Copa Airlines tries to combat regional Latin American weakness as its margins sink

Weak economies in Latin America continue to drag down the results for Panama's Copa Airlines, reflected in a 10.4ppt drop in its 2Q2015 operating margin to 9.1%. The airline's results were worse than expected, driven by a particularly challenging Jun-2015.

Central American poster airlines Copa has been battling difficult dynamics in Venezuela and Brazil for roughly a year, and during 2Q2015 some challenges emerged in its Colombian markets. The airline is taking steps to adjust its network to lessen its exposure to those regions, but they still comprise a sizeable portion of Copa's operations.

Copa does foresee some slight sequential improvement in its yield performance from 2Q2015 to 3Q2015, but third quarter yields are still expected to decline in the double digits.

The company has issued a second downward revision to its unit revenue and operating margin guidance for CY2015, and it seems some of the obstacles Copa has faced throughout the last year are lingering into 2016.