Copa Holdings, S.A.

Ladies and gentlemen, thank you for standing by and welcome to COPA Holdings second quarter earnings call. During the presentation, all participants will be on a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, you will have to press star 1 on your touch phone As a reminder, this call is being webcast and recorded on August 6, 2020. Now I will turn the conference call over to Raul Pascual, Director of Investor Relations. Sir, you may begin.

Thank you, Lawrence, and welcome everyone to our second quarter earnings call. Joining us today are Pedro Hebron, CEO of Copa Holdings, and Jose Montero, our CFO. First, Pedro will start by going over the actions the company has taken to mitigate the impact of the COVID-19 crisis, followed by Jose, who will discuss our financial results. Immediately after, we will open the call for questions from analysts. Copa Holdings financial reports have been prepared in accordance with international financial reporting standards. In today's call, we will discuss non-IFRS financial measures. A reconciliation of the non-IFRS to IFRS financial measures can be found in our earnings release. which has been posted on the company's website, COPPA.com. Our discussion today will also contain forward-looking statements, not limited to historical facts, that reflect the company's current beliefs, expectations, and or 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 subject to change. Many of these are discussing our annual report with the SEC. Now I'd like to turn the call over to our CEO, Mr. Pedro Hebron.

Thank you, Raul. Good morning to all, and thanks for participating in our second quarter earnings call. I hope that all of you and your families are doing well and staying safe. Before we begin, I'd like to thank all of our coworkers for their commitment to the company and and recognize their efforts and many sacrifices during these very difficult times. To them, my utmost respect and admiration. Over the last several months, many countries, including Panama, extended air travel restrictions. We have not been able to provide scheduled commercial operations since March 22nd and remain subject to the eventual easing of air travel restrictions in the region. During the second quarter, we completed a total of 86 humanitarian and charter operations, which although only provided a marginal revenue contribution, allowed us to demonstrate our readiness and ability to operate flights with effective biosafety measures. This has been the most challenging quarter in our history. The current demand environment and operating restrictions have had a significant impact on our financial results. We recorded a net loss of $386 million, including significant non-cash and non-recurring charges, which Jose will explain in detail. Excluding special items, we would have reported a net loss of $114.6 million, our first quarterly loss on an underlying basis in 20 years. During this period, we have obtained new credit facilities, once again demonstrated our ability to control costs, and kept our cash burned below our original expectation. We closed the quarter with $1.3 billion in cash and undrawn committed credit lines. Our very strong liquidity position and great cost discipline, we believe makes us one of the best prepared airlines to withstand the crisis. Assuming there are no further extensions to the air travel restrictions in Panama, we will restart our commercial operations on September 4th. The scaled down schedule equivalent to less than 10% of our September 2019 capacity. In the meantime, For the month of August, we have obtained approval to operate a limited number of humanitarian flights. Initially, we will serve 10 cities for passengers departing and connecting via Panama, while arrivals in Panama will be subject to specific approvals by the Panamanian government. Subject to the easing of travel restrictions in the region and the demand environment, Our plan is to gradually spool up our network so that by December 2020, we're at approximately 30 to 40% of December 2019 capacity. To adjust to this reduced demand and capacity expectations, we continue making changes to our fleet. We finalized the sale of all our Embraer aircraft, engines, and spare parts, and have agreed to deliver these assets during the next 12 months. We're also marketing for sale our Boeing 737-700 fleet and plan to operate a simplified fleet of Boeing 737-800 and Mach 9s. And in order to retain flexibility, we plan to keep several aircraft in long-term storage to be able to accelerate our capacity plans if needed. Lastly, we have a proven and very strong business model, which is based on operating the best and most convenient network for intra-Latin America travel from our hub of the Americas, leveraging Panama's advantageous geographic position with the region's lowest unit cost, best on-time performance, and strongest balance sheet. Going forward, we expect that our hub of the Americas will be an even more valuable source of strategic advantage, especially if fewer intra-Latin American markets are able to sustain direct point-to-point service. We believe the hub of the Americas will be the best position to serve this market. Now I'll turn it over to Jose, who will go over our financial results in more detail.