Q1 2020 Earnings Call
[music].
Good morning, everyone and thank you for a static bike and welcome to Pattersons first quarter 2020 financial results Conference call.
All lines rental listen only mode.
The company's prepared commentary, we will open the call for your questions and answers.
Structures on how to ask a question will be provided at that time.
Please note. This event is being recorded at this point I would now like to turn the call over to Ms. Maria Rodriques, <unk> corporate finance and Investor Relations Director. Please go ahead.
Good morning, everyone. Thank you for joining the call.
Today, except prejudiced I feel good.
<unk> Executive Vice President.
Second stage.
I see a full so.
They will be that's gotten the company's first quarter 2020 Russell.
Afterwards, we will move onto your question. Please.
Please note that this coal for investors.
Oh.
Any questions from the media will be taken on an individual basis.
Before we begin dish I remember my they would want at this call may include forward looking statements within the meaning of Peaker, we'll just curious loss.
Looking statements are subject to several factors that could cause the companys actual results to differ maturities expectations for reasons described in the company's filings with the U.S. Securities and Exchange Commission.
Furthermore, Lars undertakes no obligation to publicly update or revise any forward looking statements.
Now my pleasure to turned to cut over to the largest pressure.
Thank you Mr. everything.
Thank you Mary Lynne.
Good morning.
Challenging.
Thank you for Jordan yesterday.
Can you speak English or any thoughts and best wishes you don't have been Dart study this disconcerting buyers.
By expressing my empathy.
Okay, great support dealer Berkshires customers investors are yours.
I know we're communities during the current on.
Well if environments.
Yes, Sir that's remaining.
Sponsorships and United answers Society will be better <unk>.
The birds school, we're gonna be human any credit crisis.
[music] stronger together.
That's it socially responsible corporation.
Right It was essential services into transportation sector.
We have been guided by our regular seems a company was from.
Safety being the first and foremost.
The safety and health reform were in Boston.
We're customers you so we don't break.
Thanks go so far.
I'd say that we have had some minor number 10 bucks or their stuff happening in sector.
And they're always going to know classroom keyboards.
During the declared state of emergency whatever before doing and implementing protocols and she should buy the international obviously, because when did you an agency.
Hello.
<unk>.
Be working alongside with the Mexican Institute for Health and social predict.
James the Mexican restaurants, the private sector I asked for disaster resilient societies Rice, Mexico.
The private domestic committee for humanitarian you measure of emergencies.
After Katrina.
That's right. So you shouldn't see motor sports bars, and you should use incorporate with the help worked as others, who are sometimes well conduct switching gears bars in Mexico in Central America.
Your first worked itself and medical equipment for Mexico City more than 15, just agents, we seem to come up.
Oh, you still keeps trending this stock.
This is the purpose of the LIBOR in some relief to the communities we serve.
Yeah.
That's it.
Their contribution at this moment.
And just try to energy diverse.
No.
I can explain color business has evolved during an unprecedented challenge to the entire no. One are you actually industry.
The first war.
We faced two very different scenarios.
Well the mill since January and February so that's the measured by every little sheep matures and demand.
Mr freight revenue passenger miles increased versus the secret of last year.
Unit revenue for January and February also improved compared to the previous you.
I don't think Trent Lott sustained.
Third week of March.
Dr and started to decline as a result of the clean 19.
Yes.
On March 24.
The company amounts to the Kristine kubacki measured by eight cents for the March in need of approximately 50%.
This is Joe originally scheduled live.
In March Thirtyth Mexican government.
Well its emergency just force Mesa.
The result, well nice announced an additional complexity reduction for the most paper.
Its results that you need degrees of 80% versus originally scheduled.
On Tuesday April 21st just at the beginning of this week.
The Mexican government announced the eating a peacefully.
The spread <unk> 19, the most serious speech and extend the government restrictions to kind of thing and then meat.
May 30 at least.
That's a result.
Sorry, I'll just further capacity reduction for the most is made up approximately 90% versus originally scheduled at best.
After studies trajectory of seven waters continuous improvement delivering buses so.
The company after the state of emergency and its strongest shape with an old total cost structure solid balance sheet.
We still see shoes, and most importantly, with good goods cohesive team was enough the doors to walk in third quarter.
I feel very proud of the team that they topic I'm the work that they're doing nicely. We all can do it better through this huge.
Oh gosh structure, he's announced the lowest in the world.
Corporate it used to CASM ex fuel for 13 years ourselves for the first waters to any color.
In terms of we didn't see we've looked at first quarter was born out peacekeeping some diversity unrestricted gosh. It just means is denominated in us dollars.
Where do you see because he still has become essential to the company.
Oh no stress project scenario. We're currently we didn't decisions you can do catch up around downturn.
You know, it's always been shipped.
Interest bearing obligations in the short term.
We have developed the diligent cash preservation.
Let me close scrutiny.
Even turns.
Got it accounts for just told no durational expenditures nonessential topics, so wondering expenses and easy to do.
The company wide cost cutting measures.
Yes.
Candid approached or where you would.
Uh huh.
Yes or no.
I've been supporting I'm have agreed.
Well, that's their regulatory adoption or training.
Based on occasion days into upset so starting to show Darden's Eagles absences for.
All right they.
Let me remind him.
They were contract.
It's a foods that can be schedule.
[noise] members, a substantial amount of their pain skill she's based on Barnabas flight hours.
Well it doesn't mean Easter before the wages.
We used across the different organizationally years, you know range, which starts.
Maybe per se, but the C suite level kind of goes down to 20% lower revenue from organization structure.
I have to say that didn't have to be very painful for me when I meant just kind of strategies.
Oh, Yes is it was right.
Got the board of directors no none independent members that we wondered perspective, there I know compensation.
Well the independent members have like 40% up there I know compensation.
We have reached out most of our suppliers ignoring the whole thing extended thing that parents and even haircuts.
We have been Fortunately in receiving corporation for most of forward to source.
American groups another means business partners.
Did you there.
Great well.
Being supported learnings quite successfully completing these comprehensive negotiations.
I will never forget their support.
We have started off the flexible and strategic operating Black Hills.
Well, we have cancelled unconsolidated sites, you noted that the seem to be.
We have managed right afterwards, each other platforms and web services in order to satisfy we're currently over well customer service trends.
That's what areas.
We have come together after probably.
Oh sure culture and values.
Where series of collaborations connection.
Lets you need is stability.
I've become from them in.
No I will start to the Companys financial and operating results for the first quarter after anyway.
Do you rosin increased into first quarter year over year, 2%, mainly driven by the told on CD revenues, which had an increase of 16% year over year.
He assumes grew by 7% to the first for you mean sercel growth, what's helped generated by better utilization for once you know assets.
During the first two most of the war.
The number of passengers we targeted in the first worsened by 6% year over year with a healthy low sorry.
The first quarter over the years the lemurs on operating income of 308 million. That's an operating margin of 4%, which is 3.5 percentage points higher than first quarter of 29.
Well actually just the first quarter was thought to keep operating cash flow generation.
An 8 billion barrels food water and they also it really mentioned the balance.
Okay.
So one of our first demonstrates the strength of some sense of what ours is something else to start a business model any sort of done any stationed on their between different. This performance there should be no doubt. The just like every other passenger car in the world if future environments, where the industry ancillaries he's very uncertain.
Well, most Nike for Centigrade, China integration rally in fashion.
Now let me Bob.
Regarding that 60, Vice president holding black inside whenever rates further revenues under into commercial strategy in the current environment.
Thank you Enrique.
In the first corridor. This year, we achieved the following topline figures in the domestic market.
Affects it was 86.1%.
And the international market that load factor was 81.7%.
Domestic and then go for the quarter with 7%.
While the internationally it then well what 6%.
So to answer your revenue per passenger performed very well, reaching 564 vessels for the quarter, an increase of 9% year over year.
Total ancillary revenues increased by 16% year over year and now account for 38%.
Total operating revenue.
Okay.
Capacity allocated in Central America represented 3% of total eight cents.
In terms of operational reliability on time performance was 86.7% for the first quarter with a scheduled completion of Nike three part one for said, which was mainly driven by the cancellation all the last two weeks of March.
The first week of March we held Polaris is and you will anniversary sales promotion.
Probably the biggest promotion of the year.
This year.
The promotion surpassed last year's record sales.
Favoring the company's liquidity position.
The big anniversary promotion successfully compete it on March 2006 and 13.
Okay.
And then we can mention it was not until the third week of marks when we started to see a dramatic drop in passenger traffic.
Yes.
The international traffic followed by domestic.
In the last we got March we closed operations in Central America altogether in response to the health emergency and in line with the measures established by you or pardon El Salvador, what Bala and Costa Rica.
As of today, we have produced capacity by 80% versus the originally planned schedule for the same time period.
The international markets have had the highest reductions.
We have cancelled and consolidated flights in a flexible responses and measured way focusing on flights profitability.
During this past week, we have be monitoring the dynamics of the markets that we serve food demand for bookings and cancellation patents.
And this difficult environment, we have found that our main target customer segments. The passengers, who are visiting friends and relatives or more resilient to traveling then the business and leisure segments.
This is one of the key reasons, maybe get used operations at a later stage that said some of our Mexican fears.
Also remember that Mexico in five to six weeks behind the U.S. and do you hope in this endemic.
For the first quarter over a year, we offered at an average of 392 days like segments.
On route that connect 40 cities in Mexico, and 20 cities in the United States that Central America.
As of today.
I just had 131 day operation.
40, domestic and seven international rules.
We will continue through we used to schedule into short term.
And if you read off great uncertainty and given that we travel demand.
No. That's we are in phase three.
I've got me here in Mexico, We plan to go further reductions in may of up to 90% versus the originally published schedules.
All in all for the second quarter, we are expecting an average capacity reduction over 80%.
Although it's early to make predictions.
For a couple of months from now.
No factors are likely to be 10% to 15% lower than our historical levels. In this time same time period.
We expect a capacity reduction from 50% to 60% in the third quarter as well.
In terms of maintenance, we have put in place a plan in order to preserve the f. crossed that have been grounded.
We currently have 63 aircraft in long term preservation.
During the current environment. We have also been accelerating the digital transformation initiatives, we have adapted our digital platform and websites is to satisfy our karkhi overwhelmed called centers.
Some call Center operations were also affected by Governor defaulted white closings in countries and regions, which they operate.
I've called saturated the call center during the pandemic, we rapidly made additional development on our website.
We also launched a big communication effort to direct our customers to the wet and Guy who did change process.
Full flight cancellations initiated by Larry.
We love the automated platform able to meet flight cancellations in the system and without human interaction centsthree options to customers to choose fall number one.
Also for the total amount of their purchase Clos and an additional 25% credit.
Number two change their flights for future date with no change fees.
Or three.
Before.
[laughter] flight changes initiated by the customers.
We have also made it easier to change reservations onboard ours dot com in cases, where the flights we made the schedule, but the passenger chooses to fly Warner later date.
For example, we are waiting change peaceful flights until the end of fuel.
Since March 15th most changes have been done by customers themselves on our digital platforms.
We also finding opportunities during this time of prices, we have significantly advanced digitalization projects for example, [noise].
Great to the latest version of music I said now because every division platform, we will be among the first three airlines to migrate to this version, which offers bought correction additional functionality and more flexibility.
Clearly the pandemic would have an impact on girls.
Well ours is reducing it twentytwenty growth expectations from plus 10% year over year.
Potentially negative growth.
See golf Central America, and the U.S. with me in a recession for Twentytwenty and this will have an effect on demand for air travel.
We are managing our feet deliveries and recently agreed to in fact this law at Wolf.
So far we are exploring he may have eight aircraft deliveries within the next 18 months.
For the second half of 2021, we expect it bounced back all schools due to all superior ultra low cost business model.
As economic activity returns.
Expectation, it's for what's one low cost carriers to recover much faster than traditional carriers.
Now.
I'd like to turn over the call to our vice President CFO sort of got hit it.
To discuss our financial performance for the fourth.
Thank you Holger and Hello, everyone.
No I wouldn't continue we discussion of our results in accordance we did see goes files with the Securities and Exchange Commission income you see on must be a nine month gadea either.
[noise] operating revenues for the first quarter reached 7.8 billion basis, representing an increase of 8.8%. There's just a thousand 19.
During the first quarter CASM ex fuel 11th would mean.
4.13, U.S. sense that the U.S.N.U.S. dollar CASM was 6.24 cents.
We all 4.5% there since 2019.
Moving on to profitability it'd be got into first quarter was 2.1 be on their source on EBITDA margin of 27.2%, which is 5.7 points higher than the first quartile.
I was in 19.
[noise], we reported a net income for the first square negative 1.5 billion ambitious with a negative net margin of 19%.
Nothing that's a significant contributor to these net loss if it depreciation I'd be handled the first quarter that lead to a noncash FX net loss for 1.8 billion pesos build the opening you like.
Do you I was a net U.S. dollar money right now you really deep Association.
During the first square the net cash flow generated by operating activities was 2.8 billion basis. The net cash flow U.S. engine best in CBD reach a negative 37 media ambitious and the net cash flow he was in financing activities.
Well its name a deep 1.9.
Maybe on the median basis.
So much.
The first 2020, gosh gosh equivalents were 10.7 billion basis 2.7 billion pesos above December 2019.
Representing 70% less stores mountains operating revenues.
Well I used when he started a negative net debt off 4.8 billion gosh, excluding these liabilities quicker nice on that day I for rice adoption.
Yeah.
Well, ladies net debt to EBITDA ratio close to that point it feels the Korea, I sort of times, reflecting a healthy and solid balance sheet.
Important to note that's companies lung kind of does.
That's not bear any people amortization for the year.
For the first quarter of 2020, U.S. dollar denominated collection represented 43% well still data revenues.
I want to see well expense line over the quarter, what's it lightly benefited from the reason drop in jet fuel prices as we only had approximately 25% hope you expected fuel consumption.
I would imagine portfolio has had pitching accounting treatment fad, they're related gain or loss as being embedded in the sea level expense line.
Okay.
Further mined in all the here, we have a hedge position of around 60% of our own generally projected consumption.
As we are likely to the U.S. capacity, Florida that check on between that May no longer be Bali reporting criteria before the release of gain or loss Oh. The unhedged portion will be located below the line as a fine chemicals.
I think we can mention we have implemented cost cutting measures under a movie gross.
Gosh, there so they shouldn't program, which includes some of the following measures.
For the first quarter the fixed costs were approximately one third oh that thought Douglas.
Also wage approximately one half I really couldnt do you have got rentals.
In what these on ongoing process.
Already manage stood affair, 53% Oh go rental payments that you into second quarter.
Well, we typically mats, we 27 29 of our C I named gene Lessors.
We expect fathering flu finding these line.
I'd be really paying them to ferros and helicopter programs with other main supply, yes, I mean it chief.
Oh gosh reduction was mostly daycare themselves, but doesn't feel though is the most obvious example.
Oh personnel has been really supporting an 82% well be operational personnel has agreed to passionate heap baby on absences, which go from two to three months I will jump flying for the rest of the you are they mini most fixed cost theme I would use.
About 40% below the it's done done not but if I wish they typically flight.
Oh, the I mean is that the from Enrique already reported the reduction on and one wages among the different organization now no.
We have reduced capital expenditures to do a minimum and got non essential extenders extensive site.
Well the here.
For the fiscal quarter, well he has been able to negotiate a reduction on the fixed costs. In addition to their rent, though the five else.
Oh.
We have established a pleasantly war room, where we didn't again Lee.
It's FEMA I'm happy to use even father, the non operational expenses.
In the face on the widespread industry disruption the company is not providing guidance on their names. We however intensified our already strong effort to myself gosh, if you continue finding and implementing additional cost cutting measures.
No I thought it back to end weekend for closing remarks.
Did you Sonia.
Before I do my closing remarks, I went to form you got the sure holders the company on the Junos shareholders meeting held when they grew 22 2020.
Oh, you do Brian age Frankie as the new chairman of the board of directors.
Mr Franc East has extensive experience use or industry.
It was a one cents below your reformer German would remain serving as an independent member of the ward.
And the company is very soon food, where she's leadership during the best six years.
The shareholders old smoke 0.2, new very experienced board members money to Asperger no injuries young you into Mexico, and weather [laughter] smear gains you're with Nike car.
With these changes are one of the director has become stronger.
And well Ares management is looking forward to continue working very very tied with.
Well it over business there are no industry have begun to experiencing music an adverse impacts due to the Toby.
We cannot get Lucky Friday.
Backdoor loss.
I don't offer any assurance that these impacts with nothing densify the student that the outbreak brushes and spreads out too much.
It is not yet possible, let their minds extended reach these pandemic move further decreased demand to for Charles.
Our top priority.
The safety and health of our ambassadors and our customers because I mentioned at the beginning of the meat.
We have taken wrapped in an appropriate actions on doing minis could it be operational and financial performance.
Mexico's largest domestic partner you do some responsibility to remain United.
They don't want to close or where spreads to LIBOR. The best version of our cells in order to overcome the situation.
He will remain guided by a one viewers volumes I know we're meeting.
Hopefully.
Well go close some support those sort of these mission.
Thank you for leasing operator, we're ready to open the call for questions.
I got this time, if you'd like to ask your question. Please press the star and one on your Touchtone phone that star and one on your Touchtone phone.
Well take our first question from Duane Pfennigwerth with Evercore ISI. Please go ahead.
Hi, Thanks, and good morning, just just with respect to you know the first quarter. Your your revenue held up a lot better than what we've seen so far in the U.S. do you do you think this is just a timing issue that you that you've seen the cobot impacts.
A little bit later, and then into the second quarter. Appreciate the commentary about you know the level of capacity reduction, 80%, 90% do you think revenue declines would be similar to those capacity cuts or worries revenues. The trajectory of revenue you no different than these capacity cuts that you're outlining.
Thanks, Glenn I'll take that question I'm, so sorry on the first quarter two effects number one Mexico is about five to six weeks behind the U.S. and Europe independently and never tool to domestic market in Mexico has held up better than the international Mark that we have.
No what share of international flights on some of our.
Mexican yes, and a U.S. carriers as well and then I'm.
Third point it stepped up our customer segment, the visiting friends and relatives or holding up better than the news and business consistently so we're starting to be a far and and we've held up that it'd be better in that first quarter.
For the second quarter.
As you point out so we have announced an 80% production April we are going to pop schedule, 90% for May and then probably around 50% for June as we see ramp up.
In the market.
I think markets.
Particular end of revenue cost that you can see you can probably observed are going to be incandescent light as well.
In accordance with.
Okay, Great and then just for my follow up given all the aggressive steps that you take into to respond to this.
Would you be able to you know speak to kind of a monthly.
Cash opex rate at this point like what are your what are your monthly cash operating expense you know levels. After all these initiatives take hold and thanks for taking the questions.
Yes, sure doing like going I I can explain what he's out where cash burn.
In terms of fixed cost because on the on the Bible cycle, it's kind of a its cannot be dependent on although revenues on capacity, So oh, gosh, but mostly it's about $75 million to $40 million per month.
That's that's very helpful and clear thank you.
Thank you.
Our next question there's from had taken a becker with Cowen. Please go ahead your lines open.
Thanks, very much operator, or just two questions.
Sure. So as we think about the model and the load factors right. Now you know you said they were down I think holger 10, or 15 percentage points below where they are normally if if that load factors can return to normal or whatever.
Got it say, 85%, 80% how should we think about your model in that environment.
Well no helane.
We did where we're seeing that like you definitely noticed 10% to 15% as we mentioned.
We do have quite a lot of Nols as well.
What's happening around 25% to 30%.
So the on boarding older sexy, but slower than do you have booked an old and we've been able to.
Consolidated flights and increase the book load factor on many of our sites and we are managing the profitability on a slide by slide 11 looking at notes.
In the medium term.
It's it's really very early to tell how things are going to evolve. We expect every turn off some demand in June and into the summer season, but its really difficult to make a prediction right now because the booking curves art art or not in line with they start with booking close but we can.
However is that we have the lowest cost position of any competitor in the market ended the long term, we have to superior business model in the market. So we should be able to return to historical load factors events and that's our expectation the.
Hussein's, who they I think oh.
One of the beauty so quarter hours is we don't have restrictions inclusion and we didn't scheduling a very flexible way.
Well, we're managing things is we have to core costs when Joker really dropped.
So so so holder and she's and the commercial teams are managing the scheduling and managing the availability of flies.
So what.
Where you can make money will be or where we did that he's come out there to keep it.
So so I think.
You will be seen no she booming quo than markets, we keep rates, but from for one thing I Didnt shoot one thing I can assure is why don't I mean, youre reading is going to be at least.
Okay.
So that's really helpful. Thank you and then my other question is can you say.
The what the.
Take rates are on doctors versus cash refunds like how many people, we're taking the voucher plus the incentive versus just asking for the third option the refund.
Well I think I mean, the good news is that a many customers are taking that the vouch auction and with a 25 cents do something like 20 credit.
During the first 20 days off the implementation of this service.
Many more customers have selected the cultural option.
And at done how they make it the vouchers in a self service way without human into action from the call Center for Markel Central which helps us on the call center cost as well.
Right they actually choose what is suited to their needs. All so I think that's that's really good for our forecasted places like.
Yep.
I just need one thing clarified did you.
Did you I don't know if it was sarnia or Enrique did you say that capex.
Has been cut to zero.
What did you say about capex.
No no silly because for example holder it said that she's developing these schools you know navigator and that's kind of stop doing those things are fundamental for the company. So you basically go talk topics to zero I mean, it's not a search okapi exit told me that spans he said that's got to stop that we have to come down.
Okay.
Sorry about that and then what about just aircraft to frosted you, but did you say about that.
So we're worst everything is still a piece of work.
And work Ross's collating, but I mean, we have like 18 aircraft and writing in the next 18 wells.
And we so far we have optionality is to reduce the in 79.
Okay.
Okay. That's what we have already on the table would say therapist and degrees of freedom anyway.
We will people working on it.
Okay great.
Yes of course.
Alright, well thanks for that helps team good luck.
Well you can.
Good evening with his let me be difficult times go ahead operator please.
Yeah. So we'll go next to Mike Linenberg with Deutsche Bank. Please go ahead.
Yeah, I'm, just hey, good morning, everyone I'm, just a follow up though on on Capex since it sounds like it's not in zero, what so if we think about non aircraft capex.
What is the budget for 2020.
And then sort of <unk>.
To add to that.
What are what are the number of airplanes that are coming not over the next 18 months, but what what is currently coming over the next say you know between now and year end 2020, how many airplanes do you have delevering.
Hello, Michael how are you cite Tanya.
Yes, so far we talk to us and we can mention we have got Oh, no chest from Oh, okay. Okay, just doing the watching her nation, maybe we sales.
That's all the recovery a you know a situation.
Do more or less intend to although nonessential topics that so far.
Do you get a minimum.
So I want to stress. The fact, Michael does we are focusing on social for certain gosh.
The company will preserve cash.
I mean as much as.
Obviously, I mean, something that generates revenue, you'll see something that you're going to stop. So so that's what we're doing and ER I don't think we are there with something which is a finished its very dear the topics to Scott. That's it's very necessary, okay, all right and I want to be absolutely clear about.
Oh, the second thing is because LIBOR rates will take whatever degrees, we tasking stake okay legally okay, but ah the companies doing whatever it takes to limit ever.
Mhm.
Well that's also very clear so it's no. It's not that it's not finished it's that we do have contractual things that we need to deal with mhm.
Filters.
Yes.
Okay. Okay, and then just maybe tell Holger, if we had to split you know to do the composition of.
What percentage of your traffic do you believe in CFR, maybe what percentages leisure and presumably maybe five or 10% of your traffic maybe more actually since you have such a good service pattern.
It is business or you know what I would prefer to less price sensitive business do you have you know sort of rough numbers on how those three buckets split out.
Yeah, I think they must depends on the on the root obviously, but what do we can say is about 50% of our customers are <unk> customer.
About 30% would be easier, 30% to 40% would be easier and did okay.
Oh and medium sized enterprises.
Hi sense to travel.
We got all the corporate and government traffic Yeah, no not that's that's actually.
When you really don't have much government traffic.
No.
Okay and then just my last question you know and this is to the team you know maybe correct more direct Enrique anything hearing out of the government.
You know I think get Aeromexico, you know they mentioned that maybe they were going to get some relief with respect to air traffic control you know navigation charges, you know maybe they would get some sort of benefit through you know being able to not necessarily be compelled to use the government provider a feel services I mean they were.
They were very small things, but you know anything that you're hearing or seeing or maybe you can you could add to that any sort of government assistance. Thank you.
So I'm wondering is.
Expecting from the government support them extending credit terms will probably conservativeness <unk>.
Any possible I mean, we've been talking to Bronco mix.
Right right.
I used to support the looming couldn't wait I want to be very clear that I'm not expecting to see rescue is gone.
It's going to be.
Minerals worked at its going to be more more grades and great tour.
[noise] fair enough fair enough. Good luck. Thanks, thanks, everyone.
[noise] like Youre going over the next two Matthew was new ski with Barclays. Please go ahead.
Hi, good morning, Thanks for taking my question.
Just wanted to kind of circle back on couple other question about rats are but it sounds like a lot of passengers are taking the voucher, but I was wondering if you could say, whether you're still receiving positive bookings and so are you know bookings exceeding what kind of what defines it.
Our.
Uh huh.
Passengers potentially.
Yes.
Why given a reduction of 80, 90% in April and May respectively.
Clearly or those months, we don't see net positive booking.
We see more.
Changes in cancellations and then you bookings.
Troubles, we do still see positive net.
Okay actually for the fourth fourth quarter and later.
Okay, Great and then you know just on the assumptions right now for the return of capacity think it's 50% you know in June one of the assumptions on kind of circling back on what Matt Mike with asking about you know this passenger segments, what what's the assumption on leisure returning.
The far and then maybe it potentially business how how is that how does the team thinking about returning demand in that respect.
So I'm, we're expecting a certain ramp up for the month of June.
And then always see to high season in Mexico is July and August.
Where we also estimate some return of traffic and therefore in June.
What we've seen our topic patency, a surge all the BFR market.
And that's what we would expect them this year as well obviously at a much smaller scale a than in previous years and then do you like August we estimate some we turned off and be sure passengers tried sensitivities into your passengers.
Okay. Thank you appreciate the time.
[laughter] could you.
The speakers. It appears we have no further questions I'll return to 40, you for any closing remarks.
Thank you very much.
I want to finish by 17 were they writers are stretching it wasn't working just times.
Well, whose you don't want ambassadors as I said I mean.
I would say that broadly in my entire life I have never.
Yeah.
Thanks, Scott the opportunity, we have and I see they do have responded with their full commitment and I'm very thankful duly way, they're reacting <unk> crisis.
I want also to see things your door business partners for their responsibilities I never investors want to understanding this unprecedented logo human and I mean, much you know economics scenario.
Thank you all four of them reinforcing that were runs to gather movies over company to become stronger I wish you. Good no do you your loved ones and again. Thank you very much will be here, despite the conditions of worthy.
Thank you very much ladies and gentlemen, this conference is no.
Yes.
And this does conclude todays program. Thanks for your participation you may now disconnect.
I have a great weekend.
[music].