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

Good morning, everyone. Thank you for standing by. Welcome to Valera's third quarter 2021 financial results conference call. All lines are in a listen-only mode. Following the company's presentation, 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. This event is also being broadcast live via webcast and may be accessed through the Valera's website. Those following the presentation via the webcast may post their questions on the platform and they will be either answered by the management during this call or by the Valeris Investor Relations team after the conference is finished. To send your questions via webcast platform, you need to click on the question mark just below the video area in the upper left corner and type in your question. At this point, I would like to turn the call over to Ms. Maria Elena Rodriguez, Valeris' Investor Relations Officer. Please go ahead, Maria Elena.

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 chief financial officer, Jaime Pous. They will be discussing the company's third 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 de Valores. Velares undertakes no obligation to publicly update or revise any forward-looking statements. Similar to the earnings press release, we are comparing our results to the third quarter of 2019 instead of the third quarter of 2020. We believe this will provide a better comparison to the financial and operating performance of the company. It is now my pleasure to turn the call over to Velares' President and CEO,

Mr. Enrique Beltranena Thank you very much, Maria Elena, and welcome everybody for joining us today. I would like to begin by expressing my appreciation to our family of ambassadors for their continuous efforts, passion, and commitment to keep Volaris ahead of the airline industry's recovery. Going into this quarter, we have budgeted ambitious key operational and financial performance metrics for the period. Despite the negative impact of the Delta variant, here we are again demonstrating not only the strength of the business model, but the resilience and experience of a solid, loyal, and effective management team who achieved results within the stated targets, overperforming the industry. I'm very proud of the Volaris team and of what we have accomplished together. Polaris has a proven executive management team with an average of more than 20 years of experience in the global aviation industry. We are all committed to maintaining our market leadership and first-year results to shareholders over the long term, just like I have been since the day we founded this company. We're here to stay for the long run. Together, We are prepared to take off to many routes and reach an ambitious growth plan, keeping unit costs low and delivering sustained profitability. Now, I would like to highlight the most important accomplishments in the third quarter on slide number four. First, we again demonstrated the company's agility and ability to adapt to a changing environment by rapidly deploying capacity to appropriate markets and stimulating last-minute demand. Second, Volaris continues to record one of the strongest recoveries among airlines worldwide during the variant waves of the pandemic. Volaris Ultraloca's carrier model continues to demonstrate resilience even more in downturns. Third, we provide the guidance on EBIT margin between 40% and 43%, and despite the third wave, here we are today delivering consistency at 41% of EBITDA margin for the third quarter, Six percentage points higher than the third quarter of 2019. We managed to post a third quarter with disciplined growth while improving our balance sheet, and we are also one of the few airlines in North America that did not revise guidance down for the third quarter. Fourth, Volaris uniquely distinguishes itself in the global aviation industry by its results. For the third quarter, Volaris' capacity expansion was 21% in terms of ASMs compared to the third quarter of 2019, with a solid low factor of 85.4%. Volaris achieved strong cash generation of $1 million per day, closing the third quarter with $624 million in cash and cash equivalents, which represents 33% of last 12-month revenue. Polaris' TRASM improved by 12% to 168 pesos compared to 2019. Polaris' ancillary revenues ramped up to 42% of operating revenues. Polaris' CASM ex-fuel closed at 4.09 cents for the third quarter, one of the lowest unit costs in the global airline industry. Finally, a very important number, Volaris Leverage, measured by net debt to EBITDA, improved by 2.8 times, the lowest in the company's history. Fifth, we remain focused on strengthening the foundation of our long-term growth with profitability. We are the leaders in the Mexican domestic market, and we continue to see opportunities with tremendous potential to grow in our core markets and to expand, Thank you, Enrique.