Panama City-based Copa Holdings reported $102.3 million net profit for the first quarter of 2017, down 11.4% from $115.5 million net income for 1Q 2016.

Copa Holdings—the parent company of Panama’s Copa Airlines and Copa Airlines Colombia—said the first-quarter results reflect improving demand trends combined with continued cost discipline. The company said higher load factors and yields were behind revenue growth and margin expansion seen during the quarter, as compared to 1Q 2016.

Copa’s first-quarter revenue increased 10.6% year-over-year (YOY) to $616.7 million, versus $557.5 million a year ago. Operating expenses were up 7.8% to $499.2 million as fuel and personnel expenses rose 12.9% and 8.2% respectively YOY.

Operating income for the quarter was $117.5 million, up 24.4% over $94.5 million in 1Q 2016, which the company attributed to a 4.3% increase in capacity and a 6% increase in RASM. Copa’s operating margin for the quarter was 19.1%, up 2.1 points YOY.

Copa’s consolidated first-quarter traffic increased 9.9% to 4.7 billion RPMs as capacity grew 4.3% to 5.8 billion ASMs, resulting in a load factor of 81.5%, up 4.1 percentage points. Yield was up 0.9% YOY to 12.7 cents.

As of March 31, Copa’s fleet totaled 101 aircraft comprising 66 Boeing 737-800s, 14 737-700s and 21 Embraer E190s. The company took delivery of two 737-800s during the quarter.

Looking ahead, Copa raised its consolidated capacity guidance for 2017 by a full percentage point, saying it is now expected to grow approximately 7% primarily from higher aircraft utilization. Copa’s full-year 2017 operating margin guidance was unchanged, and is expected to be towards the high end of its 15% to 17% guidance range, the company said. The company’s guidance for 2017 includes an expected load factor of approximately 81%, RASM at 10.4 cents; CASM ex-fuel at 6.4 cents and an estimated jet fuel price of $1.75 per gallon.

Mark Nensel