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Controladora Vuela Cia De Aviacion (VLRS)

Participants
Maria Elena Rodriguez Corporate Financing, & Investor Relations Director
Enrique Beltranena President & Chief Executive Officer
Holger Blankenstein Executive Vice President, Airline
Jaime Pous Chief Financial Officer
Helane Becker Cowen
Josh Milberg Morgan Stanley
Mike Linenberg Deutsche Bank
Duane Pfennigwerth Evercore ISI
Pablo Monsivais Barclays
Roberta Versiani Citibank
Call transcript
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Operator

Good morning, everyone. Thank you for standing by. Welcome to Volaris Second 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. ask will to that provided how time. on a be question at Instructions this recorded. is note event Please that, being This event is and maybe also being broadcast through Volaris live the website. accessed via webcast their finished. questions will after Investor answered presentation webcast via during Those management by Relations the be the by the following their may team call either the or post and platform questions the the is either -- conference on Volaris the question your need send just your left the via video click in below mark To the area webcast platform, the to corner on you and question. questions the upper type in At this over like turn to the point, call I would Ms. to Maria Elena Director. Investor Rodriguez, Relations Volaris' Maria ahead, go Please Elena.

Maria Elena Rodriguez

Beltranena; company's and will the Please be we joining move taken will Officer, be analysts questions. on Good call. President individual today They XXXX With our morning, our basis. your Jaime and Vice the Pous. us Enrique investors media our Airline only. Holger to President, Chief this and everyone, Executive you for Financial Afterwards, second on Blankenstein; quarter for the an is from is questions Any discussing CEO, thank that will note results. call and

please within call that remind me include forward-looking securities may statements begin, everyone we the Before applicable let of meaning this laws.

is second will of XXXX President my results to subject and to pleasure turn Nacional Volaris' better the our to provide call XXXX. performance the results undertakes forward-looking company. publicly instead to the Volaris to company's are We are of filings and U.S. we Enrique de quarter several release, to It statements with Beltranena. obligation to for Similar this Commission, to the press of of CEO, cause the operating described over y revise actual could Comisión the in update Forward-looking and comparison and Valores. any differ factors no now financial a expectations the Mr. company's believe that statements. reasons materially from Bancaria comparing quarter Securities or Furthermore, the the Exchange second

Enrique Beltranena

in Elena. would everyone Maria airports much, have ambassadors begin very months, responded challenges, I results. by also for Volaris With by a Thanks to you its demand, its by maintaining us today. cost travel all operations, past joining has strengthening not its rewarded growing the to structure. that to with airports recovery increasing over Thank only capacity while ultra-low been thanking solid all their Volaris like but

can the most recovery, would affirm leading This has second that for industry’s I airline quarter, the important and milestones quarter. we the highlight to once again, been Volaris like

delivered Mexican ASMs company quarter First, industry demand. expansion, capacity of higher the recovery Volaris healthy XX% than airline in demand The led air take to the full advantage continues second of rebound in and the travel has XXXX.

to leverage results and lower better and publicly Our translated higher CASM been trade the capacity among has strategic, peers. expansion TRASM,

Second, strategically the versus strong We revenue deploy market as to fast in demand, to to due Volaris capacity, ability healthy higher factors unit double-digit achieved TRASM growth adapt acknowledge its XXXX has per new this operations expansion with to of stronger that passenger. load circumstances and XX% back and left Mexican to been which equilibrium. comes void fueled partially market to allowed levels stabilize for we unprecedented and us capacity TRASM budgeting by pent-up are recovery, a and

and ability come second throughout to margin of and million result a deferred payable almost the delivered the guidance to which the cash quarter Volaris' our in second to second per Volaris a for rentals. of around sales turn due out improvement company, Third, stronger the any for was compared EBITDAR of naturally of a margin testament despite is accounts was generation in to the and doubled quarter. Four, EBITDAR such which revised sequential reduction expansion expansion controls. quarter and XX%, material EBITDAR to led the above in tight and XXXX a strong day, cash Volaris margin a growth highest Ps.X.X the generation, strong of $X.X TRASM quarter in of the crisis. represented billion history

$XXX had As operating Volaris the of days cash last, growth and Xth is June cash XX, equivalents represents which plans. million, outlook for point of Volaris' At expense. expansion XXX of and

pre-COVID utilization. very for balance to and has incorporate growth As the has XX sheet, recovered cycle. the regional In Mexican operations America. a company to and We're plan. my our solid aircraft cost mainly which company a XX consolidated also it places of will I operationally productive market domestic the position fleet on next remarks, maintaining strong to financially highly The in position planned and 'XX frequency aircraft in Central growth lowest its increase such the closing are planning new into months, elaborate to our levels, in fleet in the flights strengthen

will Given results, find be challenging world. financial operational our to aviation anywhere It are similar in a with another the performance in strong the global we airline industry. and the leading recovery

to Finally, all how truly Airline I’d very I results, much. ability Vice to to turn like to now best-in-class. Volaris our deliver are you call highlight ambassadors. want Thank strong Executive to you over I Thank the team's am our Holger of discuss our which President, proud again operations. Blankenstein, to

Holger Blankenstein

to to In same for rollout infections we XXXX. XX% recovery markets, more ramping quarter, the the market following our as and U.S. a right travel. U.S. Thank Volaris of quarter quarter operated weak The up capacity the than more had the international vaccination recovery, ASMs wave confidence effective Mexico saw strong continued second quickly contribute we the in you, due second capacity first in and of and the Enrique. in a was COVID-XX

ASMs XXXX. Mexico recovered slower destinations XX% quarter within same XXXX the of also well, especially figures. compared leisure to reached quarter On the were capacity second compared and domestic the and Central higher was to progress front, in American ASMs XX% of

flights in the fourth the solidifying core markets selling to on presence launch Going routes our as will focus of We forward, Guadalajara. in while and and started already capacity increases City of Colombia domestic and June, itineraries. quarter, have Tijuana plan to those Mexico also

presence market late biggest quarter revenue VFR of the enable to El El rights third American Central complement on take and rebuilding important TRASM improved to Rica at to left route generate from markets a diversify more importantly, and U.S. advantage by the to XX% region. U.S. are while main Salvador improved weaker take mostly our competitors operating the increase XXXX, an solid We costs; environment. in our maintaining the TRASM in of us Ps.XXX very Growth opportunities the track launch in base, Mexican quarter for the Costa the second was increasingly and and Central solidifying the same revenues, markets. over advantage to presence by our is driven in U.S. the America network fare of Salvador, low dollar-denominated Volaris maintaining by VFR Mexican period load high cents, factors,

levels were better ancillary revenue period in XXXX. accompanied fares higher same addition, by of In than the

For the pressure markets. the competition. and the same This quarter represents as year, XXXX are XX% per versus of competitive That sales strong Ancillaries increases little, a levels forecast industry. record revenues. as structure in third quarter And XX% XXXX. Volaris pressure and capacity the might lowest and of new of market beyond reached fare to the demand ancillary our are positioned a growth we in said, experience air with some continue well cost passenger. most one network of deal our no fares healthy the face at operating costs to routes Ps.XXX recovers,

As the quarter versus base of sales to XXXX the first increased ancillary percentage XX%. the of quarter, during revenues decreased

and with bundles ancillary its fine-tuned which Mexico flexibility geared Volaris enterprises, City. our medium-sized combo presence is business new quarter, by more the small and attracting supported a stronger During strategy, a a combo in towards

of to continue We ancillary excited dynamic be about products. pricing

there further of potential throughout the strategy, that advanced have XXXX. XXXX is and We implementation and

flight and redesigned more activities XX% and in disruptions U.S. in with business-oriented May. emerge we Recovery and their the vaccination after Mexico. opportunities Mexicans respectively. and The enable In tourism leisure, domestic advantage In to My demand travelers is volaris.com, key of well still states. the recovered a behind the quarter April visiting routes strong And Booking changes domestic load section travel second also friends booking. months-long destinations. from U.S. their market, once have Easter seeing transborder into of to XX%, market, market, are consumer. the to a remittances on travel in during the although advanced demand. in rebound mostly pre-pandemic the We had in the are the which customers A in of in beach was purchases the population to medical and it personalized demand supporting exceptionally heritage levels international reached rollout continuing has We again in rebound Mexican as indication Demand the factors have taking focused of both is a season even that quarter, Mexican to record products families market is Mexican where no-shows, Mexico experienced levels. continues normalization the VFR Manage offer strong, traffic us our recently further back is and and habits. will Also, to are lives

the continue bookings summer Further which for is lower in still are term, season. and the Looking high quarter, observe the short ahead we somewhat into out third into September than to quarter fourth sales XXXX. strong

those we helped that demand were launched a by periods. to lately, promotions have in seen positive recovery incentivize However,

curve and the the levels. Looking forward, we by are booking fare encouraged current

track, the half we Mexico closely quickly the of for Although second more are variants. required. vaccination in if markets Volaris cases surge the flexibility demand react ramp A progress to down is on and observing contagious shift also given capacity and has in is COVID-XX region, a or the risk new, XXXX. our in of new cases

is travelers. One to bus of our pillars capturing share growth market increase by of

reason provides about to also not buses. but a with travelers business think industry, they the only instead with ULCC way the transformed transformed Our COVID-XX our our of customers compelling and it’s Volaris model traveling. travel

travel during air clearly Mexican travelers their off. from efforts hygiene key drivers. the sight to Our are protocols, Customers switch low decision to time and as fares paying bus pandemic

devices to bookings to the This bus adoption pandemic, enables and to faster us the middle emerging out the mobile adoption and was class e-commerce accelerated. During switchers. shifted reach

aircraft XXXX. we aggressive the at strategy end As continue the At and of end aircraft of the performance. XX second of XX Enrique the of strong of an to compared period growth we mentioned, a will same quarter, fleet had operational

aircraft of per one world. utilization as is In model. turns per high the the similar of day, of XXX,XXX type with in addition, This company main airline pillars and of aircraft Volaris ultra-low-cost positions the highest one our size which utilization the achieved

history first control eighth consecutive recertification control and administration or an dispatch the Mexico, flight second and Rica. was XX,XXX quarter, security, done El at of This in operations, Mexico more Audit, flight flight United has ground segments control considers continue maintenance Costa the for and corporate requirements standards. non-controllable Salvador. on performance to handling Safety level, following the and safety the commitment XX Volaris and over IOSA weather achieve with and traffic IOSA, other comply engineering, After recertification working will operations, related Volaris aircraft to and During States, the stations a delays. Volaris IATA Costa different control, Volaris the activities air our XX% The attendants, and among completing to safety like to of the the operations quality Volaris flew than airline’s highest on-time in the Rica, over Guatemala safety. permanent and despite area: XXX cargo with systems factors in Operational

Financial discuss quarter. Chief would our I to financial the to Pous, for over Jaime the like Now, Officer, to the turn performance call

Jaime Pous

result maintenance the costs. versus were was quarter due highlight second cents industry. second lowest costs operating the The per percentage quarter Ps.X.X increased for an margin the delivery the net were same one margin XXXX, quarter second revenue. points its delivering margin cents as totaled expenses. closing ADS Thank the quarter highest Net US$X.XX. history. primarily and throughout the of ex-fuel jet EBITDA to EBITDAR decreased quarter XX.X results fuel at our of of excited of compared ticket am X% billion, commitment to Total Ps.X.XX of versus company by lower earnings revenues a reported strong financial higher closing you, for the share Ps.XX.X at second XX% second global X% per US$X.XX increase income higher and second continues the the quarter CASM discuss XXXX. financial Holger. the billion, in was margin XX.X%, by performance period billion Earnings US$X.XX XX.X%. Ps.X.X in margin from by CASM the representing for quarter XXXX, was company's in to the and Total unit aviation for our of the the and EBITDAR the This second quarter to second of quarter driven higher XXXX, metrics. was in I XX% the a and ancillaries

of improvement of the delivered second past day, revised than the Volaris per high quarter, guidance, posting For the higher the a significant sequential of XX% end $X.X cash our quarters. generation X -- over a million

quarter, the the million the budgeting $X.X quarter For third third Historically, cash to generally are in we day. range per $X of consumes generation million cash.

of magnitude cash the this So exciting generation company. is for

activities and sale For the revenues budgeting The billion, other be improved activities operating flow engine total TRASM generated quarter. during leaseback expenses Ps.XXX and and million gain due and increase and net third Ps.X financing million million in aircraft cash investing flow by we to and quarter, accounted billion was operating $XX in the around respectively. Cash in are in Ps.X.X were operating used to rent as $X.X income.

the of June the of XX of quarter, equivalents our Of $XXX has accrued XXXX, among of liability second reported similar in of And total The a second operating again, our were million, quarter, lessors pre-pandemic outstanding. of recognized end Volaris OpEx net Latin of billion. revenue. Ps.X.X At to thank services the representing of goods of second has lease of excluding XXXX. carriers. back And and received to the company in cash the placed and suppliers, all liabilities equity last Once the XX days Ps.XX.X balance million capital to $XX level strongest debt-to-EBITDA the the the American the net under XX XX, end of during have negative the registered and was billion, sheets IFRS equivalent relief on suppliers especially adoption. the a or $XXX company. As Ps.X.X were quarter levels. want company billion one trust I only cash months’ XX% million their by our debt adjusted X.Xx, as who the working ratio

we in our fleet during Following even this, the the will XXXX, further we schedule performance stronger-than-expected the Volaris' the productivity ASM capacity on current of improve third and or utilization. increase expect half first to With maintain is to COVID-XX quarter to -- Considering same not the be guidance variants, the the in versus XX% the third range quarter. providing XXXX. quarter to impact of uncertainty beyond the of XX% related in demand of company the tighten

the of a XX% invest quarter, This an revenues EBITDAR material Xs. range third a and position of XX% the other the is For pandemic margin in budgeting to assumes around cash months' related company percentage in or as mid no last disruptions. XX

I will remarks. Enrique for it back closing pass Now, to

Enrique Beltranena

operational the very committed financial goals. you The results years, Jaime. results deliver upcoming but much, corporate in also and only social is pursue on to based not Thank company and environmental, to sustainable the governance

These commitment sustainable people We on goals XX% the that United integrated profit our the our planet have have as and kilometer development XPs strategy: commitment and recently integrated for shareholders established we In issued to in aligned fuel order with objectives. our report the carbon the emissions, business our passenger the a Nations such care, to are to goals on achieve care. the reduction jet annual decrease XXXX, that first XX% reflects our focused and care are consumption objectives XXXX. a versus environment, ambitious revenue of reinforce

growth of Volaris methodology. spend practices the Total & talking plan the of the This best the would like & Mexico received the XX Standard XXXX, a Standard minutes June In time. comprised few in for and about with index Mexican first Mexican the I according to the Poor's is company. companies Bolsa addition, Poor's to public membership Index ESG the of ESG

cost has few very on the markets hard For returned when continent. the and The our lowest becoming in years, Volaris worked last left the void quickly. operator pandemic a has demand

year working AXXXneo result, to We're been months, is XX reasonable carriers new this company the witnessing a has Let is with detailed best-in-class market company's me today. As discussed business the the opportunities with model. the aligned closing Mexicana over our in XXX TRASM? the will plan. planning to remind question less are XXXX to by year-end a finishing aircraft. incorporate and and a next what percentage strategy. worldwide can and Volaris is sheet, aircraft without sustainability recovery analyzed grow XXXX of operations increase ultra-low-cost than This remains, on and we today that exactly expansion leverage AXXXneo we aircraft This family continue happened year. by with with among the XXX opportunities this a in you expanding how XX% ceased road after solid XX successful the with capitalizing family well aircraft balance fast The

to our in target the We most strongest our in will campaign capacity markets continue and building leisure to focus attractive develop on continue travelers, cities, presence additional bus increases switch market opportunities.

short Moreover, while protocols. required the reduce enormous and time successful an service training to board through the plan, our planes To use we're to initiatives on going begin with placing check term safety the ethical and plan to model. their biosecurity expand maintaining South and certificates to standards. our required in ambitious within personnel. customer the plan, and ultra-low-cost and operations, under our are Salvador with share America cultural ambassadors growth Volaris to same our hiring we who Northern has Central of Volaris training carrier business for In related In America activities operational addition, will hired footprint over all focus we perform of can Costa our preparation expand technology and our XXX underway, El they in in so are values. strict including Rica this of they this be all the technical presence duties

can model Volaris demonstrated superior deliver have yet the results. that is business and again sound We

the a in themselves and have market. in crisis the come we stronger Our succeed team out better the taken opportunities that and has position to from presented

room per you now Operator, terms much are one Please revenue the with thank grow We and most the of passenger. open worldwide, airlines very listening. profitable in to more for of questions. line geographically for

Operator

[Operator Instructions].

Our with from first is Cowen. Helane Becker question

Helane Becker

passenger? say your ancillary can high can per thinking how go Holger, you revenues

Holger Blankenstein

Helane, you. thank

continuing on about to total build achieved portfolio working are products. have operating ancillary We now of XX% of revenues. our we And

mark. to an are in getting future. a of working value line $XX beyond and absolute sight And the near XX% have the to on of We we

products medium-sized some introduced also of portfolio. some So building we are the Number on products. and business example, for enterprises, our X small, towards things. new combo insurance is pricing market, one doing towards We've new exciting flexibility, product dynamic working geared those We're ancillaries.

we intelligence artificial right to us ancillaries product one to time. the And travelers, would certain that So VFR helps the right price that third groups, offer travelers, then have at customers customer personalize the travelers. be business to the the we leisure ancillary

that So towards the all-in-all, XX% us take mark, Helane. should

Helane Becker

growing Got you. is And don't That's very on, if and -- follow-up Enrique helpful. answer. Thanks, question my you're to I as about answer this or Holger. to know thinking you if want then wants

I you those. I can you them? You any with and pick one you Mexico, cost think Aeromexico, of guess grow been you've Interjet’s fares As they growing Chapter bankruptcy answer capacity obviously, from from within want about or are I big a and there's versus your you're thinking that had or emerge don't how to to and thinking about how versus know big own benefit when respect as a either to with XX about competing them markets benefit think Aeromexico or new how footprint? -- you

Enrique Beltranena

So a me let it. very answer try Helane, broad question, to it's but

okay? in we positioning at Mexico a definitely first year, And be be I first of allocation say Airport. and ASMs of into we'll what the head-to-head City to especially lot directly of City, would the it's them. that's going be number the flying, of good answer, will with competing We’re Mexico a capacity

going carrier. Second thing, continues important, it's I forward being think Volaris an ultra-low-cost

be us allows to will prices position drastically very effective very, competing City. in very at cost a Our price and way very, Mexico on we

we costs. to is our you per if XXXX, say lower which levels to in but bit still are returns than far especially important is, our lower probably at is, seat by away them. we the really cost point of think available important difference strongly we the at Aeromexico there's to would basically that total levels model the managing back way third the take in mile aircrafts be, The ancillary of an of the improve versus way them. is to a terms that versus they used really I we that's and that pricing revenue And our available compete will effective that good. is in allow more per last very part, seat cost, effective us subsidiary levels a use with think We model. the can for strategy that And come our will we mile are competing little

Operator

Stanley. The next Milberg Josh Morgan from with question is

Josh Milberg

XX first My aircraft. follow-up on your question growth a of is somewhat on just plan the

had on in have those could past on their highlighted just the aggregate how the your in think give could between serve. And competitors your but updated context, how evolving? those If to just obviously sense market you something you situation. broader expectations allocate I to I in than markets that's if by the also then make fleet more a you entire cut you fleet fluid you XX%, see additions that's you just comment aircraft that of expect the Mexican market Mexican know

Holger Blankenstein

you. Josh, yes, thank

this is pre-COVID going Pacific Guadalajara demand the fortify that back in International as levels. in also biggest America Central the pre-COVID aircraft use that capacity be the where and grows to just Central the which America. the Northwest of then used some and that around of terms Airport, we capacity gap capacity we're in that in We're we going that versus finally, City to fleet Mexico levels the comes into see some are secondary cities and of of to our Mexico, of of the Coast to stated position there. Pacific past most to the is adding capacity And to also Tijuana, put year, going So some have we in

Aeromexico in now. That year. this market the December We capacity in as aircraft. an right fleet to XXX Viva also increase, going We know represents to close at well. We're that are capacity obviously, are and the adding adding fleet

the months aircraft capacity We are next a as the foreseeing of XX around market XX in growth whole. in

market equilibrium is domestic also but capacity is into in demand and the back back. market coming So coming strong between an Mexican transborder,

Josh Milberg

big you, unit you response, the Thanks I think contributed for go, your the did then Holger. quarter? ask those also strength indications ancillary of about think how in have very if a that And to of effect expect you offering type just one the highlight on heard if to with you but I products where wanted little was normalizing the to And products give on if for think, wondered eventually the could Can wanted a your impact you a detailed also vaccine little of, this that And could weaken you I flexibility, factors things getting I greater boost. period. also just And little is a in for demand I some further us tourism. to this revenue issue I bit. I did -- -- can quantify but you comment side, it the

Holger Blankenstein

Josh. Yes. Thanks,

quarter, vaccinations into we third the total to the the In around in third quarter, June capacity. tourism X% as advanced move vaccination we Mexico and April makes effect of especially U.S. in quarter, very has to of May, the see and only in a vaccine small our Texas up of Texas. So capacity, second the tourism, But been have certainly, reduced. percentage did and

in this market domestic demand the lead though the not in market was the reduction network. in TRASM in vaccine did to a a even there transborder However, or our reduction and tourism, in

into business So to in markets, healthy markets, especially the June market recovery U.S. TRASM the broad-based and even and VFR, in and Unit third and in all quarter. domestic demand our going in saw core revenues a leisure

So solely we tourism. broad-based in It cannot -- of increase a was the much second more quarter attribute the recovery. more TRASM to vaccine

of the TRASM combos. And customer products certainly seen quarter. insurance the flexibility and regarding we've ancillaries, on certain recovery that's So in uptake second

and We And attributes have business performance we travel small as City, products bundled which focus, a certainly that product, again for from crisis and the certain will in forward. for believe see COVID example, combos, a the other to have more emerges strong which we enterprises. the together ancillary Business continue presence we medium-sized business going of has introduced Mexico

Operator

The Bank. from question Mike is Linenberg with Deutsche next

Mike Linenberg

have you're margin I great has I At Yes, generating Are we get results Or makes more north of to the to its much and sheet. where a future? sort airplanes. the on to all actually. so you're around you put here. Volaris historically, balance the cash a that what EBITDA of guiding buy just you're move that that and of and it point cash leased now middleman couple generating sense for a guess a Jaime, airplanes do them that point lot point? is XX% at in cash, not-too-distant

Jaime Pous

in believe year, we We are not that point, this neither not the one. next

Enrique Beltranena

the in of mean did possibility are contract building possibility I we months, we're especially building lease astonishing the in absolutely of financially that aircrafts. sale you factors last or in me, the getting XX rate of Michael. X aircraft allow the If which still purchasing purchasing terms

don’t see I next So us year that. doing for reason any for

Mike Linenberg

factors Anyway, question up here. I'm another offline, fantastic. those rate lease That's just And kidding. on can We catch

does of Jaime, the despite out, increase pointed the cost, on like, the of it decent Just in look redelivery airplanes. unit you you the -- maintenance as talked capacity and about face growth,

tight As meaningfully ramp XX% into Enrique, ready quarter, a that the does targeting ambassadors. pretty third up getting like now to we capacity on unit XX% hiring you growth it XXX moderation with you're to here? or some capacity fact growth, the sound we I side cost think, phase move do into up about the get talked

going cost. some upfront to there's like look be does it so And

least So like quarters about growth, over trajectory, cost at also we next upfront unit how it trajectory, where but the costs. above-average have should you you above-average think several cost have ramp-up the the looks

Jaime Pous

for year. per the same $X.XXX this the of the dollar quarter, around in the In of Michael, remaining levels

Mike Linenberg

new just lastly, the then upgauging And service pairs city you as restriction, are this you some to some think U.S., to or of the whether Fantastic. for about add allowed it's CAT plans Okay. II maybe still your latter into year, part that's or market half that into to XXXX/ CAT you your whether getting going back in at add And what ability U.S. II going may have the the the is I'm restriction to additional of seats prior the hinder not filed place? to

Enrique Beltranena

next manage the planned in have we XX aircraft capacity. the U.S., in what our the So needed as is XX OpSpecs and that the have AXXXs use and have XX do to aircraft do not We answer operate for with U.S. either today we and the for playing limitation any months AXXXs registered our into

Operator

Pfennigwerth is question ISI. next Duane Evercore with from The

Duane Pfennigwerth

this the trained was those words, congratulations X never to never I on to make "Hey, I morning to echo have utter the in exception an says, quarter." but Mike's this I guys, call you. to business great literally that So be

Enrique Beltranena

very Thank you Duane. much,

Duane Pfennigwerth

coming versus in, turned in? how off boy, it And much quarter, through closed yields what concern way book talk don't published advanced let's right? chatter just listen, progression into the that that quarter, was XQ like think international? a saw there coming advanced if was this into they of book about versus talk yields, down. whoever could the one looked out? But created And about the kind about know that you if lot XQ, the maybe competitor of I some was like yield yields ahead the it a of actually how was was ever close of Because So domestic I yields all being notes of base. that. you Because was all

Holger Blankenstein

Well, of and season certainly, a the quarter. we of May lot did April after in high in started second really It the Duane, Semana Santa. yes, demand last-minute quite see

what the We sales this recovery seen continue for see a in very last-minute And advanced purchase. quarters forward, quarter. is of to strong we've going then

for of been has high the that working demand, there, a diligently But and the seasonal, to of lot quarter, still build base for slightly demand, that load really pushing been So nicely. third fourth now very quarter to a especially which stimulation levels. we been for far-out are which coming has promotions lot behind factor build is we've of XXXX along the

quite certainly well we positioned booking for competed the some some back As the we might right deal but quarter fare see quarter into the And the higher, in more we third comes into look third to are that. now. market and with costs markets, healthy emerging the of equilibrium, pressure go

Duane Pfennigwerth

I Okay. in dynamic? Were you more to you you say strength? an spilling domestic but past, could where aircraft? more June? yield just closing Was play used Where guess you have that or about the back were traffic not surprised international would a

Holger Blankenstein

it was No, in certainly, all It a was broad-based recovery. markets.

think I saw Guadalajara, was the to our Tijuana very in strong came cities we broad-based U.S. demand was traffic It leisure in nicely. domestic market. and but demand strong that in the surprise. also back very, VFR that so

Duane Pfennigwerth

Yes.

detail and the on said your release, payments. appreciate the supplier at Okay. And then remaining or metrics point. cleaned deferred you as any well Mexico? this in competitors have in deferred primary in the basically Do about payables payments you your comments limited up I all for It's

Jaime Pous

play. to what will the You the get second need report during this half and number accomplished year, But until wait you. they the quarter those amazing we I it's to and think of first

million] year, generating [$XXX second we're than the I million] level during that quarter. it's from achievement we cash that of also consider think an the more obtained last in [$XX and relief the having excellent Just

Operator

next question The is Instructions]. Pablo from Monsivais [Operator Barclays. with

Pablo Monsivais

Congrats on results. the

level and we're sustainable ability see delivery XXXX, of be, current XX-ish you which X growth second beyond Just XX%, level pace travel air -- extends you lower pretty the already XXXX, is by, the percent how be? next think would excluding margin say, a after your to XXXX, my about expecting think that to of margins is years, Do thinking cost, high high? perhaps XX% if taking the question are you do growth or your your annum? that And imply XX% do that can that per able grow to you the to demand capacity cover to X

Enrique Beltranena

answer me related So question, let first with your which is capacity.

I is think we're the this left of what half over gap of filling that first competitors. next and the year capacity doing was of by for year the some basically the

of When see sense, that fourth coming next it So capacity quarters next logical explanation and way similar of to it Down it's clearly, seeing, And and of road, linear back high, comes is see has the the ASMs a rest we given that mean aligning we high. still XXXX in great trends, for did the a year we still high being back is think the and margin, the from TRASM competitors, I to are more out are I we XXXX. all during for we Holger what the but and which we the growing in capacity quarter year when in terms year. much of a this ourselves to that a see the okay? out, growth of bit see little high, in year

than little expecting seeing levels right we we're be not So margins to a at better are now. those that XXXX, but the bit

Pablo Monsivais

at to that. do -- and right this, Or -- derail will that risk now it, might you And If on at know capacity forward the seeing is growing don't take that to City perhaps [perfect up pace]? what have keep fast perhaps constraints you we follow just I Mexico Airport? foresee you that XXXX we're any XXXX,

Enrique Beltranena

way, the will do the little the the still It's continue quarters the only we speculating really on But okay. and and rational same I'd way, that to the continue we bit the brakes it what the world, inevitably think saturated the down Pablo, demand, matter of way in okay? coming, [ASM] about the So okay? see constrained wave have a We let third exactly growing of stop be happens fundamentals rather back before following we until right the be we to a growing the in although problem put a will market question, rest was pandemic. think road have and are thinking on okay? in me We your

Operator

Versiani Citibank. from question next The is with Roberta

Roberta Versiani

my one a Just on quick side.

more especially, Central seeing in and are wondering expectations those expectation growth And America. bit I you competition are the mentioned on What America both strategy a Central in South right you the what now? could was your if on And elaborate front in America. You areas? the

Enrique Beltranena

Roberta. Thanks,

called aircraft, aircraft there to to We're Mexico to planning this the a of X currently have year come Costa and X add pre-COVID. to in back We additional which Rica Costa [Intracam] to Volaris part U.S. Rica, franchise operates in later the

addition, in In starting El Salvador of Volaris fourth year. this quarter the we are

Salvador So U.S. towards in avenues freedoms more El being certain the Savador, building Central the America El will America. as the directly Volaris through give in the the South will traffic which growth Volaris to well. without connect with with have or America rights of And in to routes of first us we're from we new Mexico Bogotá America, destination use South Central looking addition, and from eventually ability

Holger Blankenstein

between XX past see we potential have Maybe and aircraft the stated we publicly in America that in of a add, Central term. just to XX medium in the

Roberta Versiani

Okay. to that us Anything That's great. And helpful. us? you'd regarding anything for highlight competition, like to is very

Holger Blankenstein

lower stimulate Central ultra-low-cost everyone America, no in from we carrier to just is see that Volaris Well, with do in the region. the operating, and there to apart demand remind potential fares

Operator

question-and-answer This would like invite remarks. with Beltranena I proceed his Please to closing concludes session. today's go ahead, Mr. to sir.

Enrique Beltranena

Thank the exciting times. sincere these to for of support the lessors of we we prepared gave markets. and much now gotten Thank think and again want you a especially I bankers, our that commitment It's encore. such very support of of you with my our express Board the help all team, to of everybody. to you, ambassadors, for Directors, of family been this suppliers. our a are time during unique you very gratitude all most you this And us to opportunity position in our investors, the think tremendous our difficult to I with all our this and we've

Operator

the a today. have concludes for for participation, call Thank your Volaris conference day. nice and very you This much