Copa Holdings, S.A.

Ladies and gentlemen, thank you for standing by. Welcome to the Copa Holdings second 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 one one on your telephone. As a reminder, this call is being webcast and recorded on August 4th, 2022. Now, I will turn the conference over to Daniel Tapia, Director of Investor Relations, sir, you may now begin.

Thank you, Katherine. And welcome, everyone, to our second quarter earnings call. Joining us today are Pedro Heilbron, CEO of Copa Holdings, and Jose Montero, our CFO. First, Pedro will start by going over our second quarter highlights, followed by Jose, who will discuss our financial results. Immediately after, we will open 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 file with the SEC. Now, I'd like to turn the call over to our CEO, Mr. Pedro Hedron.

Thank you, Daniel. Good morning to all, and thanks for participating in our second quarter earnings call. Before we begin, I'd like to thank all of our coworkers for their commitment to the company and recognize their continuous efforts and dedication to keep COPPA at the forefront of Latin American aviation. To them, as always, my utmost respect and admiration. As all of you are aware, the significant increase in jet fuel prices has put serious pressure on the operating costs of the entire airline industry. This impact was especially noticeable in the second quarter, in which in our case, the effective price of jet fuel increased more than 86% when compared to the same period in 2019. On the positive side, Passenger yields for the quarter came in higher by 10.1%, partially offsetting the additional fuel costs. The combination of these two factors, plus our ability to control our non-fuel-related costs, enabled us to deliver a 6.1% operating margin and an adjusted net profit of $13.2 million in Q2. Now I would like to mention the main highlights for the quarter. Our capacity reached 97% of second quarter 2019 ASMs. RPMs decreased 3.8% when compared to Q2 2019, resulting in an 84.8% load factor. Passenger yields came in at 13 cents, or 10% higher than in the second quarter of 2019, while cargo revenue was 62% higher, resulting in unit revenues, or RASM, of 11.6 cents and 11.3% increase compared to the second quarter of 2019. Ex-fuel CASM decreased from 6.2 cents in Q2 2019 to 6 cents, representing an almost 5% decrease on 3% less capacity. And on the operational front, COP Airlines delivered an on-time performance of 85.9% and a completion factor of 99.8%. In terms of fleet, during the quarter we took delivery of one 737 MAX 9 to end the quarter with a total of 94 aircraft, reaching 92% of our year-end 2019 fleet size. With the addition of this aircraft and the expected remaining deliveries for the year, more than 20% of fleet will be composed of MAX aircraft, resulting in valuable fuel efficiencies. These figures also include our recently retrofitted 737-800 freighter, which operated during the entire quarter, carrying almost 30% of our total cargo volume. By shifting most of our previously third-party cargo operation to the retrofitted freighter, we're able to transport higher cargo volumes at lower cost. In terms of our network, Copa Airlines started operations in two new cities during the quarter, Santa Marta in Colombia and Barcelona in Venezuela, ending the quarter with service to 76 cities in 32 countries, compared to 80 cities in 33 countries in year-end 2019. We also announced a new service to the Santa Lucia Airport in Mexico City starting in September, which will complement our existing service to Mexico City as we continue strengthening and solidifying our position as the most complete and convenient hub in Latin America. Turning now to Wingo, Wingo continues its regional expansion with the announcement of four new routes starting in October. With these additions, Wingo will operate 31 routes with service to 21 cities in 10 countries. you can see despite the current fuel price environment affecting the entire airline industry we have established our capacity and network to near pre-pandemic levels and continue delivering profitable financial results looking ahead we continue to see a recovering demand environment in the region and healthy booking trends, which lead us to anticipate an increase in our unit revenues for Q3 and consequently to expect higher operating margins quarter over quarter. In Q3, we also expect to bring back our capacity measured in ASMs to 100% of our pre-pandemic levels. Nonetheless, Considering the uncertainty of the current economic environment, we remain cautious and continue to closely monitor demand patterns in the region. So we will remain focused and flexible in terms of capacity, adjusting our plans as needed. I'd like to conclude by reiterating that we have a proven and strong development, which is based on operating on the best and most convenient network for intra-Latin America travel from our hub of the Americas, leveraging Panama's advantageous geographic position with low unit cost, best on time performance, and a strong balance sheet. And we expect that our help of the Americas will continue to be a valuable source of strategic advantage. Now I'll turn it over to Jose, who will go over our financial results in more detail.