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

Good morning, everyone. Thank you for standing by and welcome to the Velouris Third Quarter 2019 Financial Results Conference Call. All lines are in a listen-only mode. Following the company's prepared remarks, we will open the call for questions and answers. Instructions on how to ask a question will be provided at that time. Please note this event is being recorded. At this point, I would like to turn the call over to Ms. Maria Rodriguez, Valeris Corporate Finance and Investor Relations Director. Please go ahead, Ms. Rodriguez.

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 third quarter results announced yesterday. 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, please let me remind everyone that this call may include forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are subject to several factors that could cause a company's actual results to deter maturely from expectations for reasons described in the company's filings with the U.S. Securities and Exchange Commission. Furthermore, Volaris undertakes no obligation to publicly update or revise any forward-looking statements. It is now my pleasure to turn the call over to Volaris' President and CEO, Mr. Enrique Beltranena.

Thank you, María Elena. Good morning, everyone, and thank you for joining us today. As published in our earnings report released yesterday, Volaris Delivered a strong quarter performance that is the result of a solid team effort which includes all of our ambassadors and the company management. Let me begin with some key facts and data of the third quarter. EBITDA margin improved by 7.6 percentage points versus last year, closing at 34.6%. Total operating revenues increased by 30% year-over-year. Total ancillary revenues increased 36% year-over-year. Volaris ancillary revenues per passenger increased 14% a new high level. TRASM continues improving 11% year-over-year. Total ASM grew 17% in line with our stated guidance. The RPMs increased by 19% and load factor for the quarter was 85%. Domestic load factor was 87.5% and Volare sustained its number one position in the domestic market. International load factor of 80.1% shows a steady trans-border market where we experienced stronger loads in our VFR traffic segment. The most important one, CAASMEX Fuel during the quarter was 3.99 U.S. dollar cents and on-time performance is on track and scheduled reliability is at 98.9%. Volaris retained its place as the most punctual airline in Mexico. Return on investment capital pre-tax of 21% at the end of the quarter and the earnings per ADS year to September end at 68 U.S. dollar cents. There are three main achievements supporting Volaris' growth in the last 12 months. The first one, we think Volaris' network in terms of capacity deployment and expansion caused a complete structural network change in the market. Volaris now has the strongest point-to-point network, schedule offer, and frequencies in the domestic market. Volaris is the only carrier in the history of aviation in the country I want to repeat this number, only carrier in the history of aviation in the country that has transported over 20 million passengers during a 12-month period. In the last 12 months, on top of that, TRASM improved 11%. Our ultra-low-cost capacity growth, driven by loafers, induced two of our main competitors to downsize in the domestic market, and to instead focus on their international operations. We believe Volaris can continue growing at a higher pace than our high-cost competitors, given our sustainable cost structure, our unbounding pricing strategy with constant growth in ancillary revenues, and our focus on flying in under-penetrated air travel market, which has been augmented by Mexico's expanding middle class. The second reason is that the competitive environment has been rational in both the domestic and the trans-border market. The grounding of the Boeing 737 MAX aircraft and Sukhoi fleet in Mexico has reduced certain segments of capacity. Some of our main U.S. and Central American competitors have redeployed capacity to other geographies, and all in all, both markets have enjoyed a better base fare environment We know that the lowest unit cost always wins. Volare's ultra-low cost position in our cross-trend and main differentiator going forward is this lowest cost. This gives us an advantage and enables us to keep growing at a fast pace with the right fleet. And the third reason is that from the macroeconomic perspective, Volaris continues benefiting from a set of economic factors which are to Volaris' model such as remittances, employment, consumer confidence, jet fuel price and foreign exchange remained stable in the last quarter, so we think we can keep on performing the way we are performing. We plan to finish the current year with an ASM growth of 17% and forecast a full year Evidar Margin is the ballpark of high 20s, assuming current foreign exchange rate and fuel prices remain stable for the rest of the year. For 2020, we expect higher capacity into the market, mainly due to the return of the Boeing 737 MAX, and additionally, we observe some softness in the private investment in Mexico, which is impacting the GDP. Therefore, We are planning lower growth than in 2019 and estimate an ASM growth of 10% for 2020. Depending on TRASM's strength, we foresee an up or down 2 percentage points flexibility in capacity. And most of this capacity will be added to our core markets and we will continue to improve utilization of assets resulting in healthy capacity growth. Now, I would like to turn the call over to our airline executive vice president, Holger Blankenstein, to comment further on the extraordinary results of Volaris during the third quarter. Holger, please.