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

Good morning, everyone, and thank you for joining Valeris' first quarter 2026 Financial Results Conference call. All lines are currently in listen-only mode. After the company's remarks, we'll open the call for questions. Please note that today's event is being recorded and webcast live on Valeris' website. At this time, I'd like to turn the call over to Liliana Juarez, Investor Relations Manager. Please go ahead, Liliana. Liliana.

Welcome to our first quarter 2026 earnings call. Joining us today are our president and CEO, Enrique Beltranena, our airline executive vice president, Holger Blankenstein, and our CFO, Jaime Puls. They will be discussing the company's results, followed by a Q&A session. This call is for investors and analysts only. Please note that this call may include forward-looking statements on their applicable securities laws. These are subject to several factors that could cause the company's results to differ materially, as described in our filings with the U.S. SEC and Mexico's CNBV. These statements speak only of the date they are made, and Volaris undertakes no obligation to update or modify them. All figures are in US dollars and compared to the first quarter of 2025, unless otherwise noted. And with that, I'll turn the call over to Enrique.

Good morning, everyone, and welcome to our first quarter 2026 earnings call. We entered 2026. with a clear set of priorities, discipline growth, continual enhancement of revenue quality through segmentation across pricing, ancillaries, and network, and active fleet management through peak GTF engine repairs, all while preserving our low-complexity, low-cost model. Against the backdrop of global geopolitical events and higher fuel prices, these priorities remain unchanged, but we are adapting our execution. We are responding with agility and discipline, aligning capacity with demand, focusing on profitable flying and preserving cash. On the commercial side, we are executing targeted fare and ancillary adjustments, carefully calibrated to demand conditions to maintain a balanced approach between pricing and volumes. We're actively accelerating pricing actions resulting in fair improvement of about 10% with several steps across our network, alongside with about 20% increases in selected ancillary pros. We'll continue to progressively optimize these actions as we assess demand elasticity across different markets during the quarter. We expect TRASM to increase by about 22% year-over-year in the second quarter. Importantly, demand remains resilient to these actions across the network and we are seeing a faster than historical ability to recapture fuel through pricing supported by a more disciplined industry environment. As pricing actions are reflected in an improvement in our revenue performance, and given Volari's booking curves, we expect to recapture, on average, approximately 20% to 30% of incremental fuel costs in the second quarter. From a capacity management perspective, we are prioritizing cash preservation by ensuring that our network covers variable costs. We are maintaining full flexibility to adjust capacity as conditions evolve, with actions primarily focused on the domestic market as international markets continue to demonstrate stronger pricing absorption. We are adjusting schedules on an ongoing basis in response to fuel conditions and demand. More specifically, We are managing schedules dynamically through a rolling 6-8 week planning horizon while maintaining a strong focus on customer experience and network integrity. At the same time, we are improving fuel efficiency through fleet mix in line with our plan to return GTF engines to service. We are seeing a higher proportion of NEO aircraft in operation, and we estimate that for every 10 aircraft shifted from CEOS to NEOs, we generate roughly $2 million in monthly fuel savings at current fuel price levels. For the full year 2026, we now expect ASM growth of approximately 4%, down from our original guidance of around 7%, reflecting the capacity adjustments made to date and our approach to cash preservation in the current environment. Importantly, this remains dynamic and we retain flexibility to adjust further as conditions evolve, with actions primarily concentrated in the domestic market while international markets continue to demonstrate stronger pricing absorption. Now, turning to our first quarter top-line results, they reflect strong execution. We deliver resilient performance, supported by disciplined capacity deployment, improving yields and mix, and cost control in line with our guidance. In the quarter, demand remained robust across our network, with continuous sequential improvement in the cross-border segment and stable trends in the domestic market. Combined with solid ancillary performance, this drove results that reinforced the strength of our model and the relevance of our offering, even in a more challenging environment marked by steeply higher fuel prices and increased global uncertainty beginning in late February. During the quarter, we focused on recovering volumes across our segments while improving revenue quality. As a result, we delivered TRASM of 8.62 cents, up 11% year-over-year. This performance was supported by a 10% increase in base fare and continued improvement in revenue mix annually. with ancillaries reaching 57% of total operating revenues, reinforcing our ability to drive sustained revenue performance while maintaining flexibility. At the same time, we kept CASM ex-fuel in line with plan at $0.604 and closed the quarter with an EBITDA margin of 22.9%. This result gained 2 percentage points below our first quarter guidance, driven by a more challenging fuel environment, with Gulf Coast jet fuel averaging 2.56 per gallon, compared to 2.20 assumed in our February guidance, an increase of around 16%. Our balance sheet remains strong. with a healthy cash position of $766 million, representing 24% of the last 12 months' revenues and only $8 million below the prior quarter. Net leverage stood at 3.2 times, providing flexibility to navigate the current environment while continuing to execute our priorities. Our experience over the past two and a half years navigating the GTF engine uncertainty has given us the capability to quickly flex capacity to align with demand and support profitability. Today our diversified network and stronger dollarized revenue profile with over 40% exposure to higher yielding trans-border markets support greater resilience. While we are focused on navigating the current environment, we are also positioning the business for medium-term value creation supported by a fleet strategy anchored on three principles. Discipline growth, prudent capital allocation, clear value creation. Starting with growth, we are confident we have the right model in the right markets to grow sustainably and profitably in line with demand, not ahead of it. Our capacity outlook remains intentionally disciplined, with growth primarily driven by improving fleet productivity rather than by adding incremental aircraft. As a result, our contractual fleet will decline from 155 aircraft in December 2025 to roughly 137 by the year end of 2027, while our productive revenue generating fleet increases to approximately 125 aircraft up from 112 at the end of 2025. This transition unlocks meaningful efficiency gains including around $50 million in annual lease savings and a reduction of roughly $360 million in lease liabilities by 2027, while at the same time increasing our revenue-generating capacity. On capital allocation, we are prioritizing investments that deliver long-term returns while maintaining flexibility around future fleet commitments. To that end, most 2027 and 2028 deliveries have been rescheduled and no incremental aircraft investment will be made until the GTF advantage engines enter into service. Ultimately, the most powerful value creation lever over the next several years is restoring fleet productivity, reducing aircraft ownership costs and improving our conversion from EBITDA to EBIT, translating directly into stronger free cash flow generation and return on investment capital. In short, we are executing with this discipline in the near term, while positioning the business for meaningful long-term value creation. We remain confident in our ability to navigate this environment and will continue to prioritize profitability over growth. While today's demand trends remain solid, our model is designed for flexibility that the current geopolitical environment requires. With that, I will turn the call over to Jorge to discuss our commercial and operational performance. Thank you, Enrique.