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

Good morning, everyone. Thank you for standing by. Welcome to Valera's first quarter 2025 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 webcast and can be accessed through the Valera's website. 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 is our President and CEO, Enrique Beltranena, our Airline Executive Vice President, Holger Blankestein, and our Chief Financial Officer, Jaime Poz. Today we'll be discussing the company's first quarter 2025 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 CNBV. 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 2024, unless otherwise noted. And with that, I will turn the call over to Enrique.

Good morning, everyone, and thank you for joining us. To kick off our call today, I will address the current geopolitical environment affecting the North American airline industry and how Volaris remains well positioned to capitalize on long-term sustainable growth in our most valuable markets. This is a result of our team's proven ability to adapt during downturns and accelerate when opportunities arise. we delivered practically in full on our first quarter 2025 guidance despite highly volatile conditions. Holger and Jaime will speak about the strengths that drive our optimism about the future. Over the past three months, political and trade dynamics between the United States and key economic partners, particularly Mexico, have seen ongoing volatility. This has created uncertainty across industries and among consumers, a more cautious outlook. As we mentioned on our previous earnings call, travelers are waiting for greater clarity around border policies, tariffs, and broader economic conditions before making bookings. In response, Volaris has and will continue to adjust capacity to align with evolving consumer behavior. I want to emphasize that Volaris recognizes the Mexican government's rigorous commitment to swiftly addressing issues in the U.S.-Mexico relationship. Managing these matters requires a constructive, forward-looking and bilateral approach, one we fully endorse and view as a positive step toward regional stability. From my personal perspective, Mexico's cautious, responsible, and proactive response to various U.S. initiatives has enabled it to make significant progress on key issues in the bilateral agenda, positioning both the country and Volaris as an appealing investment opportunity. Even in this environment, we continue to see the resilience of the VFR travelers in the Mexican domestic market, where we drove a low factor of 89%. On the international front, our low factor in the U.S. transborder market came in slightly below last year's results. We grew RPMs in both our domestic and international markets, and staying true to our ultra-low-cost carrier model, we proactively implemented competitive pricing strategies to sustain these high occupancy levels while optimizing TRAS. Our consolidated low factors of 85% just on their last year's result, despite markedly different industry conditions, underscores the effectiveness of our approach to capacity management and fare modulation. We remain firmly anchored in our ultra-local carrier value proposition, offering attractive fares, operating a reliable schedule, and expanding high-value ancillary options that enhance the customer experience. On the profitability front, Our first quarter EBITDA margin was within our expectations, reinforcing the strength of our execution and disciplined cost control. Ancillaries continue to be a resilient and strategic contributor, highlighting the relevance to our customers and supporting our diversified revenue model, particularly during periods of base fare pressure. Ancillary revenue once again accounted for over 50% of total quarterly revenue. And this is important, as when combined with our load-based fares, we're able to remain in a sweet spot where we can support market elasticity while attracting passengers to our value-added services. I'd like to recognize the outstanding coordination across our operations, scheduling, and maintenance teams, particularly navigating the industry-wide Pratt & Whitney engine challenge over the past 18 months. The current impact and our mitigation is consistent with our previous disclosure. Our proactive management of aircraft and engine availability has ensured operational continuity and is reflected in our customer satisfaction metrics, including on-time performance of 83.8%, a scheduled completion rate of 99.6%, and a Net Promoter Score of 39%, one of the highest quarterly scores in our history. Looking ahead, the flexibility embedded in our operations cost structure, fleet plan, and variable labor agreements position us to adapt quickly and effectively to market shifts. Additionally, with disciplined management of engine removals, maintenance planning, spare engine deployment, and re-deliveries, all supported by our updated Airbus fleet delivery schedule, we are well equipped to adjust our growth trajectory as needed. Our capacity decisions will remain grounded in two guiding priorities. customer demand, and sustained profitability. Given the evolving dynamics between the U.S. and Mexico, we believe it is both timely and prudent to recalibrate our capacity plan to remain aligned with current demand trends and reaffirm our commitment to discipline and sustainable growth. For full year 2025, we are now targeting ASM growth in the range of 8% to 9%, revised from our original guidance of 13% to 15% growth. This adjustment reflects Volaris' agility and flexible approach to capacity deployment. By moderating growth across our network, including a rationalization in the U.S. transborder market, we expect sequential improvement in trust, particularly during the high-demand second half of the year supporting margins. We view this capacity moderation as a prudent step to navigate current headwinds while protecting profitability. While there is much uncertainty in the market, we know it will prompt many to look at Mexico with fresh eyes, and we see a lot of positives. Volari stands out among North American carriers for its resilience. Our ultra-low cost model, robust liquidity, and healthy balance sheet position us to serve the most resilient customer segment, our VFR base, during economic slowdowns. I am sure You are all asking yourselves what is on my mind as we are navigating recent dislocation and environment I've mentioned. I want to reinforce a few key points. What it really comes down to is that our traffic is materially BFR traffic. Families in Mexico and the U.S. that need to travel to see each other, they're not going back to the buses. And after six months or more of being away from their families, we believe they will start traveling more during the summer. The most important thing is that we gain traction on traffic as fear dissipates. And for the VFR traveler, it always does. So I'm using the playbook we've developed over 20 years throughout many different crises, focusing on preserving cash while prioritizing investments that will ensure we exit this period continuing to lead. It's easy to forget that Volaris snapped back fastest in our industry after COVID. I want to be positioned the same way now. Our flexibility and agility is how we will continue to deliver for our customers and our shareholders. Holger will tell you more about the trends we are seeing and the initiatives we are implementing to ensure passengers continue to choose Volaris. With that, I will now turn the call over to Holger.