Controladora Vuela Compania de Aviacion, S.A.B. de C.V.

Good morning, everyone. Thank you for standing by, and welcome to Valeris' first quarter financial results conference call. All lines are in a listen-only mode. Following the company's prepared commentary, we will open the call for questions and answers. Instructions on how to ask a question will be provided at that time. Please note that this event is being recorded. At this point, I would now like to turn the call over to Ms. Maria Elena Rodriguez, Valeris' Corporate Finance and Investor Relations Director. Please go ahead.

Good morning, everyone, and thank you for joining the call. With us today is our president and CEO, Enrique Beltranena, our airline executive vice president, Holger Blankenstein, and our vice president and CFO, Sonia Jerez. We will be discussing the company's first quarter results announced this morning. Afterwards, we will move on to your questions. Please note that this call is for investors and analysts only. Any questions from the media will be taken separately. Before we begin, let me remind everyone that this call may include forward-looking statements within the meaning of applicable securities law. Forward-looking statements are subject to several factors that could cause the company's actual results to differ materially from expectations for reasons described in the company's filings to the U.S. Securities and Exchange Commission. Furthermore, lawyers undertake no obligation to publicly update or revise any forward-looking statements. Now my pleasure to turn the call over to Volaris' president and CEO, Mr. Enrique Beltranena.

Thank you, Maria Elena. Good morning, everyone, and thank you for joining us today. Let me begin by giving you some key facts that demonstrate Volaris' strong first quarter 2019 improvement versus the same period last year. ASMs grew by 13%. Passenger volume grew by 16%. Launched operations in 16 new domestic routes and launched for sale 17 new routes. Total operating revenues increased by 23%. Total auxiliary revenues increased by 30.5%. T-RAS increased by 9% in peso cents, unit cost extreme reduction of 4% in peso cents, EBITDA margin improved 620 basis points, closing at 21%, operating cash flow generation of 3.7 billion pesos, an improvement of 1.3 billion pesos, Polaris passenger domestic market share at 32% versus previous year at 29%, on-time performance measured at arrival for 15 minutes at 86.7%, Our schedule completion was 99.5%. This strong scorecard shows a healthy improvement versus the same period last year, and very important, continuing positive momentum quarter over quarter to the extent that TRAS increased in the first quarter of 2019 was better than the first quarter of 2018, and 2017 as well than the last quarter of 2018, despite being a full low season quarter. Holger Blankenstein and Sonia Jerez will provide more detail on these improvements later on this call. Let me start tackling the first part. Revenue expansion was driven by strong domestic traffic, facilitated by healthy ASM growth We continue to see robust consumer confidence, which strengthens demand for domestic flights in the Volaris VFR target segment. The market has benefited from a reduction in international capacity from our competitors, especially in the trans-border market. During the quarter, Volaris launched a new fare modality which off-sales key ancillaries to our passengers by combining the airfare with other separately sold products, including baggage, as one of the most important. This innovative fare modality has boosted non-ticket revenues for the quarter and has helped the market penetration of our ultra-low-cost carrier model. All these elements reflect the company's focus on further improving It's top line and keeps on growing our ultra-low cost carrier model penetration to the extent that as of March, passenger market share is already at 32%. On the unit cost side, unit dollars cash and ex-fuel decreased by 9% versus the first quarter of 2018. This unit cost reduction reflects the benefit of the company-wide cost saving initiatives implemented last year as well as new initiatives which have shown results in the first quarter. In the first quarter, the unit cost of the second largest Mexican carrier was double ours. Nevertheless, total U.S. dollar has decreased only 4%, reflecting an increase in fuel prices due to a change from the Mexican supplier's transfer cost policy affecting all the industries. The company has formally disagreed with the incremental transfer costs and has been working to try to find a propositive solution. Combined, our unit revenue improvement and cost efficiencies generated a basically break-even first quarter yield by farther than first quarter of 2018. This improvement occurred despite the fact that the Holy Week and the Eastern Week took place in April. The surge in seasonal demand for Easter will be reflected in our results during the second quarter of this year. Operating cash flow generation in the first quarter was 3.7 billion pesos. During this period, the company also repaid a short-term 463 million pesos denominated working capital facility, which expired. We are reviewing alternatives in order to replace these pesos denominated financing facility. have launched a tender on leases for 22 new NEO aircraft from our original Airbus order to be delivered from 2020 to 2022 at competitive lease rates. This action leaves the company with fully financed PDPs and assurance of lease agreements for these 22 aircraft until the end of year 2022. We have just launched our new initial travel package platform Branded Yabas, a Mexican-Colombian term that means all you go. This business allows Volaris to capitalize on its popular travel website, which is the largest in Mexico in terms of monthly visits, with more than 4.5 million per month. The Volaris booking website will refer traffic to a new Yabas website that will allow Volaris customers to buy additional services including packages with hotels, Transfers, car rentals, and entertainment, as well as flight tickets. Now let me hand over to our Earning Executive Vice President, Holger Blankenstein, to go into detail about revenues and operations. Please, Holger.