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Copa Holdings (NYSE:CPA) is the parent of Copa Airlines and Aero Republica which provide airline service throughout Latin America. Second quarter financials came in with what could probably be called outstanding results in the face of the increased fuel prices encountered during the quarter.

Fuel cost increased $37 million (56% increase in price per gallon) over Q2, 2007, more than the net income left of $30.4 million. In testament to Copa’s growth, the net income is essentially equal to the Q2, 2007 results and provide earnings of 70¢ per share for the quarter. The fuel cost penalty shows up when comparing to the 1st quarters net of 91¢ per share.

Profitable growth is the benchmark for Copa and it continued to perform. Revenue for the quarter was up 26.6% over a year earlier. Capacity expanded 11.3% over the same time period. Year over year the load factor increased 2.9% to 74.5%. Continued growth will come from route expansion as well as pricing. Copa currently offers service to 41 cities in 22 countries through its hub in Panama. The company expects to increase to 45 cities in 24 countries by the end of the year.

From personal experience, I can attest that Copa gives an excellent level of customer service. Its fleet of modern, fuel efficient jets allows the company to absorb higher fuel costs better than most competitors and stay profitable. Also, I see the stock as an excellent play on growing affluence in Latin America. CPA is a component of this site’s Opportunities Portfolio. I will do at least quarterly follow up on the stocks in the portfolio.

Note: I currently do not have a personal position in CPA.

Source: Copa Holdings: Flying High Over Latin America