Copa Airlines’ strong financials remain intact as it works to mitigate Venezuela’s volatility

Copa Airlines unsurprisingly turned a strong 1Q2014 financial performance, bolstering its stature as one of the best performing carriers. Despite some lingering headwinds from withheld payments by the Venezuelan government, overall Copa enjoyed strong demand throughout its network as the carrier continues to leverage Panama's favourable geography as a prime connecting point between North and South America.

The carrier is taking steps to mitigate volatility created by the Venezuelan government withholding payment to numerous carriers through capacity reductions designed to ease its exposure to Venezuela's thorny currency management scheme.

While Latin America's largest economies Brazil and Mexico continue to see slower rates of economic growth, Copa predicts a GDP increase of 2.7% for the region in 2014. The uptick is fuelling a relatively bullish outlook by the carrier, underscored by its estimated operating margin guidance of 19% to 21%.