Copa Holdings, S.A.

Ladies and gentlemen, thank you for standing by. Welcome to Copa Holden's third quarter earnings call. During the presentation, all participants will be in 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 then 1 on your telephone keypad. As a reminder, this call is being webcast and recorded on November 19, 2020. Now I will turn the conference over to Raul Pascual, Director of Investor Relations. Sir, you may begin.

Thank you, Sarah, and welcome everyone to our third 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 and the restart of our operations. followed by Jose, who will discuss our financial results. Immediately after, we will open up the call for questions from analysts. COPPA 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 discussed in our annual report filed with the SEC. Now, I'd like to turn the call over to our CEO, Mr. Pedro Herrera.

Thank you, Raúl. Good morning to all, and thanks for participating in our third 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 our coworkers for their commitment to the company and recognize their continuous efforts and many sacrifices during these difficult times. To them, as always, my utmost respect and admiration. As expected, given government restrictions in the region related to the COVID-19 pandemic, we were not able to provide service for the first 45 days of the quarter. On August 14, after five months of virtually no operations, COPA was allowed by the government of Panama to start operations with restrictions on the number of flights and the entry into Panama of non-citizens and non-residents. It began with a twice-a-week operation, serving eight destinations. Since then, the company has been gradually spooling up its network, restarting destinations and adding frequencies as quickly as the easing of restrictions and air travel demand has permitted. We ended the quarter with service to 15 destinations. Although September only amounted to 3% of pre-crisis capacity, the gradual restart of flight allowed us to become even more proficient in the new, more complex operating procedures and enhanced biosafety protocols. and to demonstrate our readiness to operate safely and reliably. On October 11, the Panamanian government's restrictions on non-citizens, non-residents, and number of flights were lifted, which, as expected, had a positive effect on our ability to continue building up the network, ending the month with service to 30 destinations representing close to 15% of ASMs compared to October 2019. We project to end the year having restarted service to more than 50 destinations and plan to operate in December approximately 40% of 2019's capacity. In August and September, while the restrictions on inbound Panama traffic were still in place, Load factors were approximately 60%. In October, after the above-mentioned restrictions were lifted, we saw healthier loads, approaching 70% for the entire month. Based on the flown traffic over the past three months and the bookings we're receiving for the near future, we believe demand will be able to sustain our current capacity plan for the remainder of 2020. In terms of financial results, with only 1.5% of our pre-crisis capacity, this was a very challenging third quarter. We recorded a net loss, excluding special items, of $121.6 million, making this our second quarterly loss on an underlying basis in 20 years, with the other being the second quarter of this year. By exercising great cost discipline and a better than expected sales and refunds performance in the quarter, we were able to keep our cash consumption well below our original expectations to about $36 million per month. Despite the encouraging progress in the vaccine development efforts, we continue preparing for what we believe will be a challenging 2021. as our region could still be subject to new infection waves with the possibility of further travel restrictions and a weakened demand environment, especially while we wait for the vaccines to become widely available. That being the case, we have taken many steps to strengthen the company and maintain one of the strongest financial positions in the industry. As of today, We have adjusted the size of the company to better match our future capacity and continue working on cost reduction efforts as we believe keeping a competitive cost structure and a strong financial position will keep us among the best prepared airlines to come out ahead once this crisis is over. We have delivered the first four Embraer aircraft to the new owner and expect to have delivered the entire fleet by June 2021. We signed a letter of intent to sell the first two Boeing 737-700s and continue actively marketing the remaining 12 aircraft. We have a plan in place to comply with all new requirements and return our six Boeing 737 MAX 9 aircraft to service. allowing us to offer a more competitive product in our longer segments. We're also in advanced discussions with Boeing and expect to reach a settlement agreement soon. Regarding our expiring leases, we have agreed to extend some of our leases on a power-by-the-hour basis, which adds even more flexibility to our fleet plan in case the market recovers faster than expected. And in terms of liquidity, we obtained new credit facilities for an aggregate amount of $165 million, bringing our total committed unrun credit facilities to $305 million, and total available liquidity to $1.3 billion at the end of the quarter. Lastly, I'd like to reiterate that 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 for a full service carrier, best in time performance, and strongest balance sheet. Going forward, the company expects that its hub of the Americas will be an even more valuable source of strategic advantage, It's likely that fewer intra-Lapin America markets will be able to sustain direct point-to-point service, so we believe the help 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.