E-NEWS UPDATE VOLUME 19 NUMBER 1116

COPA HOLDINGS REPORTS NET INCOME OF $43.1 MILLION IN 3Q

Panama's "model airline" with its Colombian subsidiary Aero Republica, reported net income of $43.1 million on revenues of $323.7 million in the third quarter. Net income was up 87% over the same quarter in 2008 when net income was $23.9 million. However, it was down 21.8% from the $55.2 million in the second quarter of the year. Third quarter results included a special charge of $14.6 million related to the retirement of four Aero Republica MD-80 aircraft as the airline becomes a 100% operator of Embraer-190s. It also included a net gain of $5.1 million from its fuel hedging contracts. Excluding the $14.6 million charge, the holding company would have reported net income of $52.6 million. Operating income for the 3Q09 came in at $45.9 million for an operating margin of 14.2% - one of the highest in the world. Load factor in the quarter was 75.8%, down 1.5% over the same quarter in 2008. Yields were 15.9 cents; with RASM at 12.7 cents, down from 15.7 cents in the same quarter last year, while CASM was down to 10.9 cents from 12.7 cents last year. It also has the highest average stock price of the four Latin American model airlines, in the $40 range on the New York Stock Exchange. Aero Republica has announced daily flights to Quito, Ecuador beginning on December 26. It currently operates to 12 domestic cities in Colombia and has direct flights to Caracas from Bogota and Cartagena as well as connectivity with Copa Airlines in its "Hub of the Americas" from seven Colombian cities. Copa Airlines currently operates 144 daily flights to 45 destinations in 24 countries in the Americas and provides access to more than 120 destinations through code sharing with Continental and other airlines. Copa is definitely our number one "model airline" in the region; congratulations to Pedro Heilbron and company.

IDB: LATIN AMERICA TO GROW 3% IN 2010

According to an article in America Economia, Luis Alberto Moreno, head of the Interamerican Development Bank (IDB), Latin America is the best region in resisting the global crisis and is already recovering rapidly with its economies growing at around 3% in 2010. He spoke during the APEC last week stating that investment in the region will reach $10 billion in 2010 and $12 billion in 2009. He also believes that South America will lead the recovery with countries like Brazil growing at 5% in 2010. And that growth will be important between Asia and Latin America. For the complete article go to www.americaeconomia.com. Way to go, Latin America.

TAM REPORTS 3Q NET INCOME OF $202 MILLION

Brazil's largest airline and member of the group of four "model airlines, reported net income of $202 million in the third quarter, compared to a loss of $349 million in the previous quarter. The strengthening of the Brazilian currency, the "real", which grew 11% in the quarter, also affected the airline's CASK, which dropped to 7.9 cents from 10 cents in the same quarter last year. Viva TAM.

LATIN AMERICA: AUDI GROWTH IN KEY MARKETS

Is the headline in the November 11 issue of Latin Business Chronicle, by editor Joachim Bamrud; which starts out with the statement: "Audi expects to see growth in Mexico, Brazil and other key markets this year despite the global crisis."  The article leads with an interview with Juergen Deforth, vice president of Audi Latin America, which begins with the statement: "Crisis. What crisis - the recent global crisis has barely been a blip in the road for the carmaker's performance in the region". For the complete, 'must read' article, go to www.latinbusinesschronicle.com. So, where's the crisis?

THE E-FUEL MANAGER BY LARRY S. WEAVER

T. Boone Pickens, the Texas billionaire investor turned-wind turbine and natural gas champion, said Thursday he expects the price of oil will hit $100 in 2010. Within 10 years, he thinks crude will make it to $300 a barrel. At the same time the EIA, IEA and OPEC all released their latest forecasts raising their estimates of worldwide demand by a small amount. The market result: Prices were down for the week. Supply is still outstripping demand and the latest indications from OPEC are that there will be no change in their quotas at the December meeting although current compliance by OPEC members is down to about 65 percent. Although he is not alone, I do not think that the $300 per bbl within 10 years - in constant dollars - is realistic. The $100 per bbl in 2010 is closer but I do not think the economy will support that much of an increase. $80 per bbl is here, however, and somewhat higher is very possible as the economy does pick up as this year ends and we go into 2010.

Other news, briefly

Pluna is acquiring additional Bombardier regional jets

Matias Campiani, CEO of the "born again" Uruguayan airline recently stated; "We want to acquire more aircraft in order to continue expanding our presence in Argentina and Uruguay". The airline has options for eight CRJs which could be delivered in 2010. However, Matias stated he is looking at leasing one or two additional aircraft in order to have them in early 2010. He also stated the airline will be profitable by the end of 2009. Way to go, Matias.

TACA launched new flights to Orlando from San Salvador

The Avianca/TACA synergy group airline launched three time weekly nonstop service between El Salvador and Orlando, Florida on November 5. The service is being provided with Embraer 190 regional jets and provides connecting service from its hub in El Salvador to Peru and some 41 destinations in 22 countries in the region. Stay tuned.

Peruvian Airlines is expanding domestic service

The Peruvian privately owned startup, which launched its first flight between Lima and Arequipa at the beginning of November, has announced that it plans to expand its domestic service with a flight between Lima and Tacna which is being launched this week, as well as adding local service between Cusco-Arequipa-Tacna. The airline is operating Antonov HUV aircraft and plans further expansion to Iquitos, Chiclayo and Pucalpa. Stay tuned

AeroSur is adding a B747-400 to its fleet in Bolivia

The Bolivian airline is replacing a B747-300 with a new generation B747-400 which has been operating for Virgin Atlantic. The airline is also operating a fleet of B737-300s and a B767-200 which operates the Miami route. The 747 will be used to operate to Madrid. One to watch.