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

Good morning, everyone. Thank you for standing by. Welcome to Valeris' first quarter 2023 financial results conference call. All lines are in listen-only mode. Following the company's presentation, we will open the call for your questions and answers. Please note that we are recording this event. This event is also being broadcast live via a webcast and may be accessed through the Valeris website. Those following the presentation via the webcast may post their questions on the platform. The management team will answer them during this call, or the Valeris Investor Relations team will answer them after the conference call is finished. To send your question via the webcast platform, click on the question mark below the video area and type your inquiry in the upper left corner. At this point, I would like to turn the call over to Ricardo Martinez, Investor Relations Director.

Please go ahead, Ricardo. Good morning and thank you for joining the call. With us today is our President and CEO, Enrique Beltranena, our Airline Executive Vice President, Holger Blankestein, and our Chief Financial Officer, Jaime Pous. They will be discussing the company's first quarter 2023 results. Afterward, we will move on to your questions. Please note that this call is for investors and analysts only. Before we begin, please remember 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 results to differ materially from expectations. As described in the company's filings with the United States SEC and Mexico's CNBB, These statements speak only as of the date they are made, and Volaris undertakes no obligation to update or modify any forward-looking statement. As in our earnings pre-release, our numbers are in US dollars compared to the first quarter of 2022, unless otherwise noted. And with that, I will turn the call over to Enrique.

Thank you Ricardo and everyone for joining us today. During the first quarter of 2023, we diligently delivered results in line with our full year guidance for capacity, load factors, fare levels and ancillaries. Equally important, we experienced sustained demand across our system. Our guidance for the year is still valid and maintained. We expect market demand to accommodate well within our full-year capacity guidance of around 10% ASM growth. We will continue to focus on delivering EBITDA margin expansion this year in a 29% to 31% range, an increase of 9% to 11% points versus 2022. I want to start by highlighting the results from the quarter. Total ASM increased 18% year-on-year, including a growth of 15% in domestic and 24% in international markets, highlighted by greater than 100% expansion in Central and South America. Higher ASM growth was also driven by better utilization of our A321 fleet, with revenue passenger miles per departure increasing by 20%. It is essential to note that versus the first quarter of 2019, our ASM grew around 66%, a testament to how Volaris took advantage of a once-in-a-lifetime opportunity to grow during the pandemic. The Mexican airline industry has undergone landmark consolidation in the last three years, much like the U.S. industry did in the previous decade. With the recent disappearance of Aeromar, our domestic market now has three leading carriers that offer competitive cost service and handle around 99% of the passengers in the domestic market. This landscape sets the stage for a future where we expect increasing profitability for the Mexican market. As expected, our capacity grew faster in the first quarter than our 10% annual guidance as our deliveries for the year are front-loaded into the first half. In the second half, we expect a reshuffle of capacity from domestic to international and growth in Central America provided regional tailwinds continue. To be clear, The 18% quarterly capacity growth was a pull forward in our planned expansion for the year. Given well-known Airbus delays and lower than expected time on wing of Pratt GTF engines, we decided to leverage the flexibility in our fleet plan to accommodate earlier deliveries, extend three aircraft Del Rey deliveries, and acquire engines. Due to these actions we do not expect disruptions during the second quarter and we do not believe today that any of our capacity deployment plans for the second half are in jeopardy. This year will mark a new era for Volaris, as we are set to receive the first NEO delivery from the largest ever Airbus order placed by us, along with Indigo's portfolio airlines. The scale of this order allows us to reduce our CASMEX fuel in the future structurally, thanks to more favorable fleet ownership costs. In short, our plan will drive further efficiencies, low cost going lower. Polaris has carefully developed a finance plan to support our CAPEX needs for 2023 and we do not expect our capital expenditures to impact our deleveraging objective for this year. Overall, our company and our markets continue to show strength. Demand during the first quarter was healthy in all segments and regions. TRASM increased 10% year-over-year to a new first quarter record of 7.71 USD, surpassing the former record spurt by vaccination travel last year. At the same time, CASM exfueled was 4.65 cents, reflecting our continuous strict cost control management. Volaris remains one of the top unit cost operators in the world and cost control continues to provide us with competitive advantages. In sum, this is more than just a critical cost control story. Volaris' cost advantage versus U.S. carriers has widened, allowing us to grow with profitability in the cross-border market once category 1 is restored. Finally, during the first query we observed positive indicators such as low unemployment rates, robust remittance flows, and high levels of foreign direct investment associated with the nearshoring trend. Moreover, federal subsidies on diesel prices are being phased out, giving us a level playing field versus bosses. To illustrate last year's sharp increases in oil prices prompted the Mexican government to subsidize the cost of diesel, the primary fuel used by buses. However, with the recent 50% reduction of the diesel subsidy, we have regained the advantage. We believe nearshoring is an economic reality here to stay, representing a robust and differentiated tailwind to our medium to long-term growth. At Volaris, we have established ourselves as the leading airline in several nearshoring epicenters. We are in the right country, industry, and segmentation to capitalize on the potentially decade-long nearshoring trend. I am pleased to inform you that the Mexican Congress approved amendments to aviation law last week. This week, the Senate is expected to vote on amendments to the law, and we are optimistic about a positive outcome. We anticipate that the new law will be published in the official Gazette within the next two weeks, allowing the authorities to request the final IAS assessment, which is projected to occur by the end of May or early June. Assuming a favorable assessment, we expect the U.S. government to fully implement Mexico's Category 1 upgrade in a few months. I want to point out that the amendments do not allow cabotage to foreign carriers. As we have stated, our guidance assumes that Category 1 will be commercially operative in the fourth quarter and we stand ready to be nimble should it happen soon. I will turn it over to Holger who will provide greater detail on our first quarter commercial and operational dynamics.