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

Good morning, everyone. Thank you for standing by. Welcome to Volare's first quarter 2021 financial results conference call. The lines are in a listen-only mode. Following the company's prepared commentary, we will open the call for your 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 like to turn the call over to Ms. Maria Elena Rodriguez, Volare's 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 Beltranen, our Airline Executive Vice President, Holger Blankenstein, and our Chief Financial Officer, Jaime Bols. They will be discussing the company's first quarter 2021 results. 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 on an individual basis. 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 the company's actual results to differ materially from expectations for reasons described in the company's filings with the U.S. Securities and Exchange Commission and the Comisión Nacional Bancaria y Valores. Furthermore, Velarys undertakes no obligation to publicly update or revise any forward-looking statements. It's now my pleasure to turn the call over to Velarys' President and CEO, Mr. Enrique Dantanez.

Thank you very much, Marielena, and thank you very much to everybody for joining us today. There are five key messages I would like to emphasize this morning. The first one In the first quarter of 2021, Volaris demonstrated its ability to adjust capacity to match demand with a focus on rebuilding total revenue per available seat mile after the second wave of the pandemic. Throughout the first quarter, Volaris demonstrated flexibility and broadly adjusted capacity in face of a volatile demand environment. We finished the quarter operating 88% of the ASM capacity flown in the first quarter of 2020, exceeding the guidance of 80% provided in our last call, and far better than any public operator in North America. For the month of January, capacity measured by available SIGMAS was 97% of the same period of 2020. After the Christmas holiday season, specifically in mid-January, we observed an increase in COVID-19 cases both in Mexico and in the United States, which negatively affected the demand for air travel. Even more so when stay-at-home city orders and travel restrictions were enacted. Soon after restrictions were implemented, during February, we drastically reduced total capacity to 75% of ASMs versus the previous year. Moreover, we shifted 35% of our international capacity back to the Mexican domestic market, which proved to be the right course of action. As we observed a pickup in demand, we reinstated capacity for March operating total capacity at 93% of ASMs versus the same period of last year. This capacity increase was mainly driven by the domestic market, where we operated 105% of ASMs. Our active capacity management allowed us to dramatically improve fares and provide the opportunity to stimulate ancillary revenues. At the first signs of recovery in March, Our agility allowed us to capture the rebound in demand through higher capacity, healthier load factors, a strong unit revenue package. To put our flexible capacity management into context, TRAS increased over 70%, 70% from early February to late March. I'm proud that as a team, in a quarter that is, seasonally challenging, we were one of the very few airlines in the world that delivered 93% of capacity versus the first quarter of 2020, with only a single digit of total revenue per available seat mile contraction year over year, bearing in mind that the pandemic started it to affect Mexico only in the second half of March 2020. My second message is that Volaris continues to take strict measures to prevent liquidity, closing the first quarter with $423 million in cash and cash equivalents. For the first quarter, we delivered the daily cash burn that is 23% lower than our original guidance, which Jaime will detail. It is worth highlighting the strong cash generation provided by our successful 50th anniversary anniversary promotion, which surpassed last year's sales despite the pandemic. In the face of the traffic reduction in February, we went one step further in our cash preservation strategy. During the first quarter, we targeted an additional working capital relief of over $100 million. I want to thank you, our suppliers, for their continuing support to Volaris in all these months of the crisis. My third message is that we remain focused on maintaining our lean cost structure with one of the lowest unit costs in the global airline industry. Despite the capacity adjustments throughout the first quarter, we kept costs under control. The company achieved the cost per available seat mileage fuel of 478 US dollar cents for the first quarter of 2021, which is probably one of the lowest in the world. Talking about cost and focusing on the environmental perspective, in the first quarter, we incorporated an additional A320 NEO aircraft to our fleet, closing the quarter with fuel-efficient NEO aircraft representing 36% of our total fleet. The fourth message is that our recovery is gaining momentum And in the first quarter, we focused on strengthening the foundation of our long-term growth. The vaccine rollout in the U.S. and in Mexico has gained momentum in our markets, and confidence in the air travel is returning finally to our system. Polaris' recovery is unique in the world. Our competitors scaled down to an aggregate reduction of 30-plus percent of the Mexican fleet. For years, Volaris has been preparing itself to have the lowest unit cost and a strong balance sheet in order to seize such an opportunity. As a result, and looking at the demand coming back, we executed agreements to incorporate eight additional ASD-20neo aircraft to our fleet in 2021. This additional capacity will be deployed primarily to strengthen our leading position in the Mexican domestic market. My fifth message is that our priority for the second and third quarters is to accelerate Volaris' recovery with profitability and ensure a solid infrastructure to support this growth. In the first quarter, our network strategy was focused on defending profitability and preserving liquidity. Our March 2021 figures and our capacity management, the flexibility that we provided to the network were a testament to the Mexican domestic market opportunity and to Volaris' potential to expand its international network as the United States and the Central American markets recover. Furthermore, our priorities for the remainder of the year are First, generate the consistent growth for our investors with actions in line with our sustainability program. Grow and consolidate our leadership in core markets while increasing presence at Mexico City airport. Accelerate the return and expand our operations in Central America. Ensure a solid corporate infrastructure with the highest industry standards on training and safety. as well as technological tools to foster our commercial and administrative needs for sustainable growth, maintain a peaceful labor environment with productive and flexible terms and conditions, and finally, preserve our solid capital structure balancing short-term liquidity with the right long-term funding to support our growth. Having said this, Let me pass it over to our Airline Executive Vice President, Holger Blankenstein, to comment on revenues and the commercial strategy, and to provide you guys a guidance on capacity for the following months. Holger, please. Thank you, Enrique.