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                                                                   EXHIBIT 10.40



                                FORM OF DIRECTOR
                               INDEMNITY AGREEMENT

            This agreement is between Copa Holdings, S.A., a Panamanian
corporation (sociedad anonima) (the "Company") and , Director of the Company
(the "Indemnitee").

            A. Indemnitee is Director of the Company.

            B. Both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in today's environment.

            C. The Pacto Social of the Company (the "Pacto Social") require the
Company to indemnify to its directors and officers to the fullest extent
permitted by law and the Indemnitee has been serving and continues to serve as
Director of the Company in part in reliance on such provisions.

            D. In recognition of Indemnitee's need for substantial protection
against any potential personal liability in order to assure Indemnitee's
continued service to the Company in an effective manner and Indemnitee's
reliance on the provisions of the Pacto Social and in part to provide Indemnitee
with specific contractual assurance that the protection promised by the Pacto
Social will be available to Indemnitee (regardless of, among other things, any
amendment to or revocation of any provision of the Company's Pacto Social or any
change in the composition of the Company's Board of Directors or any acquisition
of the Company), the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by law and as set forth in this
Agreement, and for the continued coverage of the Indemnitee under the Company's
directors' and officers' liability insurance policies.

            The parties hereto agree as follows:

            1. Certain Definitions.

            (a) "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 20% or more of
the total voting power represented by the Company's then outstanding voting
securities, or (ii) during any period of 24 consecutive months, individuals who
at the beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to
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constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation or entity,
other than a merger or consolidation that would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least 80% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company, in one transaction or a series of
transactions, of all or substantially all the Company's assets.

            (b) "Proceeding" shall mean any completed, actual, pending or
threatened action, suit, claim, inquiry or proceeding, whether civil, criminal,
administrative or investigative (including an action by or in the right of the
Company) and whether formal or informal.

            (c) "Expenses" means all direct and indirect costs of any type or
nature whatsoever (including, without limitation, all attorneys' fees and
related disbursements and other out-of- pocket costs) actually and reasonably
incurred by the Indemnitee in connection with the investigation, defense or
appeal of or being a witness in, participating in or preparing to defend a
Proceeding or establishing or enforcing a right to (i) indemnification or
advancement of expenses under this Agreement, the Pacto Social, Panamanian law
or otherwise or (ii) directors' and officers' liability insurance coverage;
provided, however, that Expenses shall not include any judgments, fines or
penalties or amounts paid in settlement of a Proceeding.

            (d) "Indemnifiable Event" is any event or occurrence related to the
fact that Indemnitee is or was a director or officer of the Company, or is or
was serving at the request of the Company as a director, officer, employee,
trustee or agent of another corporation, partnership, joint venture, trust,
nonprofit entity or other entity (including service with respect to employee
benefit plans), or by reason of anything done or not done by Indemnitee in any
such capacity.

            (e) "Indemnification Period" shall be such period as the Indemnitee
shall continue to serve as a director or officer of the Company, or shall
continue at the request of the Company to serve as a director, officer,
employee, trustee or agent of another corporation, partnership, joint venture,
trust, nonprofit entity or other entity, and thereafter so long as the
Indemnitee shall be subject to any possible Proceeding arising out of the
Indemnitee's tenure in the foregoing positions.

            (f) "Losses" are any judgments, fines, penalties and amounts paid in
settlement (including all interest assessments and other charges paid or payable
in connection with or in respect of such judgments, fines, penalties or amounts
paid in settlement) of any Proceeding.

            (g) "Reviewing Party" shall mean (i) the Board of Directors
(provided that a majority of directors are not parties to the Proceeding), (ii)
a person or body selected by the Board of Directors or (iii) if there has been a
Change in Control, the special independent counsel referred to in Section 5.
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            2. Indemnification and Advancement of Expenses. Subject to the
limitations set forth in Section 4:

            (a) Indemnification. The Company shall indemnify and hold harmless
Indemnitee, to the fullest extent permitted by applicable law, as soon as
practicable after written demand is presented to the Company, in the event
Indemnitee was or is made or is threatened to be made a party to or witness in
or is otherwise involved in a Proceeding by reason, in whole or in part, of an
Indemnifiable Event against all Expenses and Losses incurred by Indemnitee in
connection with such Proceeding. In the event of any change, after the date of
this Agreement, in any applicable law, statute or rule regarding the right of a
Panamanian corporation to indemnify a member of its Board of Directors or an
officer, such change, to the extent it would expand Indemnitee's rights under
this Agreement, shall be included within Indemnitee's rights and the Company's
obligations under this Agreement, and, to the extent it would narrow
Indemnitee's rights or the Company's obligations under this Agreement, shall be
excluded from this Agreement.

            (b) Advancement of Expenses. The Company shall to the fullest extent
permitted by applicable law pay the Expenses incurred by Indemnitee as soon as
practicable after written demand is presented to the Company in the event
Indemnitee was or is made or is threatened to be made a party to or witness in
or is otherwise involved in a Proceeding by reason, in whole or in part, of an
Indemnifiable Event in advance of its final disposition; provided, however,
that, to the extent required by law, such payment of expenses in advance of the
final disposition of the Proceeding shall be made only upon receipt of an
undertaking by the Indemnitee to repay all amounts advanced if it should be
ultimately determined that the Indemnitee is not entitled to be indemnified
under this Agreement, Panamanian law or otherwise.

            (c) Partial Indemnity. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Losses or Expenses, but not, however, for all of the total amount thereof, the
Company shall indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in defense
of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.

            (d) Contribution. If the indemnification provided in Section 2(a)
for any reason is unavailable to the Indemnitees, then in respect of any
Indemnifiable Event, the Company shall contribute to the amount of Expenses and
Losses paid in settlement actually incurred and paid or payable by the
Indemnitee in such proportion as is appropriate to reflect (i) the relative
benefits received by the Company on the one hand and the Indemnitee on the other
hand from the transaction from which such proceeding arose and (ii) the relative
fault of the Company on the one hand and of the Indemnitee on the other hand in
connection with the events which resulted in such Expenses and Losses, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Indemnitee on the other hand shall be
determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances
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resulting in such expenses, judgments, fines or settlement amounts. The Company
agrees that it would not be just and equitable if contribution pursuant to this
Section 2(d) were determined by pro rata allocation or any other method of
allocation which does not take account of the foregoing equitable
considerations.

            (e) Enforcement. If a claim for indemnification (following the final
disposition of such Proceeding) under Section 2(a) or advancement of Expenses
under Section 2(b) is not paid in full within thirty days after a written claim
therefor by the Indemnitee has been presented to the Company, the Indemnitee may
file suit against the Company to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In addition, Indemnitee may file suit against the
Company to establish a right to indemnification or advancement of Expenses
arising under this Agreement, the Pacto Social, Panamanian law or otherwise. In
any such action the Company shall have the burden of proving by clear and
convincing evidence that the Indemnitee is not entitled to the requested
indemnification or advancement of Expenses under applicable law.

            3. Notification and Defense of Proceeding. Promptly after receipt by
Indemnitee of notice of the commencement of or threat of the commencement of any
Proceeding, Indemnitee shall, if a request for indemnification in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof; but the failure to notify the Company will
not relieve the Company from any liability which it may have to Indemnitee under
this Agreement or otherwise unless and only to the extent that such omission can
be shown to have prejudiced the Company's ability to defend the Proceeding.
Except as otherwise provided below, the Company shall be entitled to assume the
defense of such Proceeding, with counsel approved by Indemnitee (which approval
shall not be unreasonably withheld). After notice from the Company to Indemnitee
of its election to assume the defense thereof, the Company will not be liable to
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below. Indemnitee
shall have the right to employ its counsel in such Proceeding, but the fees and
expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of Indemnitee unless
(i) the employment of counsel by Indemnitee has been authorized by the Company,
(ii) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee in the conduct of the defense of
such Proceeding or (iii) the Company shall not in fact have employed counsel to
assume the defense of such Proceeding, in each of which cases the fees and
expenses of counsel shall be at the expense of the Company. The Company shall
not be entitled to assume the defense of any Proceeding brought by or on behalf
of the Company or as to which the Indemnitee shall have made the conclusion
provided for in clause (ii) of this Section 3. The Company shall not settle any
Proceeding in any manner, which would impose any penalty, limitation, admission,
loss or Expense on the Indemnitee without the Indemnitee's prior written
consent. Neither the Company nor the Indemnitee will unreasonably withhold its
consent to any proposed settlement, provided that Indemnitee may, in
Indemnitee's sole discretion, withhold consent to any proposed settlement that
would impose any penalty, limitation, admission, loss or Expense on the
Indemnitee.

            4. Limitation on Indemnification. Notwithstanding the terms of
Section 2:
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            (a) the obligations of the Company set forth in Section 2 shall be
subject to the presumption that Indemnitee is entitled indemnification here
under unless the Reviewing Party shall have determined (based on a written
opinion of independent outside counsel in all cases) that Indemnitee would not
be permitted to be so indemnified under applicable law; provided, however, that
if Indemnitee has commenced or thereafter commences legal proceedings in a court
of competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any advancement of Expenses until a final judicial determination is
made with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed) and the Company shall not be obligated to indemnify or
advance to Indemnitee any additional amounts covered by such Reviewing Party
determination (unless there has been a determination by a court of competent
jurisdiction that the Indemnitee would be permitted to be so indemnified under
applicable law);

            (b) the Company shall not be required to indemnify or advance
Expenses to the Indemnitee with respect to a Proceeding (or part thereof) by the
Indemnitee (and not by way of defense), except if the commencement of such
Proceeding (i) is expressly required to be made by applicable law, and (ii) was
authorized in the specific case by the Board of Directors or (ii) brought to
establish or enforce a right to indemnification and/or advancement of Expenses
arising under this Agreement, the Pacto Social, Panamanian law or otherwise;

            (c) the Company shall not be obligated pursuant to the terms of this
Agreement to indemnify the Indemnitee for any amounts paid in settlement of a
Proceeding unless the Company consents in advance in writing to such settlement,
which consent shall not be unreasonably withheld;

            (d) the Company shall not be obligated pursuant to the terms of this
Agreement to indemnify the Indemnitee on account of any suit in which judgment
is rendered against the Indemnitee for an accounting of profits made from the
purchase or sale by the Indemnitee of securities of the Company pursuant to the
provisions of Section l6(b) of the Securities Exchange Act of 1934, as amended
or similar provisions of any federal, state or local statutory law;

            (e) the Company shall not be obligated pursuant to the terms of this
Agreement to indemnify the Indemnitee if a final decision by a court having
jurisdiction in the matter shall determine that such indemnification is not
lawful; and

            (f) the Company shall not be obligated pursuant to the terms of this
Agreement to make any payment in connection with any Proceeding to the extent
Indemnitee has otherwise actually received payment (under any insurance policy
or otherwise) of the amounts otherwise indemnifiable under this Agreement.

            (g) the Company shall not be obligated pursuant to the terms of this
Agreement to indemnify the Indemnitee if a final decision by a Court having
jurisdiction in the matter shall determine that the actions that give rise to
the Indemnification Event are proven to be the result of Indemnitee's willful
misconduct or gross negligence.
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            5. Change in Control of Company. The Company agrees that if there is
a Change in Control of the Company, then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnity payments and Expense
advances under this Agreement, any other agreements, the Pacto Social now or
hereafter in effect relating to Proceedings for Indemnifiable Events, the
Company shall seek legal advice only from special independent counsel selected
by Indemnitee and approved by the Company's Board of Directors (which approval
shall not be unreasonably withheld), and who has not otherwise performed
services for the Company (other than in connection with such matters) or
Indemnitee. Such special independent counsel, among other things, shall
determine whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law and shall render its written opinion to the
Company and Indemnitee to such effect. The Company agrees to pay the reasonable
fees of the special independent counsel referred to above and to fully indemnify
such counsel against any and all expenses (including attorneys' fees),
Proceedings, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant to this Agreement.

            6. Subrogation. In the event of payment to Indemnitee under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all papers required
and shall do everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.

            7. No Presumptions. For purposes of this Agreement, the termination
of any Proceeding against Indemnitee by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief shall be a defense to Indemnitee's Proceeding for
indemnification or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief shall be a
defense to Indemnitee's Proceeding for indemnification or create a presumption
that Indemnitee has not a met any particular standard of conduct or did not have
a particular belief.

            8. Non-Exclusivity. The rights conferred on the Indemnitee by this
Agreement shall not be exclusive of any other rights which the Indemnitee may
have or hereafter acquire under any statute, provision of the Pacto Social,
agreement, vote of stockholders or disinterested directors or otherwise, and to
the extent that during the Indemnification Period such rights are more favorable
than the rights currently provided under this Agreement to Indemnitee,
Indemnitee shall be entitled to the full benefits of such more favorable rights
to the extent permitted by law. Other than as set forth in this Section 8, in
the case of any inconsistency between the indemnification provisions of this
Agreement and any other agreement relating to the indemnification of an
Indemnitee, the indemnification provisions of this Agreement shall control.
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            9. Liability Insurance. The Company may, to the extent that the
Board of Directors in good faith determines it to be economically reasonable,
maintain a policy of directors' and officers' liability insurance, on such terms
conditions as may be approved by the Board of Directors. To the extent the
Company maintains directors' and officers' liability insurance, the Indemnitee
shall be covered by such policy in such a manner as to provide Indemnitee the
same rights and benefits as are accorded to the most favorably insured of the
Company's directors. Notice of any termination or failure to renew such policy
shall be provided to Indemnitee promptly upon the Company's becoming aware of
such termination or failure to renew. The Company shall provide copies of all
such insurance policies and any endorsements thereto whenever such documents
have been provided to the Company.

            10. Amendment/Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions of this Agreement
(whether or not similar) nor shall such waiver constitute a continuing waiver.
Any waiver to this Agreement shall be in writing.

            11. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives.

            12. Survival. This Agreement shall continue in effect during the
Indemnification Period, regardless of whether Indemnitee continues to serve as a
director of the Company or of any other enterprise at the Company's request.

            13. Severability. The provisions of this Agreement shall be
severable in the event that any provision of this Agreement (including any
provision within a single section, paragraph or sentence) is held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by
law.

            14. Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of three years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such three year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

            15. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Republic of Panama without
giving effect to the principles of conflicts of laws.
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            16. Choice of Forum. With respect to any legal action relating to
the interpretation or enforcement of this Agreement, the parties hereto
irrevocably agree and consent to be subject to the jurisdiction of the Courts of
the Republic of Panama.



                                         COPA HOLDINGS, S.A.


                                         By: ____________________
                                             Name:
                                             Title:


                                         [INDEMNITEE]



                                         By: ____________________
                                             Name: