Q2 2022 Copa Holdings SA Earnings Call
Okay.
Ladies and gentlemen, thank you for standing by welcome to the Copa Holdings second quarter earnings call. During the presentation presentation. All participants will be in a listen only mode. Afterwards, we will conduct a question and answer session at that time. If you have a question you will have to press star.
One one on your telephone.
Mind you. This call is being webcast and recorded on August 4th 2022.
Now I will turn the conference over to Daniel <unk> Director of Investor Relations. Sir you May now begin.
Thank you Catherine.
Welcome everyone to our second quarter earnings call.
Joining us today are bill it'll have it on <unk> CEO of Copa Holdings, and Jose Montero our CFO .
First Pedro will start by going over our second quarter highlights followed by Jose who will discuss our financial results.
After we will open the call for questions from analysts.
Copa Holdings' financial reports have been prepared in accordance with international financial reporting standards.
Today's call, we will discuss non <unk> financial measures.
A reconciliation of the non <unk> financial measures can be found in our earnings release, which has been posted on the company's website Copa com.
Our discussion today will also contain forward looking statements.
Limited to historical facts that reflect the company's current beliefs expectations and our intentions regarding future events and results.
These forward looking statements involve risks and uncertainties that could cause actual results to differ materially and are based on assumptions subject to change.
Many of these are discussed in our annual report filed with the SEC.
Now I'd like to turn the call over to our CEO , Mr. Pedro <unk>.
Thank you Danielle.
Good morning to all and thanks for participating in our second quarter earnings call.
Before we begin I'd like to thank all of our coworkers for their commitment to the company and recognize their continuous effort and dedication to keep corp. At the forefront of Latin American aviation to them.
My utmost respect and admiration.
All of your aware the significant increase in jet fuel prices has put serious pressure in the operating cost of the entire industry.
This impact was especially noticeable in the second quarter in which in our case the effective price of jet fuel increased more than 86% when compared to the same period in 2019.
On the positive side.
Passenger yields for the quarter came in higher by 10, 1%, partially offsetting the additional fuel costs.
The combination of these two factors.
Plus our ability to control or non fuel related costs.
Enabled us to deliver a six 1% operating margin.
And adjusted net profit of $13 2 million in Q2.
Now I would like to mention the main highlight for the quarter.
Our capacity reached 97% of second quarter 2019 ASM.
Rpms decreased three 8% when compared to Q2 2019, resulting in an 84, 8% load factor.
Passenger yields came in at 30 fence or 10% higher than in the second quarter of 2019.
While cargo revenue was 62% higher resulting in unit revenues or RASM of 11, 610th and 11th.
Seven 3% increase compared to the second quarter of 2019.
Ex fuel CASM decreased from six 2% in Q2 2019 to six.
Representing an almost 5% decrease on 33.
<unk>, 3% less capacity.
And on the operational front Copa Airlines delivered an on time performance of 85, 9% and a completion factor of 99, 8%.
In terms of fleet during the quarter, we took delivery of one 737 Max nine.
We ended the quarter with a total of 94 aircrafts, reaching.
Reaching 92% of our year end 2019 fleet size.
With the addition of this aircraft and the expected remaining deliveries for the year more than 20% of fleet will be composed of Max aircraft, resulting valuable fuel efficiencies.
These figures also include our recently retrofitted 77 800 freighter.
Which operated during the entire quarter carrying almost 30% of our total cargo volume.
By shifting most of our previously third party cargo operation through the retrofitted freighter, we're able to transport higher cargo volumes at lower cost.
In terms of our network Copa Airlines started operations in two new cities during the quarter Kantar Murphy in Colombia in Barcelona in Venezuela.
Ending the quarter with service to 76 cities in 32 countries.
Compared to 80 cities in 33 countries and year end 2019.
We also announced a new service to the Santa Lucia Airport in Mexico City, starting in September , which will complement our existing service to Mexico City, as we continue strengthening and solidifying our position as the most complete and convenient hub in Latin America.
Turning now to Wingo Wingo continues its regional expansion with the announcement of four new routes starting in October .
With this addition, wingo will operate 31 route with service to 21 cities in 10 countries.
Exactly.
Got it.
Okay.
Okay.
Sure.
Okay.
So you can see despite the current fuel price environment.
<unk> the entire airline industry, we have reestablished our capacity and network to near pre pandemic levels and continued delivering profitable financial results.
Looking ahead, we continue to see a recovering demand environment in the region and healthy booking trends, which lead us to anticipate and increasing our unit revenues for Q3, and consequently to expect higher operating margins quarter over quarter.
In Q3, we also expect to bring back our capacity measured in <unk> to a 100% of our pre pandemic levels.
Nonetheless, considering the uncertainty of the current economic environment, we remain cautious and continue to closely monitor demand patterns in the region.
So we will remain focused and flexible in terms of capacity adjusting our plans as needed.
I'd like to conclude by reiterating that we have a proven and strong demand.
Okay.
Okay.
Opinion network for intra Latin America travel from our hub of the America, leveraging Panamax advantageous geographic position with low unit cost best on time performance and a strong balance sheet and we expect that our hub of the Americas will continue to be a valuable source of strategic.
Vantage.
Now I'll turn it over to Jose who will go over our financial results in more detail.
Thank you Pedro good morning, everyone, thanks for being with us today.
I'd like to join Pedro in acknowledging our great team for all their efforts to deliver world class service to our passengers.
I will start by going over our second quarter results capacity came in at 6 billion available seat miles, which is approximately 97% of our Q2 2019 capacity.
Load factor came in at an average of 84, 8% for the quarter at <unk> four percentage point decrease compared to the same period in 2019.
Our adjusted net profit for the quarter, excluding special items came in at $13 2 million.
Or <unk> 32 per share.
Second quarter special items totaled $111 million comprised of unrealized mark to market gain of $113 $7 million related to the Companys convertible notes and at $2 7 million unrealized mark to market loss related to changes in the value of financial investments.
We reported a quarterly operating profit of $42 $3 million and an operating margin of six 1%.
Driven by higher jet fuel prices unit cost or CASM increased 19, 9% versus dose of Q2 2000 1910 nine.
Our CASM, excluding fuel came in at <unk>.
Four 6% decrease compared to Q2 2019, even though we operate at 3% less capacity.
And finally, driven by 10, 1% increase in yields unit revenues came in at 11, 6% or 11, 3% higher than in the second quarter of 2019.
And our adjusted net debt to EBITDA ratio came in at 0.8 times.
Turning now to our fleet during the second quarter, we received $1 73, Max nine to end the quarter with a total of 94 aircrafts.
Our total fleet is comprised of 68 737, eight hundreds 17, 7% of Max Nines and nine 737 seven hundreds. These figures include $3 777, hundreds which ended the quarter in temporary storage and $1 $700 seven to 800 freighter.
For the second half of the year, we expect to receive four additional 707 and Max nine aircraft and so we expect to end the year with a fleet of 98 aircraft.
We have financed these deliveries through sale and leaseback transactions, increasing the proportion of operating leases to above 30% of our total fleet.
In 2023, we expect to receive 13 additional aircraft 11, 7% of Max Nines, and two Boeing 737, Max eights.
We've already secured financing for the first six of these deliveries through Joseph structures.
Turning now to our outlook for the third quarter of 2022 based on the current state of the demand environment and the current expectation of a price of jet fuel. We can provide the following guidance we expect.
Capacity to be back at approximately 100% of Q3 2019 levels were about $6 4 billion of S. M.
And we expect our operating margin to be in the range of 16% to 18%.
We are basing our Q3 2022 outlook on the following assumptions load factor of approximately 86% unit revenues of approximately $12 seven.
CASM ex fuel of approximately <unk> <unk>.
And all in fuel price of $3 80 per gallon.
Thank you and with that we'll open the call to some questions.
Thank you as a reminder to ask a question press Star one one on your telephone please standby, while we compile the Q&A roster.
Okay.
Our first question comes from Duane.
<unk> <unk> with Evercore ISI your line is open.
Hey, Good morning. This is Jake on and on for Duane I realize that it's early but could you offer any thoughts on your 2023 capacity plans for Q is already implied at 100% of 2019.
So could we see capacity up over 10% next year.
Okay.
Hi, Jay it's Pedro.
So the fleet plan, we have published.
It takes us from takes Copa Holdings from 98 aircraft at the end of 'twenty two.
Two one wave at the end of 'twenty, three but it could be even a little bit more as we renew all of our leases it could even be 111.
So if we do the math, there I mean, and and I should first I've said that we have not yet guided to ASM ASM growth for 2023, So we're only guiding.
For Q3, but if you look at our fleet plan and you do the math.
It's going to be like low double digits I would say.
Okay, Yeah that makes sense. Thank you and then could.
Could you just confirm that the $120 million that you brought bought back was roughly 4% of the stock in the second quarter.
Yes, I think.
That sounds about right I think that will change.
Sure.
Okay. Thank you.
It's in the range yes.
Sure.
We have a question from Savi <unk> with Raymond James Your line is open.
Hey, good morning.
Just kind of curious on the demand and the revenue outlook is really strong here and is there kind of a particular region or check type business or leisure that that's driving this.
Any recovery strength.
Hi, Savi Pedro here, so I would say that it's across the board there is not.
Not one particular region, that's underperforming or I mean, and no significant way.
And we need to keep in mind that.
In part as a reaction to.
To higher fuel prices.
Strong demand allows us to.
Produce better yields.
And it also allows the fact that fewer affects everyone pretty much the same it allows for this.
Yield improvement to be more sustainable at least at least for now.
So I would say it's across the board.
And the other thing I'll add savi is that.
<unk> got to remember that Q3 has from a seasonality perspective as a strong quarter for us so sequentially from Q2, which is the sort of.
Weakest quarter of a year from a seasonality perspective to Q3.
You also see that difference in the RASM. However, as Pedro mentioned, we're following closely the demand in the macroeconomic environment and if you went back and so we're very closely paying attention to.
Have we seen the region.
And on that on the business versus leisure part of that is seeing anything different.
Business has improved slightly but its still have half of what it was in 2019, but we see.
And an improving trend.
Yeah and on a sequential basis, it's gotten.
Got them better over the course of the year.
Helpful. And then if I might just a quick question on the fleet.
It does look on the fleet plan their Max eights coming is that I thought initially the kind of the plan was for Max Nines, and tens and I know Tom got certified yet is that a.
Kind of a change in strategy there I know it looks like maybe one Max nine has slipped from this year to next year. So maybe it's just the fact that Boeing has boxes available. It just curious what the strategy behind the fleet plan.
Yes, we always we're always planning to get the Max eight and we only need a kind of a certain number of Max nine which we use for our <unk>.
Longer segment.
So so we get to Max eight that the plan next year, and we will continue getting more macrophage and probably a few more Max nines that we saw.
Have to receive to get to the set number and our fleet plan and our order with Boeing has enough of flexibility that we can determine which subtype of wood.
We would perceive.
And in due course.
Are you able to share kind of what the right size of Max nine is there.
The <unk> are going to be yes, it's going to be in the low thirties.
We're going to be in the low 30, the rest are going to be most likely Max eight.
We have options and the Max 10 also so.
So we haven't made a final decision there.
So that's kind of where how it looks right now.
Alright, Thank you very much.
Thank you Sally.
Our next question comes from Alejandro Zama Kona with credit Suisse. Your line is open.
Thank you Hi paradox, there. Thank you for nickel and a quick question on the guidance on next year.
So beyond the 590 <unk> guided for the full year 2022.
What would have been the strategy.
To lower the costs.
The higher inflation environment, what can we expect on playwear marketing online payments in the medium term.
Well I'll start with a few comments and then Jose.
Can pitch in.
We are we are operating with.
Higher gauge.
So so we have more.
More and more seats for an hour aircraft, which allows us to two.
To spread out our fixed overhead costs. We've also since the pandemic.
Accomplished some important savings in overhead, which also help in our <unk> and have been very disciplined.
Again, since the pandemic and renegotiating.
A lot of contracts part of how we survived the worst of it.
So that's also a part of what we've been able to accomplish and we're always as you know very very.
Nimble and with our cost as much as we can.
I'll, just add that going forward and we handle we as we've discussed before I also have a plan to densify.
Our 737 800 fleet and so that will also provide tour for a reduction in CASM ex.
And as Pedro mentioned, we have a very lean overhead structure.
We've been very active in contract negotiations and some of those mitigate some of the increases that we've seen in certain parts of that network as well.
And we're also of course working on other avenues, such as distribution and the like that that should also improve our CASM in the medium to long term.
Okay. Thank you it makes sense and then my second question, if I may in terms of the capital allocation.
Is there any changing this throughout the year.
The full recovery.
And also if you can share an update on the potential DVR inks.
Yeah look our focus as a company has always been to return value to our shareholders and as part of that we've been active in our share.
Share repurchase program, which serves us.
As a conduit to.
We manage some of the liabilities that we had to take on during the <unk>.
So that's our main focus right now and <unk>.
This is something that we look forward, we have a set dividend policy that we.
<unk>.
We've had even before the pandemic so that's something that.
Of course, it will be addressed as well, but again.
Just want to reiterate how important it is for us to return value to our shareholders. In addition to that from the operational standpoint.
We also have a set of aircraft, arriving which required.
Pre delivery deposits with Boeing and as you saw we have 13 airplanes coming in next year et cetera. So that's also part of our capital allocation strategy to grow the business.
Thank you.
Okay.
We have a question from Michael Lindenberg with Deutsche Bank. Your line is open.
Oh, Yeah, Hey.
Good morning, everyone.
Pedro just wanted to touch back on on Wingo, you talked about regional expansion.
The number of cities by October .
Countries does that include the new service I think that Youre planning to Argentina.
<unk>.
If thats the case.
Whats the fleet size at that point, because it would think that.
Flight to Argentina back in force would probably use it the single airplane.
Some additional color on that operation.
Yes, it actually uses have an airplane.
Okay.
The way we operate at.
Either we hours.
So sorry to uses have an airplane, it's contemplated in aircraft number nine but they'll get eventually aircraft number 10.
There'll be enough for them to serve that market another good.
We can go growth carefully.
We're very conscious of the competitive market in Columbia in the region.
So we can go does not have like a set plan to grow for the sake of growing.
It grows to gain strength and be successful.
So so we measure every step like we always do so and wingo is no different in that regard.
Hey, Joe is it fair to say you know usually.
<unk> high density.
<unk> no frills type service, usually when you get beyond stage, three and four hours it becomes much more difficult value proposition, but then when I look at some of the changes going on in the region.
It seems like competitor airlines are doing very long haul with single class type type layouts, and so maybe that that creates more opportunities for the wingo product is that is that a fair.
Sort of assessment.
You know the competitive playing field.
Yes, I mean, it could be we're still learning.
Sure.
So it could be.
Okay and just my second question on cargo.
When I look at your passenger revenue up 6% versus 19 and others up 20.
Cargo is up 62% and I realize it's obviously being driven by the freighter, but absent the freighter.
Your cargo revenue have been the growth rate been something more similar to.
Maybe the other up 20% because I am sort of incorporating the higher cargo yields that we're seeing in the marketplace.
And I'm trying to get at how much that single airplane has added it looked like it was very.
It was a meaningful contribution on the top line.
And we see the growth rate perspective.
Right.
Meaningful.
But not as much as it seems because.
Previous to the freight our own freighter, we were chartering a freighter aircraft.
Cargo.
Operator, so what we have done we've been able to.
Little bit more than double double the hours that were that were flown before by the charter freighter.
So we've doubled that with our own freighter. So I would say, we would have grown probably more than 20%.
Even without even without the freighter.
Okay. Okay.
I'm getting a sense.
There is a big cargo opportunity in your part of the World I know youre going very slowly, but if every airplane ads I don't know five to $7 million to $10 million per quarter of revenue.
Just getting a sense of maybe the opportunity, but thanks. Thanks, thanks for answering my questions.
Thank you Mike Thank you.
We have a question from Alberto Valerio with UBS. Your line is open.
Hi, Jose.
Thank you for taking my question.
First of all did very polarized and guidance for the third quarter I would like.
True.
Some quality widened next caller.
Next border would it be.
Good quarter and related debt.
Usually when a C K.
<unk> going down.
So David Lindahl.
And even though just for seasonality.
Good quarter.
So although it may go up 4%.
And that as you posted.
Jets you went to <unk> this is Mike.
And my second.
My first question is about your second question.
My second question is about the supply demand environment do you want to.
Got it.
Maybe.
Or should the fourth quarter with the Brexit deadlines.
Adding capacity to a national Bank my.
Back to you guys in the fourth quarter.
Wait we might see some.
Threshold.
For updated third quarter. Thank you.
Yes.
Yes, I'll touch on the third quarter question and yeah.
Let me start by saying that that you are correct lower fuel prices could impact the yield environment.
Given given the competitive dynamics, we do believe however, as I mentioned that the third quarter has historically a high season.
Component to it or more so than the second quarter and number two let's not forget that a portion of what we are going to reflect as revenues. During the third quarter has already been sold and during the second quarter. When fuel was still going up if you will the movement in the fuel price has been very recent.
During the month of July so.
That the impact on specifically at third quarter in terms of yields.
We will not necessarily come in in such a strong way given that.
<unk> of the quarter was already sold.
Very very high fuel price environment, but as I.
You can imagine we're very closely following the macro operating environment.
Just to adjust our pricing et cetera, and just to make sure that it's all competitive.
And in terms of the fourth quarter.
And kept and competitive demand, yes, there is a we're following that very well.
And the impact on our on our yields specifically related not just to the fuel environment, but also to the currency.
And macroeconomic forces that are around in.
The World right now so we're following very closely both items both on the competitive landscape.
And the fuel in the macroeconomic environment.
Thank you very much.
Our next question comes from Stephen Trent with Citi. Your line is open.
Good morning, gentlemen, and thanks very much for taking my questions.
Just two quick ones from me.
First <unk>.
Follow up on your network comments, so when we think about the recovery of the network.
Is it still accurate to say that.
Roughly 75% of your destinations you are still moving.
40 of semi passengers or less round trip each day.
Yes.
That has been change in March.
Great.
Great.
Our measures as Stephen sorry.
Our calculations show that about 75% of our origin destination points have less than 20 passengers per day in the total market size. So it's.
Small figure of all the passengers and the majority of them on the.
Markets that we operate in.
Oh, great. Thank you, thank you Pedro and Jose.
And just real quick.
Could you just give me.
High level of refresh or where you are with.
Chuck I'm in an airport I know there were new lounge is going up and in a new wing and what have you if you could.
Just refresh my memory please.
Yes. So finally after mentioning the soon to open new <unk> terminal.
During so many earnings call.
We mentioned in so many times that we stop saying it.
So we were in June .
So it finally open and finally opened in June .
And how we connect passengers and the like so we're very happy with having the new facility, which take a procurement report from from.
It's our 34% to 54 gate, even though some of those new 20, new gateway, we're already using it but also we have new chicken facilities much more spacing customs and immigration and the whole thing.
So it gives us some runway to continue growing in the next number of years.
Okay.
Okay that is super really appreciate that.
Thank you Steven.
We have a question from Pablo <unk> with Barclays. Your line is open.
Hi, Thanks for taking my question.
It's kind.
Kind of a follow up to <unk>.
How would you say that the capacity is recovering amongst leisure and corporate related.
Relative to 2019 and also.
Corporate reaches stripping them at levels, what do you think it will be the upside towards yields for next two quarters. For example, thank you.
Alright, so both.
Hey business I mean, we.
We have corporate accounts.
Not as not only as a significant.
Difficult number if it is let's say for our U S airline in the U S.
And then we have business travelers, which might not have corporate accounts. So when we put all that together.
It's still.
Around half of what it used to be.
Maybe a little bit better than that has been it's been improving slightly quarter over quarter.
<unk>.
Maybe slightly above 20% of our overall business.
Right now.
Still we are still seeing strength in demand.
Current and future is in leisure.
So that's what's been driving the demand strength throughout the region, but again.
Corporate is recovering quarter over quarter, even though at a slow pace.
Thank you very much better is very interesting. So what do you think it will happen when to cap the corporate already at 100 or very close to it.
Because the yields are already very high so.
Just want to assess the magnitude of the delta for yields.
Yes.
Yields yields right now reflect a very high fuel price environment.
As we know and the fact that thats something affecting the whole industry.
We're not we're not.
Banking on forever.
And that's why that's why we're also always so conscious about our ex fuel CASM.
And the fuel comes down and so do yields will be fine too.
So we're not we're not banking on anything.
Right now, we're not we're not expecting business in corporate to be at 100% in the near term.
Okay perfect. Thank you very much.
Thank you Paula.
Yes.
Sure.
We have a question from Daniel Mckenzie with Seaport Global your line is open.
Oh, Hey, thanks, good morning.
My question is follow up on some of the prior questions. So I'm going to come out at a little bit differently.
What's your best estimate for when corporate volumes return to 19 level. So a volume question specifically.
And then tied to this how would you characterize business confidence in the region is there a pent up demand or are you thinking there's a permanent impairment given the trend to remote working and whatever you can share with respect to anecdotal conversations or surveys is helpful. P&L with the dreams product have to believe it's going to be a little better.
Morale for you guys, but I don't want to put words in your mouth.
<unk>.
Yes.
Well first I should say.
Our business class load or better than pre pandemic, even though business traffic is down as we just.
<unk> spoke about.
And social leisure traffic is picking up as some of that space.
So thats a positive window business travel will be back hard to tell.
It's going to be longer than what it would've been without all of these technologies for remote work on everything, but we know it will eventually be back.
Of course, because it is.
We're going to continue growing.
We know that but how long it's going to take hard to tell.
Because yes, there are and the need to have before to be there in person for every single meeting, but the value of personal travel.
Replaceable.
Knowledge is going to make up for it we see it in our own business.
There is no a number of business of meeting that has to be in person because theres no other way of being effective and same with visiting clients and suppliers visiting also it's going to be step by step. So it takes some time and it's really hard for us to predict.
And I think Dan here very interesting aspect is that past.
<unk> dropped requirements for visiting or for traveling that also should boost business travel going forward. So we see with good eyes as garments have removed.
Testing requirements.
Carter.
Or is this sort of a hint.
Hindrances that occurred for travel.
The last several years in that setting also.
<unk>.
Business demand going forward.
Okay and then second question here just same theme coming at a price that's some of the prior questions a little differently here.
How are you assessing the restoration of some of the larger Latin American markets. So countries, where you are seeing are areas of strength areas of weakness and I guess, what I'm getting at is Brazil. Once upon a time was a really strong end market I think once upon a time, 20% of your revenue and it just seems like there's a.
Our longer term path to better revenue.
But it's just helpful to get a reality check along the way here as you kind of think about areas of strength and weakness.
Right now our network, it's very balanced.
Most markets are doing well.
As per the capacity we have deployed so we haven't.
We haven't reopened every single city, we were flying to before we're not we're not operating in.
At the same level everywhere, we're not at a 100% capacity yet.
So there have been some shifts there but budd.
Related to the capacity we have deployed.
I would say most markets are doing well and in a similar way, we don't see big Big differences.
In that sense.
Okay.
Okay. Thanks for the time guys.
Thank you Dan.
Our last question comes from Helane Becker with Cowen Your line is open.
Oh, great. Thanks, operator, thanks for squeezing me in.
Good to hear from you guys.
So.
Yes.
What's the competitive situation like in Panama right now are you seeing.
Some of the other airlines in the region increasing service through.
Through the airport.
About reinstatement of flights from Europe .
And the.
The competitive situation there because for a long time you guys.
Had co chairs with KLM in other areas and bringing in large plane full so people.
Elsewhere in South America.
Just kind of wondering how competition is shaping up.
In the market now.
Okay.
<unk>.
Well as you know.
Most of our competition happens.
Outside Panama and its usually hub against hub.
Or nonstops against our hub so the battles are usually.
Outside Panama, However, what you're mentioning is very important to us which is the connectivity with.
A number of different carriers that serve panamax Sir.
Our hub and actually are able to sustain their number of frequencies by connecting with our network, especially the European.
Like you've mentioned so some of them are back to near pre pandemic levels like KLM and air France, Theyre close to daily flight to each those are important benefits for us.
And we by the way, we could share with all with all the Europeans that flight to Panama with record sure. Iberia is also near pre pandemic levels.
Turkish.
Is that pre pandemic and planning to grow.
Lufthansa has been replaced about Euro wing, which is part of the Lufthansa group and there are slightly below but they're talking about growing also.
And then Andrew robust something similar so I think we're somewhere between 80 and 85% of the seats that were coming in from Europe , pre pandemic, but again and growing and the connectivity between copper and these partners.
So growing.
That's great that's great to know.
Alright, the airport I know somebody asked about the airport before but.
Is the new airport from our customs and immigration perspective.
Well staffed and are you able to move people through the airport.
In a speedy fashion.
Well for it.
For passengers.
Departing or arriving to the city of Panama, So local passengers.
The facilities are much better they are well staffed very nice ample room for back of the whole thing before was quite congested.
You know when you when you go somewhere it's usually your only choice. So it doesn't make much of a difference.
In terms of connecting passengers.
The new terminal is very nice.
Our new Copa club.
Truly amazing.
And we have more gates, which is very important so as we grow in the coming years, we it will be a while before we need to use the remote positions again and that's a big positive. The only negative is walking distance is can be quite long from one extreme to the other.
It is not uncommon in most airports in major hubs, but some of our passengers are not used to that.
But we're selling we're selling the health side of walking on exercise.
Yes, it's good it's good walking is good but also we try to.
Make sure that flight that connect with each other have.
With significant connecting flows kind of our near to each other et cetera. So our operational team does a great job at.
Signing gates in particular out of the airport.
Walking is good.
Walking is good for you okay. Thanks, guys.
Thank you Hilton.
Okay.
There are no other questions in the queue I'd like to turn the call back to management for closing remarks.
Okay. Thank you operator, and thank you all this concludes our earnings call. Thank you for being with US. Thank you for your continued support.
Have a great day, and we'll see you in the next one thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yeah.
Okay.