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

Good morning, everyone, and thank you for joining Valeris' third quarter 2026 Financial Results Conference call. All lines are currently in a 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.

Welcome to our third 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 Pous. They will be discussing the company's results, followed by a Q&A session. This call is for investor and analyst 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 CMVB. These statements speak only as of the date they are made, and Volaris undertakes No obligation to update or modify them. All figures are in U.S. dollars compared to the third quarter of 2025 unless otherwise noted. And with that, I'll turn the call over to Enrique.

Good morning, everyone, and welcome to our third quarter 2026 earnings call. Despite a challenging environment, we executed against our plan, exceeded our financial guidance, and delivered positive EBIT, an outcome not contemplated in our original outcome. We achieved an EBITDA margin of 25.3% above our 22% guidance, even though jet fuel averaged 3.67 per gallon versus our 350% guidance assumption. Crucially, we preserved strong liquidity, ending September with approximately $823 million, broadly unchanged quarter over quarter despite higher than anticipated fuel prices. The strong operating cash flow and disciplined network management supported this result, with every flight required to generate a positive marginal contribution. At the same time, we continued reducing financial debt, strengthening our balance sheet, and preserving the flexibility to navigate the industry cycle and pursue long-term opportunities. Our strong performance was also reflected in our unit economics. TRASM reached 10.31 cents, up 19% year-over-year and above guidance, driven primarily by stronger fair performance. At the same time, Casmex Fuel came in at 6.23 cents, outperforming our guidance of 6.35 cents. Our underlying cost structure remains well controlled, even as we absorb Thank you very much for your attention. I want to thank our ambassadors for the outstanding teamwork behind this performance. Together, our commercial initiatives offset about 49% of the year-over-year increase in fuel costs through higher revenues helping mitigate the impact of elevated fuel prices. The U.S.-Mexico transborder market plays a particularly important role in this strategy. Because it offers our strongest profitability and greatest ability to recover higher fuel costs through pricing, U.S. legacy carriers have been reducing capacity and raising fares in the market, widening the gap between their offerings and our ultra-low cost fares and further strengthening our value proposition. This is where our ultra-low cost carrier virtue cycle becomes decisive. As competitors pull back, we can redeploy capacity to the markets with the most attractive returns. Our widening fair advantage helps us capture demand, greater scale, and aircraft productivity then reinforce our cost advantage and sustain profitable growth. Let me now connect those strategic choices to the actions behind our performance across the network. Starting with our U.S.-Mexico transborder business, transborder revenues grew by more than 50% year-over-year, supported by our expanding network, stronger brand presence, attractive yields, and healthy capacity absorption, contributing to stronger route-level profitability. Based on published fourth quarter schedules from OAG, Volaris is currently the largest carrier in the U.S.-Mexico transborder market in terms of seats. This leadership position reflects years of network development and brand building, as well as an intentional relocation of capacity toward a market with higher relative profitability. It positions us to continue capturing opportunities in one of the world's most important international aviation corridors. Our Central America-U.S. operations are also performing well, adding further momentum to our international network. Together, these results reinforce the value of the strategic investments we have made in these markets over the past several years, with total network international capacity accounting for approximately 42% of our total capacity in the third quarter. But going forward, International operations are expected to represent approximately 49% of our total capacity in the fourth quarter, the highest level in Volaris' history, marking an important milestone in the evolution of our network and providing a natural exchange rate hedge. In Mexico, we strategically increased domestic capacity by 11% during the third quarter summer peak to capture stronger seasonal demand. The market absorbed that propensity. Peso-denominated base fairs strengthened and domestic low factor reached 88%. Our focus is not simply on filling the seats, but on maximizing the revenue and profitability generated by every seat we fly. Having captured peak summer demand, We have shifted our focus to preserving those unique revenue gains TRASM strengthened in September and that momentum has carried into October as we enter the shoulder season. By adjusting domestic capacity to seasonal demand and expanding our international exposure where yields and fuel cost recovery are strongest. We are sustaining unit revenue performance while protecting profitability. Another important driver of our third quarter performance was our discipline management of aircraft utilization. As more aircraft returned to productive service, utilization increased 5% quarter over quarter, measured We also generated approximately $13 million in fuel cost savings during the quarter, equivalent to 3.3 million gallons of fuel saved through initiatives aimed at improving operational efficiency. Fuel efficiency reached 110 ASMs per gallon, a Volaris record and among the highest level for narrow-body operators. These gains came from deploying more fuel-efficient new aircraft, particularly on longer international routes, improving aircraft to route assignments, and strengthening flight planning. While these operational improvements are delivering benefits today, Our fleet transformation is creating an opportunity to structurally improve our cost base. Our GTF recovery continues to advance. We are now well past the peak of this disruption. As engines continue to rotate through scheduled shop visits, we expect AOGs to remain in the low to mid-20s until next summer, with the situation expected to normalize by mid-2028. As we right-size our contractual fleet from 154 aircraft at the end of the third quarter of 2026 to approximately 137 by year end 2027, we expect to reduce lease liabilities by approximately $360 million relative to the third quarter 2026 level, equivalent to 10% of total debt at quarter end. We also expect approximately 50 million dollars in lease savings in 2027 compared with full year 2026, improving earnings and free cash flow. This represents a significant structural improvement to our cost base and balance sheet by reducing fleet related debt. At the same time, we are taking other actions to enhance our financial flexibility. In addition, To maintaining a stable cash position versus the second quarter, we have secured a $300 million revolving credit facility. As Jaime will discuss in greater detail, this facility provides additional financial flexibility and strengthens our access to institutional capital. Finally, I would like to update you on Mexico's Aviation Safety Oversight Assessment. On October 16, the U.S. Department of Transportation revoked orders issued in October 2025 that had disapproved certain schedules filed by Mexican carriers and restricted flights from the Mexico City metropolitan area to the United States. Although the orders had limited impact on Volaris' existing operations, Their revocation now allows Mexican carriers to continue expanding capacity from the metropolitan area, something really important given the strategy that we followed in the capacity in the United States. Turning to the FAA's ongoing IAS assessment, we believe the risk of Mexico being downgraded again has been significantly mitigated. The Mexican government has announced concrete measures to strengthen a FACS These developments concern Mexico's broader regulatory oversight framework rather than Volaris' individual operating performance. Even so, they matter to the entire aviation industry and we support the Mexican authorities' efforts to address the bilateral issues and the FAA's observations While preserving the conditions for continual connectivity, growth, and safety. As we conclude, I want to emphasize that our third quarter performance represents more than a successful summer season. It demonstrates our ability to execute in a challenging environment, to make disciplined commercial decisions, and to translate those decisions into tangible, Financial results, but perhaps more noteworthy, we are progressively transforming the underlying economics of Volaris. We're building a network increasingly focused on markets where our competitive advantages are strongest. We're improving productivity across our fleet, and as the GTF recovery progresses, We are creating the opportunity to operate more efficiently with fewer contractual aircraft and lower structural ownership costs. As we look toward 2027, our focus remains clear. Protect our financial strength, continue improving our structural cost position and convert our competitive advantages into sustainable, profitable and long-term shareholder value. With that, In this strategic context, I will turn the call over to Holger to discuss how our commercial execution, network allocation, and customer strategy are translating into stronger unit economics.