Copa remains comfortable with 20% growth rate in 2011

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Copa Holdings remains bullish over growing its capacity by 20% this year as demand in its network continues to be robust.

Copa's available seat mile production contrasts sharply with many North American carriers that have recently opted to cut capacity growth in the run-up of oil prices.

During a 5 May earnings call Copa CEO Pedro Heilbrbon explained the company's planned capacity increase as "easy growth, in terms of flying it is about 10% additional flights so a lot has to do with length of haul. So our growth in terms of flights this year is not much different than we have been doing for the last five years on average".

Copa is adding a total of 10 Boeing 737-800s in 2011, with three already delivered and the remaining seven deliveries occurring in the second half of the year. The company is also adding four new destinations - Toronto, Nassau and Porto Alegre and Brasilia in Brazil.

"It's totally manageable for us," said Heilbron of the growth. "It is not something that is creating any particular stress in our system."

Overall robust demand and positive trends in corporate travel led Copa to revise upwards its unit revenue growth in 2011 by 7% compared to previous estimates to 13.2 cents. The latest estimate is 2% higher Copa's overall unit revenues for 2010.

For the first quarter of this year Copa's pre-tax profits soared 110.2% year-over-year to $104 million. Its operating revenues grew 24.7% to $423 million as operating income improved 29.2% to 101 million, resulting in an operating margin of 23.9%.

Copa's expenses in the quarter increased by 23.4% to $322 million, driven largely by a 48.6% rise in its fuel costs.

The company's cash and short-term investment balance as of 31 March was $454 million. By year-end Copa expect to operate a fleet of 73 aircraft consisting of Next Generation Boeing narrowbodies and Embraer E-190s.