In addition, our discussion will contain forward-looking statements not limited to historical facts that reflect the company’s current beliefs, expectations and our intentions regarding future events and results. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially and are based on assumptions that are subject to change. Many of these risks and uncertainties are discussed in our annual report filed with the SEC.Now, I’d like to turn the call over to our CEO, Pedro Heilbron. Pedro Heilbron Thank you, Joe. Good morning to all and thank you for participating in our fourth quarter and full year 2011 earnings call. I would like to begin by congratulating our co-workers for their efforts in delivering a strong fourth quarter and a great year, one in which we delivered an operating margin of 21% and outstanding earnings growth. As always, our team began the year with an ambitious set of goals and objectives aimed at consolidating the competitive advantage of our hub as the best choice for intra-Latin American travel and improving the appeal of our products and our passengers’ travel experience, all while delivering world-class financial results. I’m happy to inform that with the support of a great team, our objectives were accomplished, and in many cases, surpassed. Among our main highlights for 2011, Copa Holdings delivered another year of strong growth with consolidated capacity increasing 22% and traffic not far behind, growing at a very healthy 21%. Strong demand trends and healthy yields led to exceptional revenue growth, which enable us to increase our unit revenues every quarter throughout the year. This along with the CASM ex-fuel fuel improvement led to operating margin expansion despite much higher fuel prices. In terms of our network expansion, 2011 was an outstanding year as Copa Airlines launched service to nine new cities. In June, we started service to Toronto, Brasilia, Porto Alegre and Nassau; and this past December to Chicago, Monterrey, Asunción, Montego Bay and Cúcuta. We’re pleased to say that these new routes are performing as expected and in many cases have exceeded our initial expectations.
In June, Copa Airlines transitioned from a four to a six-bank hub structure. The implementation of the six-bank hub has been a huge success, which is allowing us to better utilize the Tocumen Airport infrastructure, personnel and equipment, as well as enabling us to provide our passengers with more and better flight options and significant schedule improvements.Also during the year, our team once again delivered excellent operational performance as Copa Airlines on-time performance came in at 90.4% and 89.5% on a consolidated basis. This, along with a flight completion factor of 99.6%, place us once again among the best and most reliable airlines in the industry. With regards to our fleet, we ended the year with a consolidated fleet of 73 aircraft. As Copa received 10 new 737-800s, most of which included a 2% fuel burn improvement. Other important highlights for 2011 include the introduction of the Boeing Sky Interior in our new aircraft, the opening of new Copa Clubs or VIP lounges in Santo Domingo and Guatemala, and introduction of our mobile website and electronic boarding passes. So we continue to deliver what our passengers expect from us – a superior network for intra-Latin American travel with more choices, better schedules and a world class product. Now, looking at the main highlights for our fourth quarter. Consolidated passenger traffic increased almost 16%, led by our international traffic which expanded 21%. Strong overall demand resulted in a healthy revenue environment as both yields and RASM came in higher on a year-over-year and quarter-over-quarter basis. This healthy revenue performance along with a year-over-year reduction in a fuel unit cost allowed us to report operating earnings of $106 million, which represented an operating margin of 21% for the quarter. This along with great operational performance as well as the launch of five new destinations in December marked a strong ending to an exceptional year. Read the rest of this transcript for free on seekingalpha.com