica, Puerto Rico, Trinidad and Tobago  28




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##### Table of Contents



AeroRepública
  Date ServiceDestinations Served
    
    CommencedBarranquilla
    
    Jun 1995Bogotá
    
    Jun 1993Bucaramanga
    
    May 1995Cali
    
    Jun 1993Caracas, Venezuela
    
    May 2008Cartagena
    
    Jun 1993Cúcuta
    
    Nov 2005Leticia
    
    Nov 1993Medellín
    
    Oct 1994Montería
    
    Jul 1994Panama City, Panama
    
    Dec 2005Pereira
    
    Mar 2003San Andrés
    
    Jun 1993Santa Marta
    
    Jun 1993Quito, Ecuador
    
    Dec 2009
     Airline Operations
 Passenger Operations
    29




---



##### Table of Contents



Cargo Operations
  Pricing and Revenue Management
 Copa
   AeroRepública
  Relationship with Continental Airlines
     30




---



##### Table of Contents



Sales, Marketing and Distribution
 Copa
 Sales and Distribution.
      31




---



##### Table of Contents



Advertising and Promotional Activities.
 AeroRepública
  Competition
        32




---



##### Table of Contents



Aircraft
 Copa
   AverageTermof Lease
    
    
    AverageNumber of Aircraft
    
    
    Remaining
    
    
    Age
    
    
    SeatingTotal
    
    
    Owned
    
    
    Leased
    
    
    (Years)
    
    
    (Years)
    
    
    CapacityBoeing 737-700
    
    
    20
    
    
    
    14
    
    
    
    6
    
    
    
    2.2
    
    
    
    7.5
    
    
    
    124Boeing 737-800
    
    
    9
    
    
    
    7
    
    
    
    2
    
    
    
    5.3
    
    
    
    3.3
    
    
    
    160Embraer 190
    
    
    13
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    2.6
    
    
    
    94Total
    
    
    42
    
    
    
    34
    
    
    
    8
    
    
    
    3.0
    
    
    
    5.1
    
    
    
    
  33




---



##### Table of Contents



Aircraft Type
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014737-700(1)
    
    
    20
    
    
    
    18
    
    
    
    13
    
    
    
    13
    
    
    
    13737-800(2)
    
    
    17
    
    
    
    22
    
    
    
    27
    
    
    
    31
    
    
    
    35Embraer 190(3)
    
    
    11
    
    
    
    11
    
    
    
    11
    
    
    
    11
    
    
    
    11Total Fleet
    
    
    48
    
    
    
    51
    
    
    
    51
    
    
    
    55
    
    
    
    59
 (1)
    
    Assumes the return of leased aircraft upon expiration of lease contracts.(2)
    
    We have the flexibility to choose between the Boeing 737-700 or the Boeing 737-800 aircraft for most of the 737-700 aircraft
deliveries.(3)
    
    Assumes that two additional Embraer 190 aircraft from Copa are transferred to AeroRepublica during 2010.  
    
    They have simplified maintenance procedures.
 
    
    They require just one type of standardized training for our crews.
 
    
    They have one of the lowest operating costs in their class.
   Clase
Ejecutiva
  34




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##### Table of Contents



AeroRepública
  Maintenance
 Copa
   AeroRepública
   35




---



##### Table of Contents



Safety
    Airport Facilities
  
    
    Panamas consistently temperate climate is ideal for airport operations. For
example, in recent years Tocumen was closed and unavailable for flight operations
for a total of less than two hours per year on average
 
    
    Tocumen is the only airport in Central America with two operational runways.
Also unlike some other regional airports, consistent modernization and growth of
our hub has kept pace with our needs. The Tocumen airport recently began an
expansion project which is scheduled to be completed in 2011, and there is ample
room for further expansion.
 
    
    Panamas central and sea level location provides a very efficient base to
operate our narrow body fleet, efficiently serving short and long-haul destinations
in Central, North and South America.
 
    
    Travelers can generally make connections easily through Tocumen because of its
manageable size and Panamas policies accommodating in-transit passengers.
     36




---



##### Table of Contents



Fuel
  Aircraft Fuel Data2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009CopaAverage price per gallon of jet
fuel into plane (excluding hedge)
(in U.S. dollars)
    
    $
    1.87
    
    
    $
    2.10
    
    
    $
    2.29
    
    
    $
    3.21
    
    
    $
    1.84Gallons consumed (in thousands)
    
    
    58,924
    
    
    
    70,770
    
    
    
    85,463
    
    
    
    100,266
    
    
    
    112,401Available seat miles (in millions)
    
    
    4,409
    
    
    
    5,239
    
    
    
    6,298
    
    
    
    7,342
    
    
    
    8,319Gallons per ASM (in hundredths)
    
    
    1.34
    
    
    
    1.35
    
    
    
    1.36
    
    
    
    1.37
    
    
    
    1.35AeroRepública(1)Average price per gallon of jet
fuel into plane (excluding hedge)
(in U.S. dollars)
    
    $
    2.12
    
    
    $
    2.24
    
    
    $
    2.43
    
    
    $
    3.49
    
    
    $
    1.97Gallons consumed (in thousands)
    
    
    17,887
    
    
    
    28,321
    
    
    
    26,984
    
    
    
    24,798
    
    
    
    25,617Available seat miles (in millions)
    
    
    950
    
    
    
    1,627
    
    
    
    1,620
    
    
    
    1,503
    
    
    
    1,592Gallons per ASM (in hundredths)
    
    
    1.88
    
    
    
    1.74
    
    
    
    1.67
    
    
    
    1.65
    
    
    
    1.61
 
 (1)
    
    Since April 22, 2005.  Insurance
   37




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##### Table of Contents



Environmental
  Regulation
 Panama
 Authorization and Licenses.
   Safety Assessment.
  38




---



##### Table of Contents



Ownership Requirements.
  Antitrust Regulations
 Noise Restrictions
  39




---



##### Table of Contents



Colombia
   U.S.
  Authorizations and Licenses.
   40




---



##### Table of Contents



Security.
 Passenger Facility Charges.
 Airport Access.
 Noise Restrictions.
 Other Regulation.
  41




---



##### Table of Contents



Other Jurisdictions
  C. Organizational Structure
  
 *
    
    Includes ownership by us held through wholly-owned holding companies organized in the
British Virgin Islands.  D. Property, Plants and Equipment
 Headquarters
  Other Property
   42




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##### Table of Contents



Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
 A. Operating Results
 You should read the following discussion in conjunction with our consolidated financial
statements and the related notes and the other financial information included elsewhere in this
annual report.
       43




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##### Table of Contents



Our 2005 acquisition of AeroRepública has affected the comparability of our recent results of
operations.
   Regional Economic Environment
  The Preliminary Overview of the Economies of Latin America and the
Caribbean
  44




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##### Table of Contents



Revenues
      Year Ended December 31,2007
    
    
    2008
    
    
    2009Copa SegmentCapacity (in available seat miles, in millions)
    
    
    6,297.9
    
    
    
    7,341.9
    
    
    
    8,319.0Load factor
    
    
    78.4
    %
    
    
    78.8
    %
    
    
    76.0
    %Yield (in cents)
    
    
    15.33
    
    
    
    16.81
    
    
    
    15.25AeroRepública SegmentCapacity (in available seat miles, in millions)
    
    
    1,620.4
    
    
    
    1,502.7
    
    
    
    1,591.7Load factor
    
    
    57.2
    %
    
    
    61.7
    %
    
    
    67.5
    %Yield (in cents)
    
    
    22.74
    
    
    
    26.31
    
    
    
    20.71
 Seasonality
  Operating Expenses
  Aircraft fuel.
  45




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##### Table of Contents



Aircraft Fuel Data2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Copa SegmentAverage price per gallon of jet
fuel into plane (excluding hedge)
(in U.S. dollars)
    
    $
    1.87
    
    
    $
    2.10
    
    
    $
    2.29
    
    
    $
    3.21
    
    
    $
    1.84Gallons consumed (in thousands)
    
    
    58,924
    
    
    
    70,770
    
    
    
    85,463
    
    
    
    100,266
    
    
    
    112,401Available seat miles (in millions)
    
    
    4,409
    
    
    
    5,239
    
    
    
    6,298
    
    
    
    7,342
    
    
    
    8,319Gallons per ASM (in hundredths)
    
    
    1.34
    
    
    
    1.35
    
    
    
    1.36
    
    
    
    1.37
    
    
    
    1.35AeroRepública(1)Average price per gallon of jet
fuel into plane (excluding hedge)
(in U.S. dollars)
    
    $
    2.12
    
    
    $
    2.24
    
    
    $
    2.43
    
    
    $
    3.49
    
    
    $
    1.97Gallons consumed (in thousands)
    
    
    17,887
    
    
    
    28,321
    
    
    
    26,984
    
    
    
    24,798
    
    
    
    25,617Available seat miles (in millions)
    
    
    950
    
    
    
    1,627
    
    
    
    1,620
    
    
    
    1,503
    
    
    
    1,592Gallons per ASM (in hundredths)
    
    
    1.88
    
    
    
    1.74
    
    
    
    1.67
    
    
    
    1.65
    
    
    
    1.61
 
 (1)
    
    Since April 22, 2005. Salaries and benefits.
 Passenger servicing expenses.
 Commissions.
 Maintenance, material and repair expenses.
   46




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##### Table of Contents



Aircraft rent.
 Reservations and sales expenses.
 Flight operations landing fees and other rentals
 Other
 Taxes
     47




---



##### Table of Contents



Critical Accounting Policies and Estimates
   Revenue recognition.
 Goodwill and indefinite-lived purchased intangible assets.
 Derivative instruments and hedging activities.
   48




---



##### Table of Contents



Maintenance and repair costs.
  Adopted and Recently Issued Accounting Pronouncement
    49




---



##### Table of Contents



Gain from Involuntary Conversion
  Special Fleet Charges
     50




---



##### Table of Contents



Subsequent Events
 Currency Devaluation
    Tax Reform
  Results of Operation
  Year Ended December 31,2007
    
    
    2008
    
    
    2009Operating revenues:Passenger revenue
    
    
    94.1
    %
    
    
    94.5
    %
    
    
    94.7
    %Cargo, mail and other
    
    
    5.9
    %
    
    
    5.5
    %
    
    
    5.3
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Aircraft fuel
    
    
    (25.8
    )%
    
    
    (31.4
    )%
    
    
    (24.0
    )%Salaries and benefits
    
    
    (11.4
    )%
    
    
    (10.8
    )%
    
    
    (12.6
    )%Passenger servicing
    
    
    (8.1
    )%
    
    
    (7.7
    )%
    
    
    (8.8
    )%Commissions
    
    
    (6.4
    )%
    
    
    (5.2
    )%
    
    
    (4.6
    )%Reservation and sales
    
    
    (4.7
    )%
    
    
    (4.3
    )%
    
    
    (4.5
    )%Maintenance, materials and repairs
    
    
    (5.0
    )%
    
    
    (5.2
    )%
    
    
    (6.1
    )%Depreciation
    
    
    (3.4
    )%
    
    
    (3.3
    )%
    
    
    (3.8
    )%Flight operations
    
    
    (4.3
    )%
    
    
    (4.4
    )%
    
    
    (4.9
    )%Aircraft rentals
    
    
    (3.8
    )%
    
    
    (3.3
    )%
    
    
    (3.7
    )%Landing fees and other rentals
    
    
    (2.6
    )%
    
    
    (2.5
    )%
    
    
    (2.7
    )%Other
    
    
    (5.4
    )%
    
    
    (4.5
    )%
    
    
    (5.0
    )%Special fleet charges
    
    
    (0.7
    )%
    
    
    
    
    
    
    (1.5
    )%Gain from involuntary conversion
    
    
    0.8
    %
    
    
    
    
    
    
    Total
    
    
    (80.8
    )%
    
    
    (82.6
    )%
    
    
    (82.2
    )%Operating income
    
    
    19.2
    %
    
    
    17.4
    %
    
    
    17.8
    %Non-operating income (expenses):Interest expense
    
    
    (4.3
    )%
    
    
    (3.3
    )%
    
    
    (2.6
    )%Interest capitalized
    
    
    0.3
    %
    
    
    0.1
    %
    
    
    0.1
    %Interest income
    
    
    1.2
    %
    
    
    0.9
    %
    
    
    0.7
    %Other, net
    
    
    1.1
    %
    
    
    (4.6
    )%
    
    
    (4.8
    )%Total
    
    
    (1.8
    )%
    
    
    (6.8
    )%
    
    
    (2.9
    )%Income/(loss) before income taxes
    
    
    17.4
    %
    
    
    10.6
    %
    
    
    20.7
    %Income taxes
    
    
    (1.7
    )%
    
    
    (1.4
    )%
    
    
    (1.6
    )%Net income
    
    
    15.8
    %
    
    
    9.2
    %
    
    
    19.2
    %
  51




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##### Table of Contents



Year 2009 Compared to Year 2008
  Operating revenue
  Copa segment operating revenue
  Passenger revenue.
 Cargo, mail and other.
 AeroRepública segment operating revenue
  Operating expenses
    Aircraft fuel.
  52




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##### Table of Contents



Salaries and benefits.
 Passenger servicing.
 Maintenance, materials and repairs.
  Copa segment operating expenses
  Year Ended December 31,
    
    
    Percent2008
    
    
    2009
    
    
    Change(in cents)Operating Expenses per ASM:Salaries and benefits
    
    
    1.48
    
    
    
    1.50
    
    
    
    1.4
    %Passenger servicing
    
    
    1.11
    
    
    
    1.12
    
    
    
    0.9
    %Commissions
    
    
    0.71
    
    
    
    0.55
    
    
    
    (22.3
    %)Reservation and sales
    
    
    0.55
    
    
    
    0.50
    
    
    
    (10.0
    %)Maintenance, materials and repairs
    
    
    0.63
    
    
    
    0.77
    
    
    
    23.4
    %Depreciation
    
    
    0.52
    
    
    
    0.52
    
    
    
    0.0
    %Flight operations
    
    
    0.64
    
    
    
    0.62
    
    
    
    (3.2
    %)Aircraft rentals
    
    
    0.43
    
    
    
    0.31
    
    
    
    (26.5
    %)Landing fees and other rentals
    
    
    0.33
    
    
    
    0.30
    
    
    
    (7.0
    %)Other
    
    
    0.55
    
    
    
    0.55
    
    
    
    (0.1
    %)Total operating expenses per ASM before
aircraft fuel
    
    
    6.94
    
    
    
    6.75
    
    
    
    (2.8
    %)Aircraft fuel
    
    
    4.33
    
    
    
    2.99
    
    
    
    (30.9
    %)Total operating expenses per ASM
    
    
    11.27
    
    
    
    9.74
    
    
    
    (13.6
    %)
 Aircraft fuel.
 Salaries and benefits.
 Passenger servicing.
  53




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##### Table of Contents



Commissions.
 Reservations and sales.
 Maintenance, materials and repairs.
 Depreciation.
 Flight operations, aircraft rentals landing fees and other rentals.
 Other.
 AeroRepública segment operating expenses
  Non-operating income (expense)
  Copa segment non-operating income (expense)
  Interest expense.
 Interest capitalized.
  54




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##### Table of Contents



Interest income.
 Other, net.
 AeroRepública segment non-operating income (expense)
  Year 2008 Compared to Year 2007
  Operating revenue
  Copa segment operating revenue
  Passenger revenue.
 Cargo, mail and other.
 AeroRepública segment operating revenue
   55




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##### Table of Contents



Operating expenses
    Aircraft fuel.
 Salaries and benefits.
 Passenger servicing.
 Commissions.
  Copa segment operating expenses
  Year Ended December 31,
    
    
    Percent2007
    
    
    2008
    
    
    Change(in cents)Operating Expenses per ASM:Salaries and benefits
    
    
    1.45
    
    
    
    1.48
    
    
    
    2.4
    %Passenger servicing
    
    
    1.09
    
    
    
    1.11
    
    
    
    1.6
    %Commissions
    
    
    0.74
    
    
    
    0.71
    
    
    
    (3.6
    %)Reservation and sales
    
    
    0.57
    
    
    
    0.55
    
    
    
    (2.6
    %)Maintenance, materials and repairs
    
    
    0.62
    
    
    
    0.63
    
    
    
    0.6
    %Depreciation
    
    
    0.49
    
    
    
    0.52
    
    
    
    6.4
    %Flight operations
    
    
    0.58
    
    
    
    0.64
    
    
    
    8.7
    %Aircraft rentals
    
    
    0.44
    
    
    
    0.43
    
    
    
    (3.4
    %)Landing fees and other rentals
    
    
    0.32
    
    
    
    0.33
    
    
    
    1.8
    %Other
    
    
    0.61
    
    
    
    0.55
    
    
    
    (8.8
    %)Total operating expenses per ASM before
aircraft fuel
    
    
    6.90
    
    
    
    6.94
    
    
    
    0.5
    %Aircraft fuel
    
    
    3.17
    
    
    
    4.33
    
    
    
    36.7
    %Total operating expenses per ASM
    
    
    10.08
    
    
    
    11.27
    
    
    
    11.9
    %
  56




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##### Table of Contents



Aircraft fuel.
 Salaries and benefits.
 Passenger servicing.
 Commissions.
 Reservations and sales.
 Maintenance, materials and repairs.
 Depreciation.
 Flight operations, aircraft rentals landing fees and other rentals.
 Other.
 AeroRepública segment operating expenses
  Non-operating income (expense)
   57




---



##### Table of Contents



Copa segment non-operating income (expense)
  Interest expense.
 Interest capitalized.
 Interest income.
 Other, net.
 AeroRepública segment non-operating income (expense)
  B. Liquidity and Capital Resources
   Operating Activities
   58




---



##### Table of Contents



Investing Activities
  Financing Activities
         59




---



##### Table of Contents



Capital resources.
    60




---



##### Table of Contents



C. Research and Development, Patents and Licenses, etc.
   D. Trend Information
     E. Off-balance sheet arrangements
  F. Tabular Disclosure of Contractual Obligations
  At December 31, 2009Less than
    
    
    1-3
    
    
    3-5
    
    
    More thanTotal
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(in thousands of dollars)Aircraft and engine purchase commitments
    
    
    980,883
    
    
    
    246,243
    
    
    
    347,587
    
    
    
    319,975
    
    
    
    67,078Aircraft operating leases
    
    
    226,557
    
    
    
    46,670
    
    
    
    79,433
    
    
    
    53,038
    
    
    
    47,416Other operating leases
    
    
    35,935
    
    
    
    9,741
    
    
    
    13,536
    
    
    
    9,396
    
    
    
    3,262Short-term debt and long-term debt(1)
    
    
    937,630
    
    
    
    122,271
    
    
    
    206,184
    
    
    
    190,124
    
    
    
    419,051Total
    
    
    2,181,005
    
    
    
    424,925
    
    
    
    646,740
    
    
    
    572,533
    
    
    
    536,807
 (1)
    
    Includes actual interest and estimated interest for floating-rate debt based on December 31, 2009 rates.  61




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##### Table of Contents



Item 6. Directors, senior management and employees
 A. Directors and Senior Management
   Name
    
    Position
    
    AgePedro Heilbron
    
    Chief Executive Officer and Director
    
    
    52Stanley Motta
    
    Chairman and Director
    
    
    64Osvaldo Heilbron
    
    Director
    
    
    84Jaime Arias
    
    Director
    
    
    75Ricardo Alberto Arias
    
    Director
    
    
    70Alberto C. Motta, Jr.
    
    Director
    
    
    63Mark Erwin
    
    Director
    
    
    54Joseph Fidanque III
    
    Director
    
    
    43Jose Castañeda Velez
    
    Director
    
    
    65Roberto Artavia Loria
    
    Director
    
    
    51Alfredo Arias Loredo
    
    Director
    
    
    63
 Mr. Pedro Heilbron
 Mr. Stanley Motta
 Mr. Osvaldo Heilbron
 Mr. Jaime Arias
  62




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##### Table of Contents



Mr. Ricardo Arias
 Mr. Alberto Motta, Jr.
 Mr. Mark Erwin
 Mr. Joseph Fidanque III
 Mr. Roberto Artavia Loria
 Mr. José Castañeda Velez
 Mr. Alfredo Arias Loredo
  63




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##### Table of Contents



Name
    
    Position
    
    AgePedro Heilbron
    
    Chief Executive Officer
    
    
    52Victor Vial
    
    Chief Financial Officer
    
    
    44Daniel Gunn
    
    Senior Vice-President of Operations
    
    
    42Leo Marchosky
    
    Vice-President of Human Resources
    
    
    53Joe Mohan
    
    Vice-President of Commercial and Planning
    
    
    40Jaime Aguirre
    
    Vice-President of Maintenance
    
    
    47Vidalia de Casado
    
    Vice-President of On-Board Services
    
    
    52David Lindskoog
    
    Vice-President of Flight Operations
    
    
    59Peter Diaz
    
    Vice-President of Airport Services
    
    
    43Roberto Junguito Pombo
    
    Chief Executive Officer of AeroRepública
    
    
    39
 Mr. Pedro Heilbron
 Mr. Victor Vial
 Mr. Daniel Gunn
 Dr. Leo Marchosky
 Mr. Joe Mohan
 Mr. Jaime Aguirre
 Ms. Vidalia de Casado
 Captain David Lindskoog
  64




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##### Table of Contents



Mr. Peter Díaz
 Mr. Roberto Junguito Pombo
  B. Compensation
   Incentive Compensation Program
     65




---



##### Table of Contents



C. Board Practices
    Committees of the Board of Directors
 Audit Committee.
 
    
    the integrity of financial reports and other financial information made
available to the public or any regulator or governmental body;
 
    
    the effectiveness of our internal financial control and risk management systems;
the effectiveness of our internal audit function, the independent audit process
including the appointment, retention, compensation, and supervision of the
independent auditor; and
 
    
    the compliance with laws and regulations, as well as the policies and ethical
codes established by management and the Board of Directors.
    66




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##### Table of Contents



Compensation Committee.
 Nominating and Corporate Governance Committee.
 Independent Directors Committee.
 
    
    any transactions in excess of $5 million between us and our controlling
shareholders,
 
    
    the designation of certain primary share issuances that will not be included in
the calculation of the percentage ownership pertaining to the Class B shares for
purposes of determining whether the Class A shares should be converted to voting
 shares under our Articles of Incorporation, and
 
    
    the issuance of additional Class B shares or Class C shares to ensure Copa
Airlines compliance with aviation laws and regulations.
  D. Employees
   67




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##### Table of Contents



December 31,2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Pilots
    
    
    235
    
    
    
    299
    
    
    
    375
    
    
    
    492
    
    
    
    529Flight attendants
    
    
    448
    
    
    
    514
    
    
    
    575
    
    
    
    719
    
    
    
    783Mechanics
    
    
    200
    
    
    
    155
    
    
    
    213
    
    
    
    247
    
    
    
    249Customer service agents, reservation
agents, ramp and other
    
    
    1,626
    
    
    
    1,861
    
    
    
    1,898
    
    
    
    2,270
    
    
    
    2,143Management and clerical
    
    
    587
    
    
    
    675
    
    
    
    742
    
    
    
    807
    
    
    
    1,068Total employees
    
    
    3,096
    
    
    
    3,504
    
    
    
    3,803
    
    
    
    4,535
    
    
    
    4,772
    Asociación Colombiana de Aviadores Civiles Asociación Colombiana de Auxiliares de Vuelo
 E. Share Ownership
   68




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##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
 A. Major Shareholders
  Class A SharesBeneficially OwnedShares
    
    
    (%)(1)CIASA(2)
    
    
    
    
    
    
    Executive officers and directors as a group (20 persons)
    
    
    98,069
    
    
    
    0.3
    %Bank of America Corp.(3)
    
    
    2,243,288
    
    
    
    7.3
    %Others
    
    
    28,225,496
    
    
    
    92.3
    %Total
    
    
    30,566,853
    
    
    
    100
    %
 
 (1)
    
    Based on a total of 30,566,853 Class A shares outstanding.(2)
    
    CIASA owns 100% of the Class B shares of Copa Holdings, representing 29.1% of our total capital
stock.(3)
    
    Based on a Schedule 13G filed with the SEC, dated February 2, 2010, in which Bank of America
Corp. and certain related parties, reported beneficial ownership of 2,243,288 Class A Shares.      69




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##### Table of Contents



B. Related Party and Certain Significant Transactions
 Supplemental Agreement
  Registration Rights Agreement
  Commercial Agreements with Continental
  Alliance Agreement.
 Services Agreement.
  70




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##### Table of Contents



Frequent Flyer Participation Agreement.
 Trademark License Agreement.
 Agreements with our controlling shareholders and their affiliates
  Banco General, S.A.
  ASSA Compañía de Seguros, S.A.
  Petróleos Delta, S.A.
   71




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##### Table of Contents



Desarollo Inmobiliario del Este, S.A.
  Galindo, Arias & Lopez
  Other Transactions
     C. Interests of Experts and Counsel
  
 Item 8. Financial Information
 A. Consolidated Statements and Other Financial Information
   72




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##### Table of Contents



Legal Proceedings
  Adicional das
Tarifas Aeroportuárias
 Dividends and Dividend Policy
    B. Significant Changes
   73




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##### Table of Contents



Item 9. The Offer and Listing
 A. Offer and Listing Details
  Low
    
    
    High2005Annual(1)
    
    
    21.95
    
    
    
    27.402006Annual
    
    
    20.31
    
    
    
    49.052007Annual
    
    
    30.25
    
    
    
    73.332008Annual
    
    
    18.00
    
    
    
    43.64First quarter
    
    
    30.00
    
    
    
    41.97Second quarter
    
    
    27.53
    
    
    
    43.64Third quarter
    
    
    24.69
    
    
    
    42.00Fourth quarter
    
    
    18.00
    
    
    
    34.002009Annual
    
    
    20.36
    
    
    
    56.78First quarter
    
    
    20.36
    
    
    
    33.10Second quarter
    
    
    27.20
    
    
    
    42.17Third quarter
    
    
    38.15
    
    
    
    46.70Fourth quarter
    
    
    40.00
    
    
    
    56.78Last Six MonthsSeptember 2009
    
    
    38.66
    
    
    
    46.70October 2009
    
    
    40.00
    
    
    
    47.61November 2009
    
    
    41.13
    
    
    
    51.35December 2009
    
    
    50.55
    
    
    
    56.78January 2010
    
    
    50.33
    
    
    
    58.37February 2010
    
    
    47.76
    
    
    
    56.33
 
 (1)
    
    Period beginning December 14, 2005 through December 31, 2005 B. Plan of Distribution
  C. Markets
  D. Selling Shareholders
  E. Dilution
  F. Expenses of the Issue
   74




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##### Table of Contents



Item 10. Additional Information
 A. Share Capital
  B. Memorandum and Articles of Association
 (sociedad anónima)
 Objects and Purposes
  Description of Capital Stock
 The
following is a summary of the material terms of Copa Holdings capital stock and a brief
summary of certain significant provisions of Copa Holdings Articles of Incorporation. This
description contains all material information concerning the common stock but does not purport to
be complete. For additional information regarding the common stock, reference is made to the
Articles of Incorporation, a copy of which has been filed as an
exhibit to this Form 20-F.
 For purposes of this section only, reference to our or the company shall refer only to
Copa Holdings and references to Panamanians shall refer to those entities or natural persons that
are considered Panamanian nationals under the Panamanian Aviation Act, as it may be amended or
interpreted.
 Common Stock
  Class A Shares
  
    
    a transformation of Copa Holdings into another corporate type;
 
    
    a merger, consolidation or spin-off of Copa Holdings;
 
    
    a change of corporate purpose;
 
    
    voluntarily delisting Class A shares from the NYSE;
 
    
    approving the nomination of Independent Directors nominated by our board of
directors Nominating and Corporate Governance Committee following our next annual
general shareholders meeting; and
 
    
    any amendment to the foregoing special voting provisions adversely affecting the
rights and privileges of the Class A shares.
   75




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##### Table of Contents



Class B Shares
  Class C Shares
  Restrictions on Transfer of Common Stock; Conversion of Class B Shares
    76




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##### Table of Contents



Tag-along Rights
  Aviation Rights Protections
   
    
    authorize the issuance of additional Class B shares to Panamanians at a price
determined by the Independent Directors to reflect the current market value of such
 shares or
 
    
    authorize the issuance to Class B shareholders such number of Class C shares as the
Independent Directors Committee, or the Board of Directors if applicable, deems
necessary and with such other terms and conditions established by the Independent
Directors Committee that do not confer economic rights on the Class C shares.
 Dividends
   77




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##### Table of Contents



Shareholder Meetings
 Ordinary Meetings
  Extraordinary Meetings
  Vote required
  Notice and Location
   Quorum
  Proxy Representation
   78




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##### Table of Contents



Other Shareholder Rights
    Listing
  Transfer Agent and Registrar
  Summary of Significant Differences between Shareholders Rights and Other Corporate Governance
Matters Under Panamanian Corporation Law and Delaware Corporation Law
 sociedad anónima
 Panama
    
    DelawareDirectorsConflict of Interest Transactions.
Transactions involving a Panamanian
corporation and an interested
director or officer are initially
subject to the approval of the board
of directors.
    
    Conflict of Interest Transactions. Transactions
involving a Delaware corporation and an
interested director
of that corporation are
generally
permitted if:At the next shareholders meeting,
shareholders will then have the
right to disapprove the board of
directors decision and to decide to
take legal actions against the
directors or officers who voted in
favor of the transaction.
    
    (1) the material facts as to the interested
directors relationship or interest are disclosed
and a majority of disinterested directors approve
the transaction;
(2) the material facts are disclosed as to the
interested directors relationship or interest
and the stockholders approve the transaction; or(3) the transaction is fair to the corporation
at the time it is authorized by the board of
directors, a committee of the board of directors
or the stockholders.
  79




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##### Table of Contents



Panama
    
    DelawareTerms. Panamanian law does not set
limits on the length of the terms
that a director may serve. Staggered
terms are allowed but not required.
    
    Terms. The Delaware General Corporation Law
generally provides for a one-year term for
directors. However, the directorships may be
divided into up to three classes with up to
three-year terms, with the years for each class
expiring in different years, if permitted by the
articles of incorporation, an initial by-law or a
by-law adopted by the shareholders.Number. The board of directors must
consist of a minimum of three
members, which could be natural
persons or legal entities.
    
    Number. The board of directors must consist of a
minimum of one member.Authority to take Actions. In
general, a simple majority of the
board of directors is necessary and
sufficient to take any action on
behalf of the board of directors.
    
    Authority to take Actions. The articles of
incorporation or by-laws can establish certain
actions that require the approval of more than a
majority of directors.Shareholder Meetings and Voting RightsQuorum. The quorum for shareholder
meetings must be set by the articles
of incorporation or the by-laws. If
the articles of incorporation and
the notice for a given meeting so
provide, if quorum is not met a new
meeting can be immediately called
and quorum shall consist of those
present at such new meeting.
    
    Quorum. For stock corporations, the articles of
incorporation or bylaws may specify the number to
constitute a quorum but in no event shall a
quorum consist of less than one-third of shares
entitled to vote at a meeting. In the absence of
such specifications, a majority of shares
entitled to vote shall constitute a quorum.Action by Written Consent.
Panamanian law does not permit
shareholder action without formally
calling a meeting.
    
    Action by Written Consent. Unless otherwise
provided in the articles of incorporation, any
action required or permitted to be taken at any
annual meeting or special meeting of stockholders
of a corporation may be taken without a meeting,
without prior notice and without a vote, if a
consent or consents in writing, setting forth the
action to be so taken, is signed by the holders
of outstanding shares having not less than the
minimum number of votes that would be necessary
to authorize or take such action at a meeting at
which all shares entitled to vote thereon were
present and noted.Other Shareholder RightsShareholder Proposals. Shareholders
representing 5% of the issued and
outstanding capital of the
corporation have the right to
require a judge to call a general
shareholders meeting and to propose
the matters for vote.
    
    Shareholder Proposals. Delaware law does not
specifically grant shareholders the right to
bring business before an annual or special
meeting. If a Delaware corporation is subject to
the SECs proxy rules, a shareholder who owns for at least one
year by the date of the proposal at
least $2,000 in market value, or 1% of the
corporations securities entitled to vote, may
propose a matter for a vote at an annual or
special meeting in accordance with those rules.Appraisal Rights. Shareholders of
Panamanian corporation do not have
the right to demand payment in cash
of the judicially determined fair
value of their shares in connection
with a merger or consolidation
involving the corporation.
Nevertheless, in a merger, the
majority of shareholders could
approve the total or partial
distribution of cash, instead of
shares, of the surviving entity.
    
    Appraisal Rights. Delaware law affords
shareholders in certain cases the right to demand
payment in cash of the judicially-determined fair
value of their shares in connection with a merger
or consolidation involving their corporation.
However, no appraisal rights are available if,
among other things and subject to certain
exceptions, such shares were listed on a national
securities exchange or designated national market
system or such shares were held of record by more
than 2,000 holders.
  80




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Panama
    
    DelawareShareholder Derivative Actions. Any
shareholder, with the consent of the
majority of the shareholders, can
sue on behalf of the corporation,
the directors of the corporation for
a breach of their duties of care and
loyalty to the corporation or a
violation of the law, the articles
of incorporation or the by-laws.
    
    Shareholder Derivative Actions. Subject to
certain requirements that a shareholder make
prior demand on the board of directors or have an
excuse not to make such demand, a shareholder may
bring a derivative action on behalf of the
corporation to enforce the rights of the
corporation against officers, directors and third
parties. An individual may also commence a class
action suit on behalf of himself and other
similarly-situated stockholders if the
requirements for maintaining a class action under
the Delaware General Corporation Law have been
met. Subject to equitable principles, a
three-year period of limitations generally
applies to such shareholder suits against
officers and directors.Inspection of Corporate Records.
Shareholders representing at least
5% of the issued and outstanding
shares of the corporation have the
right to require a judge to appoint
an independent auditor to examine
the corporate accounting books, the
background of the companys
incorporation or its operation.
    
    Inspection of Corporate Records. A shareholder
may inspect or obtain copies of a corporations
shareholder list and its other books and records
for any purpose reasonably related to a persons
interest as a shareholder.Anti-takeover ProvisionsPanamanian corporations may include
in their articles of incorporation
or by-laws classified board and
super-majority provisions.
    
    Delaware corporations may have a classified
board, super-majority voting
and shareholders
rights plan.Panamanian corporation laws
anti-takeover provisions apply only
to companies that are:
(1) registered with the CNV for a
period of six months before the
public offering,
(2) have over 3,000
shareholders, and 
(3) have a permanent office in
Panama with full time employees and
investments in the country for more
than $1,000,000.
    
    Unless Delaware corporations specifically elect
otherwise, Delaware corporations may not enter
into a business combination, including mergers,
sales and leases of assets, issuances of
securities and similar transactions, with an
interested stockholder, or one that
beneficially owns 15% or more of a corporations
voting stock, within three years of such person
becoming an
interested shareholder
unless:These provisions are triggered when
a buyer makes a public offer to
acquire 5% or more of any class of
shares with a market value of at
least $5,000,000. In sum, the buyer
must deliver to the corporation a
complete and accurate statement that
includes
(1) the name of the company, the
number of the shares that the buyer
intends to acquire and the purchase
price;(2) the identity and background of
the person acquiring the shares;
    
    (1) the transaction that will cause the person to
become an interested shareholder is approved by
the board of directors of the target prior to the
transactions;
(2) after the completion of the transaction in
which the person becomes an interested
shareholder, the interested shareholder holds at
least 85% of the voting stock of the corporation
not including shares owned by persons who are
directors and also officers of interested
shareholders and shares owned by specified
employee benefit plans; or
  81




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Panama
    
    Delaware(3) the source and amount of the
funds or other goods that will be
used to pay the purchase price;(4) the plans or project the buyer
has once it has acquired the control
of the company;
    
    (3) after the person becomes an interested
shareholder, the business combination is approved
by the board of directors of the corporation and
holders of at least 66.67% of the outstanding
voting stock, excluding shares held by the
interested shareholder.(5) the number of shares of the
company that the buyer already has
or is a beneficiary of and those
owned by any of its directors,
officers, subsidiaries, or partners
or the same, and any transactions
made regarding the shares in the
last 60 days;(6) contracts, agreements, business
relations or negotiations regarding
securities issued by the company in
which the buyer is a party;(7) contract, agreements, business
relations or negotiations between
the buyer and any director, officer
or beneficiary of the securities;
and(8) any other significant
information. This declaration will
be accompanied by, among other
things, a copy of the buyers
financial statements.If the board of directors believes
that the statement does not contain
all required information or that the
statement is inaccurate, the board
of directors must send the statement
to the CNV within 45 days from the
buyers initial delivery of the
statement to the CNV. The CNV may
then hold a public hearing to
determine if the information is
accurate and complete and if the
buyer has complied with the legal
requirements. The CNV may also start
an inquiry into the case, having the
power to decide whether or not the
offer may be made.Regardless of the above, the board
of directors has the authority to
submit the offer to the
consideration of the shareholders.
The board should only convene a
shareholders meeting when it deems
the statement delivered by the
offeror to be complete and accurate.
If convened, the shareholders
meeting should take place within the
next 30 days. At the shareholders
meeting, two-thirds of the holders
of the issued and outstanding shares
of each class of shares of the
corporation with a right to vote
must approve the offer and the offer
is to be executed within 60 days
from the shareholders approval. If
the board decides not to convene the
shareholders meeting within 15 days
following the receipt of a complete
and accurate statement from the
offeror, shares may then be
purchased. In all cases, the
purchase of shares can take place
only if it is not prohibited by an
administrative or judicial order or
injunction.
  82




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Panama
    
    DelawareThe law also establishes some
actions or recourses of the sellers
against the buyer in cases the offer
is made in contravention of the law.Previously Acquired RightsIn no event can the vote of the
majority shareholders deprive the
shareholders of a corporation of
previously-acquired rights.
Panamanian jurisprudence and
doctrine has established that the
majority shareholders cannot amend
the articles of incorporation and
deprive minority shareholders of
previously-acquired rights nor
impose upon them an agreement that
is contrary to those articles of
incorporation.
    
    No comparable provisions exist under Delaware law.Once a share is issued, the
shareholders become entitled to the
rights established in the articles
of incorporation and such rights
cannot be taken away, diminished nor
extinguished without the express
consent of the shareholders entitled
to such rights. If by amending the
articles of incorporation, the
rights granted to a class of
shareholders is somehow altered or
modified to their disadvantage,
those shareholders will need to
approve the amendment unanimously.
 C. Material Contracts
 Commercial Agreements with Continental Airlines
  Alliance Agreement between Continental and Copa Airlines.
 Services Agreement between Continental and Copa Airlines.
 Frequent Flyer Participation Agreement between Continental and Copa Airlines.
  83




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##### Table of Contents



Trademark License Agreement between Continental and Copa Airlines.
 Aircraft General Terms Agreement between The Boeing Company and Copa Airlines
  Purchase Agreement between Empresa Brasileira de Aeronautica, S.A. and Copa Airlines
  Purchase Agreement between Empresa Brasileira de Aeronautica, S.A. and Copa Holdings, S.A.
  D. Exchange Controls
  E. Taxation
 United States
  
    
    a bank;
 
    
    a dealer in securities or currencies;
 
    
    a financial institution;
 
    
    a regulated investment company;
 
    
    a real estate investment trust;
 
    
    an insurance company;
 
    
    a tax-exempt organization;
  84




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##### Table of Contents




    
    a person holding our Class A shares as part of a hedging, integrated or conversion
transaction, a constructive sale or a straddle;
 
    
    a trader in securities that has elected the mark-to-market method of accounting for
your securities;
 
    
    a person liable for alternative minimum tax;
 
    
    a person who owns 10% or more of our voting stock;
 
    
    a partnership or other pass-through entity for United States federal income tax
purposes; or
 
    
    a person whose functional currency is not the United States dollar.
  If you are considering the purchase, ownership or disposition of our Class A shares, you
should consult your own tax advisors concerning the United States federal income tax consequences
to you in light of your particular situation as well as any consequences arising under the laws of
any other taxing jurisdiction.
  
    
    an individual citizen or resident of the United States;
 
    
    a corporation (or other entity treated as a corporation for United States federal
income tax purposes) created or organized in or under the laws of the United States,
any state thereof or the District of Columbia;
 
    
    an estate the income of which is subject to United States federal income taxation
regardless of its source; or
 
    
    a trust if it (1) is subject to the primary supervision of a court within the United
States and one or more United States persons have the authority to control all
substantial decisions of the trust or (2) has a valid election in effect under
applicable United States Treasury regulations to be treated as a United States person.
 Taxation of Dividends
    85




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##### Table of Contents




    
    have held Class A shares for less than a specified minimum period during which you
are not protected from risk of loss, or
 
    
    are obligated to make payments related to the dividends,
   Passive Foreign Investment Company
  Taxation of Capital Gains
  Information reporting and backup withholding
   86




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##### Table of Contents



Panamanian Taxation
  Taxation of dividends
  Taxation of capital gains
  Other Panamanian taxes
  F. Dividends and Paying Agents
  G. Statement by Experts
  H. Documents on Display
    87




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##### Table of Contents



I. Subsidiary Information
  
 Item 11. Quantitative and Qualitative Disclosures about Market Risk
  Aircraft Fuel.
 Interest.
 Foreign Currencies.
 2009 Revenues and Expenses Breakdown by Currency
 Revenue
    
    
    ExpenseArgentinean Peso
    
    
    6.4
    %
    
    
    2.2
    %Brazilian Real
    
    
    6.3
    %
    
    
    3.4
    %Chilean Peso
    
    
    2.6
    %
    
    
    1.1
    %Colombian Peso
    
    
    16.9
    %
    
    
    12.5
    %Costa Rican Colon
    
    
    2.2
    %
    
    
    1.0
    %Mexican Peso
    
    
    3.1
    %
    
    
    1.4
    %U.S. Dollar
    
    
    43.4
    %
    
    
    71.0
    %Venezuelan Bolivar
    
    
    11.4
    %
    
    
    3.7
    %Other(1)
    
    
    7.8
    %
    
    
    3.7
    %
 
 (1)
    
    Dominican Peso, European Euro, Guatemalan Quetzal, Jamaican Dollar,
Honduran Lempira, Haitian Gourde, Uruguayan Peso, Bolivian Boliviano,
Trinidad and Tobago Dollar  88




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##### Table of Contents



Item 12. Description of Securities Other than Equity Securities
   89




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##### Table of Contents



PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 Disclosure controls and procedures
  Managements Report on Internal Control over Financial Reporting
     Changes in internal control
   90




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##### Table of Contents



Report of
Independent Registered Public Accounting Firm REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING The Board of Directors and Shareholders
COPA HOLDINGS, S. A. We have audited Copa Holdings, S. A. (the Company) and its subsidiaries internal control over financial reporting
as of December 31, 2009, based on criteria established in Internal            Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Comission (the COSO criteria). Copa Holdings, S. A. and its
subsidiaries management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Managements
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the companys
internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion. A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A companys internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have
a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate. In our opinion, Copa Holdings S. A. and its subsidiaries maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2009, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Copa Holdings, S. A. and its subsidiaries as of December 31, 2009 and 2008,
and related consolidated statements of income, shareholders equity, and cash flows for each of the three years in the
period ended December 31, 2009 and our report dated March 12, 2010 expressed an unqualified opinion thereon. /s/ Ernst and Young March 16, 2010

Panama City, Republic of Panama 
 Item 16. Reserved
 
 Item 16A. Audit Committee Financial Expert
   91




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Item 16B. Code of Ethics
  
 Item 16C. Principal Accountant Fees and Services
  2008
    
    
    2009Audit Fees
    
    $
    769,860
    
    
    $
    715,000Audit-Related Fees
    
    
    
    
    
    
    Tax Fees
    
    
    
    
    
    
    All Other Fees
    
    
    
    
    
    
    538,991Total
    
    $
    769,860
    
    
    $

1,253,991
 Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other Fees
   Pre-Approval Policies and Procedures
 de minimis de minimis
 
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F. Change in Registrants Certifying Accountant
   92




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##### Table of Contents



Item 16G.
    
    Corporate Governance
 Comisión Nacional de Valores
 NYSE Standards
    
    Our Corporate Governance PracticeDirector Independence.Majority of board of
directors must be
independent. §303A.01
    
    Panamanian corporate governance standards
recommend that one in every five directors
should be an independent director. The
criteria for determining independence
under the Panamanian corporate governance
standards differs from the NYSE rules. In
Panama, a director would be considered
independent as long as the director does
not directly or indirectly own 5% or more
of the issued and outstanding voting
shares of the company, is not involved in
the daily management of the company and is
not a spouse or related to the second
degree by blood or marriage to the persons
named above.Our Articles of Incorporation require us
to have three independent directors as
defined under the NYSE rules.Executive Sessions.
Non-management directors
must meet regularly in
executive sessions without
management. Independent
directors should meet alone
in an executive session at
least once a year. §303A.03
    
    There are no mandatory requirements under
Panamanian law that a company should hold,
and we currently do not hold, such
executive sessions.Nominating/corporate
governance committee.
Nominating/corporate
governance committee of
independent directors is
required. The committee must
have a charter specifying the
purpose, duties and
evaluation procedures of the
committee. §303A.04
    
    Panamanian corporate governance standards
recommend that registered companies have a
nominating committee composed of three
members of the board of directors, at
least one of which should be an
independent director, plus the chief
executive officer and the chief financial
officer. In Panama, the majority of public
corporations do not have a nominating or
corporate governance committee. Our
Articles of Incorporation require that we
maintain a Nominating and Corporate
Governance Committee with at least one
independent director until the first
shareholders meeting to elect directors
after such time as the Class A shares are
entitled to full voting rights.Compensation committee.
Compensation committee of
independent directors is
required, which must approve
executive officer
compensation. The committee
must have a charter
specifying the purpose,
duties and evaluation
procedures of the committee.
§303A.05
    
    Panamanian corporate governance standards
recommend that the compensation of
executives and directors be overseen by
the nominating committee but do not
otherwise address the need for a
compensation committee.
While we maintain a compensation committee
that operates under a charter as described
by the NYSE governance standards,
currently only one of the members of that
committee is independent.Equity compensation plans.
Equity compensation plans
require shareholder
approval, subject to limited
exemptions.
    
    Under Panamanian law, shareholder approval
is not required for equity compensation
plans.
  93




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##### Table of Contents



NYSE Standards
    
    Our Corporate Governance PracticeCode of Ethics.Corporate
governance guidelines and a
code of business conduct and
ethics is required, with
disclosure of any waiver for
directors or executive
officers. §303A.10
    
    Panamanian corporate governance standards
do not require the adoption of specific
guidelines as contemplated by the NYSE
standards, although they do require that
companies disclose differences between
their practices and a list of specified
practices recommended by the CNV.We have not adopted a set of corporate
governance guidelines as contemplated by
the NYSE, although we will be required to
comply with the disclosure requirement of
the CNV.Panamanian corporate governance standards
recommend that registered companies adopt
a code of ethics covering such topics as
its ethical and moral principles, how to
address conflicts of interest, the
appropriate use of resources, obligations
to inform of acts of corruption and
mechanism to enforce the compliance with
established rules of conduct.
 PART III
 
 Item 17.
    
    Financial Statements
  
 Item 18.
    
    Financial Statements
  
 Item 19.
    
    Exhibits
 1.1
    **
    
    English translation of the Articles of Incorporation (Pacto Social) of the Registrant2.1
    *
    
    Form of Second Amended and Restated Shareholders Agreement among Copa Holdings,
S.A., Corporación de Inversiones Aéreas, S.A. and Continental Airlines, Inc.2.2
    *
    
    Form of Amended and Restated Registration Rights Agreement among Copa Holdings,
S.A., Corporación de Inversiones Aéreas, S.A. and Continental Airlines, Inc.10.1
    **
    
    Aircraft Lease Agreement, dated as of October 1, 1998, between First Security Bank
and Compañía Panameña de Aviación, S.A., in respect of Boeing Model 737-71Q
Aircraft, Serial No. 2904710.2
    **
    
    Letter Agreement dated as of November 6, 1998 amending Aircraft Lease Agreement,
dated October 1, 1998, between First Security Bank and Compañía Panameña de
Aviación, S.A., in respect of One Boeing Model 737-71Q Aircraft, Manufacturers
Serial No. 2904710.3
    **
    
    Aircraft Lease Amendment Agreement dated as of May 21, 2004 to Aircraft Lease
Agreement, dated October 1, 1998, between First Security Bank and Compañía Panameña
de Aviación, S.A., in respect of Boeing Model 737-71Q Aircraft, Serial No. 2904710.4
    **
    
    Aircraft Lease Agreement, dated as of October 1, 1998, between First Security Bank
and Compañía Panameña de Aviación, S.A., in respect of Boeing Model 737-71Q
Aircraft, Serial No. 2904810.5
    **
    
    Letter Agreement dated as of November 6, 1998 amending Aircraft Lease Agreement,
dated as of October 1, 1998, between First Security Bank and Compañía Panameña de
Aviación, S.A., in respect of Boeing Model 737-71Q Aircraft, Serial No. 29048
  94




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##### Table of Contents



10.6
    **
    
    Aircraft Lease Amendment Agreement dated as of May 21, 2003 to Aircraft Lease
Agreement, dated October 1, 1998, between First Security Bank and Compañía Panameña
de Aviación, S.A., in respect of Boeing Model 737-71Q Aircraft, Serial No. 2904810.7
    **
    
    Aircraft Lease Agreement, dated as of November 18, 1998, between Aviation Financial
Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700
Aircraft, Serial No. 2860710.8
    **
    
    Letter Agreement No. 1 dated as of November 18, 1998 to Aircraft Lease Agreement,
dated November 18, 1998, between Aviation Financial Services Inc. and Compañía
Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 2860710.9
    **
    
    Letter Agreement No. 2 dated as of March 8, 1999 to Aircraft Lease Agreement, dated
November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de
Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 2860710.10
    **
    
    Lease Extension and Amendment Agreement dated as of April 30, 2003, to Aircraft
Lease Agreement, dated November 18, 1998, between Aviation Financial Services Inc.
and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No.
2860710.11
    **
    
    Aircraft Lease Agreement, dated as of November 18, 1998, between Aviation Financial
Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700
Aircraft, Serial No. 3004910.12
    **
    
    Letter Agreement No. 1 dated as of November 18, 1998 to Aircraft Lease Agreement,
dated November 18, 1998, between Aviation Financial Services Inc. and Compañía
Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 3004910.13
    **
    
    Letter Agreement No. 2 dated as of March 8, 1999 to Aircraft Lease Agreement, dated
November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de
Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 3004910.14
    **
    
    Lease Extension and Amendment Agreement dated as of April 30, 2003, to Aircraft
Lease Agreement, dated November 18, 1998, between Aviation Financial Services Inc.
and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No.
3004910.15
    **
    
    Aircraft Lease Agreement, dated as of November 30, 2003, between International Lease
Finance Corporation and Compañía Panameña de Aviación, S.A., New B737-700 or 800,
Serial No. 3067610.16
    **
    
    Aircraft Lease Agreement, dated as of March 4, 2004, between International Lease
Finance Corporation and Compañía Panameña de Aviación, S.A., New B737-700 or 800,
Serial No. 3280010.17
    **
    
    Aircraft Lease Agreement dated as of December 23, 2004, between Wells Fargo Bank
Northwest, N.A. and Compañía Panameña de Aviación, S.A., in respect of Boeing
B737-800 Aircraft, Serial No. 2967010.18
    **
    
    Embraer 190LR Purchase Agreement DCT-006/2003 dated as of May 2003 between Embraer
Empresa Brasileira de Aeronáutica S.A. and Regional Aircraft Holdings Ltd.10.19
    **
    
    Letter Agreement DCT-007/2003 between EmbraerEmpresa Brasileira de Aeronáutica S.A.
and Regional Aircraft Holdings Ltd., relating to Purchase Agreement DCT-006/200310.20
    **
    
    Letter Agreement DCT-008/2003 between EmbraerEmpresa Brasileira de Aeronáutica S.A.
and Regional Aircraft Holdings Ltd., relating to Purchase Agreement DCT-006/200310.21
    *
    
    Embraer 190 Purchase Agreement COM 0028-06 dated February 2006 between
EmbraerEmpresa Brasileira de Aeronáutica S.A. and Copa Holdings, S.A. relating to
Embraer 190LR aircraft10.22
    *
    
    Letter Agreement COM 0029-06 to the Embraer Agreement dated February 2006 between
EmbraerEmpresa Brasileira de Aeronáutica S.A. and Copa Holdings, S.A. relating to
Embraer 190LR aircraft10.23
    **
    
    Aircraft General Terms Agreement, dated November 25, 1998, between The Boeing
Company and Copa Holdings, S.A.10.24
    **
    
    Purchase Agreement Number 2191, dated November 25, 1998, between The Boeing Company
and Copa Holdings, S.A., Inc. relating to Boeing Model 737-7V3 & 737-8V3 Aircraft10.25
    **
    
    Supplemental Agreement No. 1 dated as of June 29, 2001 to Purchase Agreement Number
2191 between The Boeing Company and Copa Holdings, S.A.
  95




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##### Table of Contents



10.26
    **
    
    Supplemental Agreement No. 2 dated as of December 21, 2001 to Purchase Agreement
Number 2191 between The Boeing Company and Copa Holdings, S.A.10.27
    **
    
    Supplemental Agreement No. 3 dated as of June 14, 2002 to Purchase Agreement Number
2191 between The Boeing Company and Copa Holdings, S.A.10.28
    **
    
    Supplemental Agreement No. 4 dated as of December 20, 2002 to Purchase Agreement
Number 2191 between The Boeing Company and Copa Holdings, S.A.10.29
    **
    
    Supplemental Agreement No. 5 dated as of October 31, 2003 to Purchase Agreement
Number 2191 between The Boeing Company and Copa Holdings, S.A.10.30
    **
    
    Supplemental Agreement No. 6 dated as of September 9, 2004 to Purchase Agreement
Number 2191 between The Boeing Company and Copa Holdings, S.A.10.31
    **
    
    Supplemental Agreement No. 7 dated as of December 9, 2004 to Purchase Agreement
Number 2191 between The Boeing Company and Copa Holdings, S.A.10.32
    **
    
    Supplemental Agreement No. 8 dated as of April 15, 2005 to Purchase Agreement Number
2191 between The Boeing Company and Copa Holdings, S.A.10.33
    *
    
    Supplemental Agreement No. 9 dated as of March 16, 2006 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.10.34
    *
    
    Supplemental Agreement No. 10 dated as of May 8, 2006 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.10.35
    **
    
    Maintenance Cost per Hour Engine Service Agreement, dated March 5, 2003, between
G.E. Engine Services, Inc. and Copa Holdings, S.A.10.36
    **
    
    English translation of Aviation Fuel Supply Agreement, dated July 18, 2005, between
Petróleos Delta, S.A. and Compañía Panameña de Aviación, S.A.10.37
    **
    
    Form of Guaranteed Loan Agreement10.38
    **
    
    Form of Amended and Restated Alliance Agreement between Continental Airlines, Inc.
and Compañía Panameña de Aviación, S.A.10.39
    **
    
    Form of Amended and Restated Services Agreement between Continental Airlines, Inc.
and Compañía Panameña de Aviación, S.A.10.40
    **
    
    Form of Amended and Restated Frequent Flyer Program Participation Agreement10.41
    **
    
    Form of Copa Holdings, S.A. 2005 Stock Incentive Plan10.42
    **
    
    Form of Copa Holdings, S.A. Restricted Stock Award Agreement10.43
    **
    
    Form of Indemnification Agreement with the Registrants directors10.44
    
    
    Supplemental Agreement No. 11 dated as of August 30, 2006 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.10.45
    
    
    Supplemental Agreement No. 12 dated as of February 26, 2007 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.10.46
    
    
    Supplemental Agreement No. 13 dated as of April 23, 2007 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.10.47
    
    
    Supplemental Agreement No. 14 dated as of August 31, 2007 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.10.48
    
    
    Supplemental Agreement No. 15 dated as of February 21, 2008 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.10.49
    
    
    Supplemental Agreement No. 16 dated as of June 30, 2008 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.
  96




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##### Table of Contents



10.50
    
    
    Supplemental Agreement No. 17 dated as of December 15, 2008 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A.10.51
    
    
    Supplemental Agreement No. 18 dated as of July 15, 2009 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A10.52
    
    
    Supplemental Agreement No. 19 dated as of August 31, 2009 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A10.53
    
    
    Supplemental Agreement No. 20 dated as of November 19, 2009 to the Boeing Purchase
Agreement Number 2191 dated November 25, 1998 between the Boeing Company and Copa
Holdings, S.A12.1
    
    
    Certification of the Chief Executive Officer, pursuant to Rules 13a-14 and 15d-14
under the Securities Exchange Act of 1934.12.2
    
    
    Certification of the Chief Financial Officer, pursuant to Rules 13a-14 and 15d-14
under the Securities Exchange Act of 1934.13.1
    
    
    Certification of Chief Executive Officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.13.2
    
    
    Certification of the Chief Financial Officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.21.1
    **
    
    Subsidiaries of the Registrant
 
 *
    
    Previously filed with the SEC as an exhibit and incorporated by reference from
our Registration Statement on Form F-1, filed June 15, 2006, File No.
333-135031.**
    
    Previously filed with the SEC as an exhibit and incorporated by reference from
our Registration Statement on Form F-1, filed November 28, 2005, as amended on
December 1, 2005 and December 13, 2005, File No. 333-129967.
    
    The Registrant was granted confidential treatment for portions of this exhibit.
    
    The Registrant has requested confidential treatment for portions of this exhibit.  97




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SIGNATURES
  COPA HOLDINGS, S.A.By:
    /s/ Pedro HeilbronName:
    Pedro HeilbronTitle:
    Chief Executive Officer   98




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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PagesAudited Consolidated Financial StatementsReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    F-3Consolidated Statements of Income for each of the three years
in the period ended December 31, 2009
    
    
    F-5Consolidated Statements of Shareholders Equity for each of the three years
in the period ended December 31, 2009
    
    
    F-6Consolidated Statements of Cash Flows for each of the three years
in the period ended December 31, 2009
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8
  F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF DIRECTORS AND SHAREHOLDERS
COPA HOLDINGS, S. A. We have audited the accompanying consolidated balance sheets of Copa Holdings, S. A. (the Company) and its
subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of income, shareholders equity,
and cash flows for each of the three years in the period ended December 31, 2009.  Our audits also included the
financial statement schedule included in Item 18. These consolidated financial statements and schedule are the
responsibility of the Companys management.  Our responsibility is to express an opinion on these consolidated
financial statements and schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of the Company and its subsidiaries at December 31, 2009 and 2008, and the consolidated
results of their operations and their cash flows for each of the three years in the period ended December 31, 2009, in
conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related consolidated financial
statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein. As discussed in Note 10, Earnings per Share (Adjusted), in 2009, the Company changed its method of calculating earnings
per share. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the effectiveness of Companys internal control over financial reporting as of December 31, 2009, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission and our report dated March 12, 2010 expressed an unqualified opinion thereon. /s/ Ernst and Young March 16, 2010

Panama City, Republic of Panama  F-2




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEET
 (In US$ thousands, except share and per share data)
 As of December 31,2009
    
    
    2008ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    262,656
    
    
    $
    220,808Short-term investments
    
    
    89,412
    
    
    
    176,018Total cash, cash equivalents and short-term investments
    
    
    352,068
    
    
    
    396,826Accounts receivable, net of allowance for doubtful accounts
of $4,947 and $5,002 as of December 31, 2009 and 2008, respectively
    
    
    76,392
    
    
    
    70,609Accounts receivable from related parties
    
    
    4,399
    
    
    
    4,592Expendable parts and supplies, net of allowance for obsolescence
of $78 and $53 as of December 31, 2009 and 2008, respectively
    
    
    23,327
    
    
    
    18,405Prepaid expenses
    
    
    32,314
    
    
    
    26,694Other current assets
    
    
    13,654
    
    
    
    5,338Total Current Assets
    
    
    502,154
    
    
    
    522,464Investments
    
    
    6,407
    
    
    
    11,145Property and Equipment:Owned property and equipment:Flight equipment
    
    
    1,439,759
    
    
    
    1,372,352Other
    
    
    61,339
    
    
    
    55,2911,501,098
    
    
    
    1,427,643Less: Accumulated depreciation
    
    
    (218,108
    )
    
    
    (174,835
    )1,282,990
    
    
    
    1,252,808Purchase deposits for flight equipment
    
    
    198,697
    
    
    
    84,861Total Property and Equipment
    
    
    1,481,687
    
    
    
    1,337,669Other Assets:Prepaid pension asset
    
    
    2,227
    
    
    
    1,486Goodwill
    
    
    23,852
    
    
    
    21,732Other intangible assets
    
    
    34,973
    
    
    
    31,865Other assets
    
    
    41,569
    
    
    
    27,864Total Other Assets
    
    
    102,621
    
    
    
    82,947Total Assets
    
    $
    2,092,869
    
    
    $
    1,954,225
   F-3




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(In US$ thousands, except share and per share data)
 As of December 31,2009
    
    
    2008LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Current maturities of long-term debt
    
    $
    94,550
    
    
    $
    115,833Accounts payable
    
    
    51,343
    
    
    
    54,066Accounts payable to related parties
    
    
    14,103
    
    
    
    11,510Air traffic liability
    
    
    183,344
    
    
    
    182,490Taxes and interest payable
    
    
    43,227
    
    
    
    37,194Accrued expenses payable
    
    
    49,058
    
    
    
    40,642Other current liabilities
    
    
    10,957
    
    
    
    60,349Total Current Liabilities
    
    
    446,582
    
    
    
    502,084Non-Current Liabilities:Long-term debt
    
    
    750,971
    
    
    
    800,196Post employment benefits liability
    
    
    2,370
    
    
    
    2,072Other long-term liabilities
    
    
    13,908
    
    
    
    8,694Deferred tax liabilities
    
    
    13,410
    
    
    
    8,747Total Non-Current Liabilities
    
    
    780,659
    
    
    
    819,709Total Liabilities
    
    
    1,227,241
    
    
    
    1,321,793Shareholders Equity:Class A common stock - 31,136,619 and 31,031,129 shares issued,
30,566,853 and 30,416,441 outstanding in 2009 and 2008
    
    
    20,864
    
    
    
    20,761Class B common stock - 12,778,125 shares issued
and outstanding, no par value
    
    
    8,722
    
    
    
    8,722Additional paid in capital
    
    
    18,658
    
    
    
    13,481Retained earnings
    
    
    817,649
    
    
    
    594,004Accumulated other comprehensive loss
    
    
    (265
    )
    
    
    (4,536
    )Total Shareholders Equity
    
    
    865,628
    
    
    
    632,432Total Liabilities and Shareholders Equity
    
    $
    2,092,869
    
    
    $
    1,954,225
   F-4




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 (In US$ thousands, except share and per share
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Operating Revenue:Passenger revenue
    
    $
    1,186,717
    
    
    $
    1,217,311
    
    
    $
    967,066Cargo, mail and other
    
    
    66,370
    
    
    
    71,478
    
    
    
    60,1981,253,087
    
    
    
    1,288,789
    
    
    
    1,027,264Operating Expenses:Aircraft fuel
    
    
    300,816
    
    
    
    404,669
    
    
    
    265,387Salaries and benefits
    
    
    157,879
    
    
    
    139,431
    
    
    
    116,691Passenger servicing
    
    
    110,768
    
    
    
    98,775
    
    
    
    82,948Commissions
    
    
    57,565
    
    
    
    67,177
    
    
    
    65,930Maintenance, material and repairs
    
    
    76,732
    
    
    
    66,438
    
    
    
    51,249Reservations and sales
    
    
    56,280
    
    
    
    54,996
    
    
    
    48,229Aircraft rentals
    
    
    46,538
    
    
    
    43,008
    
    
    
    38,636Flight operations
    
    
    60,873
    
    
    
    56,425
    
    
    
    43,958Depreciation
    
    
    47,079
    
    
    
    42,891
    
    
    
    35,328Landing fees and other rentals
    
    
    33,628
    
    
    
    32,467
    
    
    
    27,017Other
    
    
    62,186
    
    
    
    58,521
    
    
    
    55,093Special fleet charges
    
    
    19,417
    
    
    
    
    
    
    
    7,309Gain from involuntary conversion
    
    
    
    
    
    
    
    
    
    
    (8,019
    )1,029,761
    
    
    
    1,064,798
    
    
    
    829,756Operating Income
    
    
    223,326
    
    
    
    223,991
    
    
    
    197,508Non-operating Income (Expense):Interest costs
    
    
    (32,938
    )
    
    
    (42,071
    )
    
    
    (44,332
    )Interest capitalized
    
    
    693
    
    
    
    1,921
    
    
    
    2,570Interest income
    
    
    9,185
    
    
    
    11,130
    
    
    
    12,193Other, net
    
    
    59,703
    
    
    
    (58,843
    )
    
    
    10,98736,643
    
    
    
    (87,863
    )
    
    
    (18,582
    )Income before Income Taxes
    
    
    259,969
    
    
    
    136,128
    
    
    
    178,926Provision for Income Taxes
    
    
    19,610
    
    
    
    17,469
    
    
    
    17,106Net Income
    
    $
    240,359
    
    
    $
    118,659
    
    
    $
    161,820Earnings per share, as adjusted:Basic
    
    $
    5.47
    
    
    $
    2.71
    
    
    $
    3.70Diluted
    
    $
    5.47
    
    
    $
    2.71
    
    
    $
    3.70Denominator for basic and diluted earnings per share, as adjusted
    
    
    43,910,929
    
    
    
    43,822,879
    
    
    
    43,782,386
   F-5




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 (In US$ thousands, except share and per share data)
 AccumulatedCommon Stock
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    Other(Non-par value)
    
    
    Issued Capital
    
    
    Paid in
    
    
    Retained
    
    
    ComprehensiveClass A
    
    
    Class B
    
    
    Class A
    
    
    Class B
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    TotalAt December 31, 2006
    
    
    30,034,375
    
    
    
    12,778,125
    
    
    
    20,501
    
    
    
    8,722
    
    
    
    3,340
    
    
    
    343,390
    
    
    
    (4,284
    )
    
    
    371,669Issuance of stock
    
    
    125,344
    
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    (85
    )Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    161,820
    
    
    
    
    
    
    
    161,820Other comprehensive income (loss):Net change in fair value of
derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,998
    
    
    
    3,998Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,954
    
    
    
    2,954Actuarial loss, net of amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    168,770Restricted stock plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,809
    
    
    
    
    
    
    
    
    
    
    
    4,809Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50
    )
    
    
    
    
    
    
    (50
    )Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,561
    )
    
    
    
    
    
    
    (13,561
    )At December 31, 2007
    
    
    30,159,719
    
    
    
    12,778,125
    
    
    
    20,586
    
    
    
    8,722
    
    
    
    8,064
    
    
    
    491,599
    
    
    
    2,666
    
    
    
    693,457Issuance of stock
    
    
    256,722
    
    
    
    
    
    
    
    175
    
    
    
    
    
    
    
    (175
    )Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118,659
    
    
    
    
    
    
    
    118,659Other comprehensive income (loss):Net change in fair value of
derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,713
    )
    
    
    (6,713
    )Exchange effect on
intercompany long term
balance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,155
    
    
    
    2,155Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,503
    )
    
    
    (2,503
    )Actuarial loss, net of amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (141
    )
    
    
    (141
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111,456Restricted stock plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,592
    
    
    
    
    
    
    
    
    
    
    
    5,592Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47
    )
    
    
    
    
    
    
    (47
    )Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,207
    )
    
    
    
    
    
    
    (16,207
    )At December 31, 2008
    
    
    30,416,441
    
    
    
    12,778,125
    
    
    $
    20,761
    
    
    $
    8,722
    
    
    $
    13,481
    
    
    $
    594,004
    
    
    $
    (4,536
    )
    
    $
    632,432Issuance of stock
    
    
    150,412
    
    
    
    
    
    
    
    103
    
    
    
    
    
    
    
    (103
    )Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    240,359
    
    
    
    
    
    
    
    240,359Other comprehensive income (loss):Net change in fair value of
derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,509
    
    
    
    1,509Exchange effect on
intercompany long term
balance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,486
    )
    
    
    (1,486
    )Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,248
    
    
    
    4,248Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    244,630Restricted stock plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,280
    
    
    
    
    
    
    
    
    
    
    
    5,280Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (459
    )
    
    
    
    
    
    
    (459
    )Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,255
    )
    
    
    
    
    
    
    (16,255
    )At December 31, 2009
    
    
    30,566,853
    
    
    
    12,778,125
    
    
    $
    20,864
    
    
    $
    8,722
    
    
    $
    18,658
    
    
    $
    817,649
    
    
    $
    (265
    )
    
    $
    865,628
   F-6




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In US$ thousands)
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Cash flows from operating activitiesNet income
    
    $
    240,359
    
    
    $
    118,659
    
    
    $
    161,820Adjustments for:Deferred income taxes
    
    
    3,816
    
    
    
    4,649
    
    
    
    2,352Depreciation
    
    
    47,079
    
    
    
    42,891
    
    
    
    35,328Gain on sale of property, equipment and involuntary conversion
    
    
    
    
    
    
    
    
    
    
    (9,579
    )Special fleet charges
    
    
    8,923
    
    
    
    199
    
    
    
    6,300Provision for doubtful accounts
    
    
    55
    
    
    
    3,230
    
    
    
    4,276Provision for obsolescence of expendable parts and supplies
    
    
    27
    
    
    
    21
    
    
    
    12Derivative instruments mark to market
    
    
    (59,010
    )
    
    
    53,290
    
    
    
    (6,291
    )Stock compensation
    
    
    5,278
    
    
    
    5,593
    
    
    
    4,809Changes in:Accounts receivable
    
    
    (4,280
    )
    
    
    (4,459
    )
    
    
    (14,805
    )Accounts receivable from related parties
    
    
    524
    
    
    
    (3,177
    )
    
    
    1,256Other current assets
    
    
    (12,781
    )
    
    
    (6,346
    )
    
    
    (14,149
    )Restricted cash
    
    
    40,934
    
    
    
    (39,803
    )
    
    
    (1
    )Other assets
    
    
    (11,831
    )
    
    
    974
    
    
    
    (7,835
    )Accounts payable
    
    
    (3,669
    )
    
    
    (2,074
    )
    
    
    7,611Accounts payable to related parties
    
    
    7,444
    
    
    
    1,681
    
    
    
    1,671Air traffic liability
    
    
    (246
    )
    
    
    32,090
    
    
    
    35,215Other liabilities
    
    
    19,814
    
    
    
    (9,313
    )
    
    
    13,951Net cash provided by operating activities
    
    
    282,436
    
    
    
    198,105
    
    
    
    221,941Cash flows from investing activitiesAcquisition of investments
    
    
    (217,905
    )
    
    
    (240,407
    )
    
    
    (500
    )Proceeds from redemption of investments
    
    
    268,314
    
    
    
    132,586
    
    
    
    17,495Advance payments on aircraft purchase contracts
    
    
    (151,676
    )
    
    
    (53,434
    )
    
    
    (62,128
    )Acquisition of property and equipment
    
    
    (50,994
    )
    
    
    (162,479
    )
    
    
    (304,013
    )Disposal of property and equipment
    
    
    810
    
    
    
    954
    
    
    
    2,354Insurance proceeds on involuntary conversion
    
    
    
    
    
    
    
    
    
    
    12,034Net cash flows used in investing activities
    
    
    (151,451
    )
    
    
    (322,780
    )
    
    
    (334,758
    )Cash flows from financing activitiesProceeds from loans and borrowings
    
    
    103,780
    
    
    
    160,197
    
    
    
    329,147Payments on loans and borrowings
    
    
    (175,374
    )
    
    
    (84,471
    )
    
    
    (87,291
    )Dividends declared and paid
    
    
    (16,255
    )
    
    
    (16,207
    )
    
    
    (13,561
    )Net cash flows (used) provided by financing activities
    
    
    (87,849
    )
    
    
    59,519
    
    
    
    228,295Effect of exchange rate change on cash
    
    
    (1,288
    )
    
    
    106
    
    
    
    500Net increase (decrease) in cash and cash equivalents
    
    
    41,848
    
    
    
    (65,050
    )
    
    
    115,978Cash and cash equivalents at January 1st
    
    
    220,808
    
    
    
    285,858
    
    
    
    169,880Cash and cash equivalents at December 31
    
    $
    262,656
    
    
    $
    220,808
    
    
    $
    285,858Supplemental disclosure of cash flow informationInterest paid, net of amount capitalized
    
    $
    34,170
    
    
    $
    40,383
    
    
    $
    40,108Income taxes paid
    
    
    13,843
    
    
    
    14,906
    
    
    
    16,553Investing and financing activities not affecting cash:Settlement of debt through insurance proceed on involuntary conversion
    
    
    
    
    
    
    
    
    
    
    22,820
   F-7




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Corporate Information
         F-8




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies
 Basis of Presentation
  Principles of Consolidation
  Use of Estimates
  Cash and Cash Equivalents
  Investments
   F-9




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Expendable Parts and Supplies
  Property and Equipment
  YearsJet aircraft
    
    
    30Jet engines
    
    
    30Ground property and equipment
    
    
    5 to 10Furniture, fixture, equipment and others
    
    
    5 to 10Software rights and licenses
    
    
    3 to 8Aircraft rotables
    
    
    10 to 30Leasehold improvements
    
    Lesser of remaining lease term or useful life
 Measurement of Impairment of Long-Lived Assets
  Revenue Recognition
 Passenger Revenue
   F-10




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Cargo and Mail Services Revenue
  Other Revenue
  Frequent Flyer Program
  Passenger Traffic Commissions
  Foreign Currency Transactions and Translation
   F-11




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Derivative Instruments and Hedging Activities
       F-12




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Maintenance and Repair Costs
   Employee Profit Sharing
   F-13




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Advertising Costs
  Income Taxes
  Goodwill and Intangibles
   Gain from Involuntary Conversion
  Concentration Risk
   F-14




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Earnings per Share
  2. Adopted and Recently Issued Accounting Pronouncements
     F-15




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    3. Special Fleet Charges
     F-16




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 4. Long-Term Debt
  2009
    
    
    2008Long-term fixed rate debt
    
    $
    347.2
    
    
    $
    363.8(Secured fixed rate indebtedness due through 2019
Effective rates ranged from 3.95% to 6.75%)Long-term variable rate debt
    
    
    498.3
    
    
    
    504.4(Secured variable rate indebtedness due through 2019
Effective rates ranged from 1.00% to 2.80%)Medium-term variable rate debt
    
    
    
    
    
    
    47.8(Unsecured variable rate indebtedness due in 2009
Effective rates ranged of 2.52% to 4.89%)Sub-total
    
    
    845.5
    
    
    
    916.0Less current maturities
    
    
    94.5
    
    
    
    115.8Long-term debt less current maturities
    
    $
    751.0
    
    
    $
    800.2
  Year ending December 31,2010
    
    $
    94.52011
    
    
    76.02012
    
    
    95.02013
    
    
    63.72014
    
    
    97.3Thereafter
    
    $
    419.0
      F-17




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   5. Investments
    F-18




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 6. Leases
   Operating LeasesAircraft
    
    
    Non-AircraftYear ending December 31,2010
    
    $
    46.8
    
    
    $
    9.72011
    
    
    46.0
    
    
    
    7.42012
    
    
    33.5
    
    
    
    6.12013
    
    
    26.6
    
    
    
    5.32014
    
    
    26.6
    
    
    
    4.1Later years
    
    
    47.5
    
    
    
    3.3Total minimum lease payments
    
    $
    227.0
    
    
    $
    35.9
   F-19




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 7. Financial Instruments and Risk Management
 Fuel Price Risk Management
 Derivatives and Hedging
    Foreign Currency Exchange Risk Management.
     F-20




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Interest Rates Risk Management
  Debt
  Other Financial Instruments
  8. Fair Value Measurement
   F-21




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         F-22




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Fair Value Measurements at Reporting Date UsingQuoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableDecember 31,
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsCurrency derivatives
    
    $
    0.5
    
    
    
    
    
    
    $
    0.5Fuel derivatives
    
    
    10.0
    
    
    
    
    
    
    
    10.0Total assets
    
    
    10.5
    
    
    
    
    
    
    
    10.5LiabilitiesInterest rate hedges
    
    
    5.2
    
    
    
    
    
    
    
    5.2Total liabilities
    
    $
    5.2
    
    
    
    
    
    
    $
    5.2
  
    
    Market approach: Uses prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities.
    
    Income approach: Uses valuation techniques to convert future amounts to a single
present amount based on current market expectations about those future amounts, including
present value techniques, option-pricing models and excess earnings method.
    
    Cost approach: Based on the amount that currently would be required to replace the
service capacity of an asset (replacement cost)
 9. Cash and Stock Based Compensation Plans
    F-23




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Non-vested Stock
         F-24




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2009
    
    
    2008Weighted-Average
    
    
    
    
    
    
    Weighted-AverageGrant-Date
    
    
    
    
    
    
    Grant-DateShares
    
    
    Fair Value
    
    
    Shares
    
    
    Fair ValueNon-vested at beginning
of year
    
    
    614,688
    
    
    $
    23.60
    
    
    
    806,711
    
    
    $
    21.77Granted
    
    
    113,714
    
    
    
    22.05
    
    
    
    76,689
    
    
    
    37.97Vested
    
    
    (150,412
    )
    
    
    24.79
    
    
    
    (256,722
    )
    
    
    22.11Forfeited
    
    
    (8,224
    )
    
    
    24.83
    
    
    
    (11,990
    )
    
    
    24.49Non-vested at end of year
    
    
    569,766
    
    
    $
    22.96
    
    
    
    614,688
    
    
    $
    23.60
    F-25




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Stock Options
    SharesOutstanding at January 1, 2009
    
    
    33,629Granted
    
    
    0Exercised
    
    
    0Forfeited or expired
    
    
    0Outstanding at December 31, 2009
    
    
    33,629
   F-26




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 10. Earnings Per Share (Adjusted)
   December 31,2009
    
    
    2008
    
    
    2007Numerator for earnings per share:Net Income
    
    $
    240,359
    
    
    $
    118,659
    
    
    $
    161,820Denominator for basic and diluted earnings per share, as adjustedWeighted average common shares outstanding
    
    
    43,308
    
    
    
    43,143
    
    
    
    42,908Non-vested shares deemed participating securities
    
    
    603
    
    
    
    680
    
    
    
    874Total shares for basic and diluted earnings per share
    
    
    43,911
    
    
    
    43,823
    
    
    
    43,782Earnings per share, as adjustedBasic
    
    $
    5.47
    
    
    $
    2.71
    
    
    $
    3.70Diluted
    
    $
    5.47
    
    
    $
    2.71
    
    
    $
    3.70Earnings per share, as previously reportedBasic
    
    
    
    
    
    $
    2.75
    
    
    $
    3.77Diluted
    
    
    
    
    
    $
    2.73
    
    
    $
    3.72Weighted average shares outstanding, as reportedBasic
    
    
    
    
    
    
    43,143
    
    
    
    42,908Diluted
    
    
    
    
    
    
    43,440
    
    
    
    43,464
   F-27




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 11. Accumulated other comprehensive loss
  Foreign
    
    
    
    
    
    
    DerivativesCurrency
    
    
    
    
    
    
    FinancialTranslation
    
    
    Pensions
    
    
    Instruments
    
    
    TotalBalance as of December 31, 2007
    
    $
    3.6
    
    
    $
    (0.9
    )
    
    $
    0.0
    
    
    $
    2.7Foreign currency translation
    
    
    (0.3
    )
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Unrealized gain (loss) on derivatives instruments
    
    
    
    
    
    
    
    
    
    
    (6.8
    )
    
    
    (6.8
    )SFAS 158 Unrecognized actuarial loss of the period
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )Amortization of actuarial loss
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1Balance as of December 31, 2008
    
    $
    3.3
    
    
    $
    (1.0
    )
    
    $
    (6.8
    )
    
    $
    (4.5
    )Foreign currency translation
    
    
    2.7
    
    
    
    
    
    
    
    
    
    
    
    2.7Unrealized gain (loss) on derivatives instruments
    
    
    
    
    
    
    
    
    
    
    1.5
    
    
    
    1.5Balance as of December 31, 2009
    
    $
    6.0
    
    
    $
    (1.0
    )
    
    $
    (5.3
    )
    
    $
    (0.3
    )
 12. Issued Capital and Corporate Reorganization
   F-28




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    13. Income Taxes
    F-29




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    2009
    
    
    2008
    
    
    2007PanamaCurrent
    
    $
    1.7
    
    
    $
    1.7
    
    
    $
    1.3Deferred
    
    
    
    
    
    
    
    
    
    
    ForeignCurrent
    
    
    14.1
    
    
    
    11.2
    
    
    
    13.4Deferred
    
    
    3.8
    
    
    
    4.6
    
    
    
    2.4Total
    
    
    19.6
    
    
    
    17.5
    
    
    
    17.1
       F-30




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Amount
    
    
    Percentage2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Provision for income taxes at
Panamanian statutory rates
    
    $
    78.0
    
    
    $
    40.8
    
    
    $
    53.7
    
    
    
    30.0
    %
    
    
    30.0
    %
    
    
    30.0
    %Panamanian gross tax election
    
    
    (14.6
    )
    
    
    (13.5
    )
    
    
    (13.6
    )
    
    
    (5.6
    %)
    
    
    (9.9
    %)
    
    
    (7.6
    %)Exemption in non-taxable countries
    
    
    (4.0
    )
    
    
    (2.2
    )
    
    
    (2.4
    )
    
    
    (1.6
    %)
    
    
    (1.7
    %)
    
    
    (1.3
    %)Difference in Panamanian
statutory rates and
non-Panamanian statutory rates
    
    
    (39.8
    )
    
    
    (7.6
    )
    
    
    (20.6
    )
    
    
    (15.3
    %)
    
    
    (5.6
    %)
    
    
    (11.5
    %)Provision for income taxes
    
    $
    19.6
    
    
    $
    17.5
    
    
    $
    17.1
    
    
    
    7.5
    %
    
    
    12.8
    %
    
    
    9.6
    %
   F-31




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2009
    
    
    2008Deferred tax liabilities:Intangible Assets
    
    $
    (11.5
    )
    
    $
    (10.5
    )Maintenance reserves
    
    
    (2.3
    )
    
    
    (2.2
    )Others
    
    
    (0.1
    )
    
    
    (0.5
    )(13.9
    )
    
    
    (13.2
    )Deferred tax assets:Property and Equipment
    
    
    0.0
    
    
    
    3.5Allowance for doubtful accounts
    
    
    0.0
    
    
    
    0.1Expendable parts and supplies
    
    
    0.0
    
    
    
    0.4Others
    
    
    2.3
    
    
    
    2.02.3
    
    
    
    6.0Net deferred tax liabilities
    
    
    (11.6
    )
    
    
    (7.2
    )Less: Current deferred tax assets
    
    
    1.8
    
    
    
    1.5Non current deferred tax liabilities
    
    $
    (13.4
    )
    
    $
    (8.7
    )
  14. Related Party Transactions
  Continental Airlines.
  F-32




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Banco General, S. A. (Banco General
   ASSA Compañía de Seguros, S. A. (ASSA
 Petróleos Delta, S. A. (Delta Petroleum
 Desarrollo Inmobiliario del Este, S. A. (Desarrollo Inmobiliario
 Galindo, Arias & Lopez.
  F-33




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Other Transactions.
    15. Commitments and Contingencies
   Covenants
    F-34




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Labor Unions
    Lines of Credit for Working Capital and Letters of Credit
    Litigation
 Adicional das
Tarifas Aeroportuárias
  F-35




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 16. Subsequent Events
 Stock Grants
  Currency devaluation
    Tax Reform
   F-36




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2009Net income, as reported
    
    $
    240.4Losses related to the Venezuelan Bolivar devaluation
    
    
    (21
    )Net Income, pro forma
    
    $
    219.4Basic earnings per share:As reported
    
    $
    5.47Pro forma
    
    $
    5.00Diluted earnings per share:As reported
    
    $
    5.47Pro forma
    
    $
    5.00
 17. Segment Reporting
   F-37




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2009
    
    
    2008
    
    
    2007Operating Revenues:Copa Segment
    
    $
    1,024.5
    
    
    $
    1,035.9
    
    
    $
    806.2AeroRepública segment
    
    
    240.3
    
    
    
    264.9
    
    
    
    226.0Elimnations
    
    
    (11.7
    )
    
    
    (12.1
    )
    
    
    (4.9
    )Consolidated
    
    $
    1,253.1
    
    
    $
    1,288.8
    
    
    $
    1,027.3Depreciation:Copa Segment
    
    $
    43.2
    
    
    $
    38.1
    
    
    $
    30.7AeroRepública segment
    
    
    3.9
    
    
    
    4.8
    
    
    
    4.6Consolidated
    
    $
    47.1
    
    
    $
    42.9
    
    
    $
    35.3Aircraft Rentals:Copa Segment
    
    $
    26.0
    
    
    $
    31.3
    
    
    $
    27.8AeroRepública segment
    
    
    25.7
    
    
    
    22.7
    
    
    
    14.8Elimnations
    
    
    (5.2
    )
    
    
    (11.0
    )
    
    
    (4.0
    )Consolidated
    
    $
    46.5
    
    
    $
    43.0
    
    
    $
    38.6Operating income:Copa Segment
    
    $
    214.3
    
    
    $
    208.2
    
    
    $
    171.7AeroRepública segment
    
    
    7.6
    
    
    
    15.8
    
    
    
    25.8Adjustments
    
    
    1.4Consolidated
    
    $
    223.3
    
    
    $
    224.0
    
    
    $
    197.5Interest expense:Copa Segment
    
    $
    (29.4
    )
    
    $
    (34.3
    )
    
    $
    (33.8
    )AeroRepública segment
    
    
    (2.8
    )
    
    
    (5.9
    )
    
    
    (8.0
    )Consolidated
    
    $
    (32.2
    )
    
    $
    (40.2
    )
    
    $
    (41.8
    )Interest income:Copa Segment
    
    $
    8.1
    
    
    $
    10.5
    
    
    $
    11.7AeroRepública segment
    
    
    1.1
    
    
    
    0.6
    
    
    
    0.5Consolidated
    
    $
    9.2
    
    
    $
    11.1
    
    
    $
    12.2Income (loss) before income taxes:Copa Segment
    
    $
    254.8
    
    
    $
    130.9
    
    
    $
    165.6AeroRepública segment
    
    
    5.2
    
    
    
    5.3
    
    
    
    13.3Consolidated
    
    $
    260.0
    
    
    $
    136.1
    
    
    $
    178.9Total Assets at End of Period:Copa Segment
    
    $
    1,919.0
    
    
    $
    1,823.5
    
    
    $
    1,546.6AeroRepública segment
    
    
    318.9
    
    
    
    258.6
    
    
    
    256.3Elimnations
    
    
    (146.5
    )
    
    
    (127.8
    )
    
    
    (95.6
    )Consolidated
    
    $
    2,091.4
    
    
    $
    1,954.2
    
    
    $
    1,707.3Capital Expenditures:Copa Segment
    
    $
    200.5
    
    
    $
    212.7
    
    
    $
    250.5AeroRepública segment
    
    
    55.0
    
    
    
    3.2
    
    
    
    115.6Consolidated
    
    $
    255.5
    
    
    $
    215.9
    
    
    $
    366.1
  F-38




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##### Table of Contents



COPA HOLDINGS, S. A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2009
    
    
    2008
    
    
    2007North America
    
    $
    180.7
    
    
    $
    186.1
    
    
    $
    152.1Central America and Caribbean
    
    
    179.7
    
    
    
    192.4
    
    
    
    162.3South America
    
    
    717.0
    
    
    
    710.3
    
    
    
    573.6Panama
    
    
    175.7
    
    
    
    200.0
    
    
    
    139.3Total operating revenue
    
    $
    1,253.1
    
    
    $
    1,288.8
    
    
    $
    1,027.3
   F-39




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##### Table of Contents



Schedule II  Valuation and Qualifying Accounts
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged To
    
    
    from
    
    
    Balance atDescription
    
    Year
    
    
    Expense
    
    
    Reserves
    
    
    End of Year(in thousands)2009Allowance for Doubtful Accounts
    
    $
    5,002
    
    
    $
    2,017
    
    
    $
    (2,073
    )
    
    $
    4,947Allowance for Obsolescence of Expendable Parts and Supplies
    
    
    53
    
    
    
    25
    
    
    
    0
    
    
    
    782008Allowance for Doubtful Accounts
    
    $
    8,157
    
    
    $
    3,401
    
    
    $
    (6,556
    )
    
    $
    5,002Allowance for Obsolescence of Expendable Parts and Supplies
    
    
    35
    
    
    
    18
    
    
    
    0
    
    
    
    532007Allowance for Doubtful Accounts
    
    $
    7,305
    
    
    $
    4,276
    
    
    $
    (3,424
    )
    
    $
    8,157Allowance for Obsolescence of Expendable Parts and Supplies
    
    
    21
    
    
    
    14
    
    
    
    0
    
    
    
    352006Allowance for Doubtful Accounts
    
    $
    4,911
    
    
    $
    3,764
    
    
    $
    (1,370
    )
    
    $
    7,305Allowance for Obsolescence of Expendable Parts and Supplies
    
    
    9
    
    
    
    12
    
    
    
    0
    
    
    
    21