Q4 2024 Grupo Aeroportuario del Sureste SAB de CV Earnings Call
Good day, ladies and gentlemen, and welcome to assert fourth quarter 2024 results Conference call. My name is Melissa and I'll be your operator.
At this time all participants are in a listen only mode. We will conduct a question and answer session towards the end of todays conference.
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As a reminder, today's call is being recorded.
Adolfo Castro: And now I'd like to turn the call over to Mr. Adolfo Castro Chief Executive Officer. Please go ahead Sir.
Adolfo Castro: Thank you Melissa and good morning, everyone.
Adolfo Castro: Before I begin discussing our results, let me remind you that certain statements made during the call today.
Adolfo Castro: Forward looking statements, which are based on current management expectations and beliefs and are subject to several basic uncertain piece that's.
Adolfo Castro: Cause actual results to differ materially including factors that.
Adolfo Castro: Our company's control.
Adolfo Castro: Have you seen on details about that way.
Adolfo Castro: Quarterly and full year 'twenty 'twenty four year results can be found.
Adolfo Castro: In our press release, which was issued yesterday after market close.
Adolfo Castro: Bailable on our website in the Investor Relations section.
Adolfo Castro: Okay.
Adolfo Castro: Following my presentation I will be available for Q&A.
Adolfo Castro: As usual all comparison these calls on the school will be year on year and figure figures are expressed in Mexican pesos unless specified otherwise.
Adolfo Castro: Let me start with a review.
Adolfo Castro: This operational performance for the quarter.
Adolfo Castro: Passenger traffic was basically flat year over year down one 3% at 17 7 million passengers.
Adolfo Castro: Our full year close.
Adolfo Castro: 71 million passengers traveling through our airports in 2024.
Adolfo Castro: Sustained growth in Colombia, and Puerto Rico, largely the same.
Passenger traffic in Mexico.
Adolfo Castro: No.
Adolfo Castro: Taking a deeper look at that.
Adolfo Castro: Geography.
Adolfo Castro: Colombia remains our strongest performance Mark.
Adolfo Castro: With passenger traffic decreasing in the knee continues year on year.
Adolfo Castro: Supported by the February comps following the suspension of to look at Congress in early 2023.
Adolfo Castro: Driving demand remained solid with international traffic up 29%.
Adolfo Castro: Domestic traffic rising 7% that's at Yankee candle, the 10 airlines continued to be steady.
Adolfo Castro: Most last year.
Adolfo Castro: Looking at him with big traffic trends to be normalizing in the first quarter of the year cohorts.
Adolfo Castro: The more sustainable living from 'twenty to 'twenty three.
Adolfo Castro: What political work the mixed market and senior to past quarters maintained its positive trend with total traffic.
Adolfo Castro: 10% supported by strong growth in pedestrian traffic up 29%, while domestic traffic was up.
Adolfo Castro: 7%.
Adolfo Castro: We expect trucking market also normalize after benefiting from leasing operations by Frontier Airlines a year ago.
Adolfo Castro: Lastly performance in Mexico remains absolutely debate declining 8% year on year with both international and domestic traffic down.
Adolfo Castro: Single digits.
Adolfo Castro: Moving next toward deals underperforming international traffic continued to experience year on year declines from all regions during the quarter.
Adolfo Castro: Specifically traffic from Europe decreased six 4% from kind of that receive up one 6% from the U S eight 8% and South America by 11, 1%.
Adolfo Castro: With respect to domestic traffic the ongoing print engine restrictions.
Adolfo Castro: Together with the air traffic capacity constraints in Mexico City Airport in effect since early 2024 alright.
Adolfo Castro: Alright constraining traffic flows in addition, Cancun airport is in its life.
Adolfo Castro: Impacted by the initial ramp up phase of new cooking there.
Adolfo Castro: Whom airports capture.
Adolfo Castro: One 2 million passengers from last year and is expected to capture another one 7 million this year compared to the 34 million passengers traveling to cancun.
Adolfo Castro: Airport last year.
Adolfo Castro: Looking ahead, we expect to normalize in 2026.
Adolfo Castro: And we'd be effect is reduced and to move and you show them compete.
Adolfo Castro: From that point, we anticipate passenger traffic are critical in airport and from the airport to grow at the pace consistent with each region dynamics.
Adolfo Castro: Now as we turn to the P&L recall that all references to revenue and cost figures are excluding absorption.
Adolfo Castro: Total revenues for the quarter increased 19% year on year to seven.
Adolfo Castro: 4 billion Panthers, reflecting its strong performance across all three regions.
Adolfo Castro: Colombia, and once again really growth posting a 30% increase in top line revenue.
Adolfo Castro: Supported by reaching passenger traffic.
Adolfo Castro: Mexico, and Puerto Rico also been anywhere Sterling for stroke with revenue growth in the low teens.
Adolfo Castro: Mexico, which accounted for 72% of revenues posted a mid teen increase in top line performance.
Adolfo Castro: Growth was primarily driven by.
Adolfo Castro: Low, 20%, increasing that were not to build revenues.
Adolfo Castro: Following the recent tariff adjustments.
Adolfo Castro: No no no not revenues rose in the low single digits.
Adolfo Castro: Puerto Rico represented 15% of total revenues and believer in Hy 'twenty growth supported by strong increase in both I don't know because I don't want to cause revenue.
Adolfo Castro: They are boosted by the foreign exchange benefit from the weaker peso.
Adolfo Castro: Colombia contributing 12%.
Adolfo Castro: <unk> recorded a proposed 31% increasing top line revenue.
Adolfo Castro: This group was fueled by strong performance and pulled out or not.
Adolfo Castro: Consistence.
Adolfo Castro: With revenues rising in the low Thirty's both segments benefited from continued recovery in the domestic and international traffic.
Adolfo Castro: Colombia.
Adolfo Castro: That's part of the strategy.
Adolfo Castro: And commercial offerings, we opened 45, new commercial spaces over the last 12 months.
Adolfo Castro: This included 12 locations in Mexico financing political equal in 2018 Columbia.
Adolfo Castro: So vishal.
Adolfo Castro: Revenues grew in the high single digits.
Adolfo Castro: Puerto Rico, posting a 26% decrease columbia, delivering strong year over year growth of 31% in.
Adolfo Castro: In Mexico commercial revenues drove a low single digit increase marking a positive shift from the previous trend.
Adolfo Castro: On a per passenger basis commercial revenue grew in the high single digits year on year, reaching 130 benches in the quarter.
Adolfo Castro: The solid performance was supported by the growth across all three markets.
Adolfo Castro: What are the Rico, Colombia commercial revenues per passenger rose in the mid teens with Puerto Rico benefited from a stronger U S dollar and Colombia from new openings.
Adolfo Castro: Mexico also posted solid growth in the low single digits.
Adolfo Castro: 158 vessels per passenger also benefiting from the FX impact on.
Adolfo Castro: On the cost front total expenses increased 13% year on year in Mexico.
Sure.
Adolfo Castro: To a person primarily reflecting the 80% increase in the concession fees mandated by the Mexican government.
Adolfo Castro: And the 20% in minimum wages.
Adolfo Castro: Mainly affecting cleaning and security services.
Adolfo Castro: Effective since January the first of last year.
Adolfo Castro: In fact were partially offset by a 50% reduction in saying, we're going to see if those fees.
Adolfo Castro: In Puerto Rico cost increase in the high teens.
Adolfo Castro: Mainly by the depreciation of the Mexican peso against the U S dollar when Columbia Club roads.
Adolfo Castro: Just 7% benefiting from the reserve in the provision for maintenance and conservation.
Adolfo Castro: Which helped to mitigate cost pressures.
Adolfo Castro: Consolidated EBITDA was up 23% year on year to over 5 billion pesos in the quarter, while adjusted EBITDA margin, which includes excludes construction improved 200 basis points to $69 seven.
Adolfo Castro: Driven by installed W gift.
Adolfo Castro: Gift cards that can be just Colombia, Colombia reported the strongest performance with <unk> up 61%.
Adolfo Castro: Puerto Rico with a 39% increase.
Adolfo Castro: While Mexico posted an increase of 70% in EBITDA.
Adolfo Castro: Our balance sheet remains robust closing the quarter with passenger cash equivalent over a billion dollars really debt to last 12 months adjusted EBITDA remaining at the negative <unk> three times.
Adolfo Castro: During the quarter capital expenditure spend their rate of return $2 5 billion and accounting for half of it will be a total of $4 4 billion in 2024.
Main projects during the quarter included the vertical production and expansion of terminal one of Cancun airport as well as expansion of Penguin and Oaxaca airports.
Adolfo Castro: Puerto Rico expansion once I couldn't go deep and runway remodeling remains on track.
Adolfo Castro: Mandar all the construction activities will take place outside your traditional areas to ensure no disruption to airport operations.
Adolfo Castro: We expect investments to gradually ramp up capex to this year as we advance in the key infrastructure projects.
Adolfo Castro: Those projects include the construction and expansion of terminal one and therefore, we.
Adolfo Castro: We estimated completion.
Adolfo Castro: In 2026 when terminal four is scheduled for completion by 2028.
Speaker Change: Daniel Toohey suspect to see operational improvements once there number one is completed.
Speaker Change: To alleviate bottlenecks on the non non aeronautical side of the business.
Speaker Change: Do you think placement will also optimize the processing of traffic to and from South America further supporting revenue generation opportunities.
Wrapping up.
Speaker Change: We closed 2024 with another strong quarter.
Speaker Change: Solid full year performance, despite the navigating industry challenges. So just prepping the engine issue and capacity reductions in Mexico City.
Speaker Change: Net majority income for the year rose, 33% year on year to $13 6 billion.
Speaker Change: The thing of resilient operational performance at the time.
Speaker Change: Disciplined execution.
Speaker Change: So it's also benefited from a 2 billion foreign exchange gain.
Speaker Change: Even by the depreciation of the Mexican peso against the U S dollar compared to the ethics gain nearly 840 million in 2023.
Speaker Change: We remain focus on our strengths.
Speaker Change: Our airport network through strategic infrastructure investments that in case the passenger experience.
Speaker Change: Spanish commercial opportunities support long term.
Speaker Change: Roads and create value for shareholders.
Speaker Change: We achieved substantial progress on our strategy.
Speaker Change: Objectives.
Speaker Change: And have a solid foundation in place, which positions us for continued success in 2025 and be junk.
Speaker Change: Hence my presentation remarks, Lisa.
Speaker Change: Please open the floor for questions.
Thank you again, ladies and gentlemen, it is star then one for questions and again. Please make sure. Your mute function is turned off or the handset has picked up there's real pressure corresponding digits.
Speaker Change: Our first question comes from the line of whereas awful Ramos with Bradesco. Please proceed with your question.
Speaker Change: Thank you and good morning. Thanks for taking my question I have a couple if I. If I may can you share with us your traffic growth expectation for for this year and whether you're seeing any pickup in route openings or network development by airlines, specifically on the Mexico side.
Speaker Change: And then the second question is on the commercial revenue per passenger I mean, the Mexican peso depreciation certainly helps on that front, but all all else constant do you expect that traffic to loom. These 3 million passengers that you expect now this year on a full annualized basis to cannibalize.
Speaker Change: You know your your commercial revenue per passenger and I view if you.
Speaker Change: You see a higher spend per passenger on that particular passenger that was kind of lifestyle.
Speaker Change: Thank you good morning, and in the case of the Mexican traffic, we will continue.
Speaker Change: Suffering from the restriction in capacity in Mexico City.
And then probably milk Pratt and Whitney.
Speaker Change: And I'm sure that you have heard what bullets have said yesterday and basically they're expecting to have or to continue with the PREPA with me.
Speaker Change: Engine problem during next year.
Speaker Change: Of course.
Speaker Change: They have been receiving.
Speaker Change: The airplanes in accordance with the requested.
Speaker Change: Yeah.
Speaker Change: Airplanes, they have done in the past.
Speaker Change: So it's true that we will suffered from some aircrafts to be on ground 70, something percent Whitney, but the situation is improving I would say, yes, we will be affected but.
Not as we were affected last year.
Speaker Change: I hope that's fine.
Speaker Change: The end of the third quarter situation will improve in that front as well in the case of the restriction of Mexico City Airport.
Speaker Change: In terms of commercial revenues.
Speaker Change: He said during the initial remarks, we are still suffering in the case of terminal two.
Speaker Change: We know that we are losing some commercial opportunities there.
Speaker Change: We are expecting those to improve once we open terminal one we expect to open terminal one at the end of the second quarter couldn't put six.
Speaker Change: So for the moment, we don't see a decrease but we know that we are losing commercial opportunities.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from the line of Pablo.
Speaker Change: Please proceed with your question.
Pablo: Hey, good morning, all I.
Speaker Change: I have two questions one follow up.
Speaker Change: And we have seen some press about the capacity of the Mexico City Airport shrink this year.
Speaker Change: Or something on that front and the other one had some dividends I don't know if you have some expectations, but your propulsion mix triple breast meat.
Speaker Change: Yeah.
Speaker Change: And the kitchen of the capacity of the restriction in the capacity in Mexico City airports from 52 to 43 Atms per hour.
Speaker Change: And what I have seen in the news recently.
Speaker Change: The Mexico City.
Speaker Change: Airport manager.
Speaker Change: Is open to it.
Speaker Change: Let me make this restriction and probably to go back to the 52 remember that where it's coming from the 63.
Speaker Change: So.
Speaker Change: That's why I'm expecting this to be a lift.
Speaker Change: Lifted by the end of the quarter.
Speaker Change: Also remember that next year, we have Oh, Mexico City will receive some passengers due to the World Cup and all.
Speaker Change: That will take place in June less next year.
Speaker Change: So I hope that the government will.
Speaker Change: Yeah.
Speaker Change: This restriction and safe water.
Speaker Change: And also as a voltage has more planes I'm sure that they will put some pressure on this front nicholas of dividends.
Speaker Change: No I haven't.
Speaker Change: The big push my proposals and it will be sent to the board of directors.
Speaker Change: And I'm sure that you will hear from these on March 14th.
Speaker Change: That's what I can say for the moment.
Speaker Change: Yes.
Speaker Change: Perfect.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Thank you. Our next question comes from the line of Stephen Trent with Citi. Please proceed with your question.
Speaker Change: Yeah.
Stephen Trent: Thank you very much for taking my question Adolfo.
Speaker Change: Good morning.
I know that there's certainly there's a lot of.
Speaker Change: Political rhetoric at the moment in North America.
Speaker Change: And we've of course seen some currency movements, which which you've mentioned.
Speaker Change: Are you seeing any nuances in Europe.
Speaker Change: International traffic flow for example.
Speaker Change: Can you against visiting Mexico, more frequently than you expected and maybe some of.
Speaker Change: These talks are no longer going to Disney world or something like that any sort of pivots.
Speaker Change: Pivots that you've noticed.
Speaker Change: Well.
Speaker Change: I'm sure that you have heard my remarks in the case of international traffic for the quarter all divisions were negative and it gives them Canadians there were negative <unk>, 6%.
Speaker Change: It is almost flat I would say.
Speaker Change: I don't see any change.
Due to the situation in the U S. During the last quarter.
Speaker Change: The traffic was weaker.
Speaker Change: Of course, you need to understand that some of these traffic is going to move to.
Two last year.
Speaker Change: Well, it's around $1 2 million passenger traffic at seven 5% of these less from the U S.
Speaker Change: So if you make the math.
Speaker Change: That's basically what we are losing.
Speaker Change: In terms of the.
Speaker Change: The U S traffic.
Speaker Change: Indians are not so much on the other let's say 20% of its Mexico's domestic truck right.
Speaker Change: But no I have not seen any changes.
Speaker Change: Due to the.
Speaker Change: The new politics in the U S.
I appreciate that and just one other quick follow up I wasn't sure if I if I heard you.
Speaker Change: But are you getting or do you expect to get any.
Speaker Change: Meaningful traffic flow out of Philippe Angeles.
Speaker Change: For example, Ah.
Speaker Change: <unk> already it's do not make any adjustment in Benito Juarez air traffic movements.
Speaker Change: Well the pace of the IPR.
Speaker Change: Basically traffic to and from the Moon and I would say, even the second place to conclude no.
Speaker Change: Most of the traffic.
Speaker Change: It's been managed by Levi.
Speaker Change: <unk> directly to the Moon.
Speaker Change: We are also making kind of air lenses, it's having some flying for that as well.
Speaker Change:
Speaker Change: The airport is growing of course because of the restriction in Mexico City Airport.
Speaker Change: And.
Speaker Change: I hope that the restriction is lifted we would have some some benefit there from the lines flowing directly to clinically.
Stephen Trent: Okay very helpful. Thanks Adolfo.
Speaker Change: Youre welcome.
Speaker Change: Thank you. Our next question comes from the line of Pablo months of ice with Barclays. Please proceed with your question.
Speaker Change: Hi.
Pablo Months: Thanks for taking my question.
Speaker Change: Just wanted to learn a bit more.
Speaker Change: If you had any conversations with feedback.
Speaker Change: Particularly from U S carriers towards capacity expansion plans.
Speaker Change: For the second half.
Speaker Change: Thank you.
Speaker Change: Well, we are in the process to receive.
Speaker Change: Yeah.
Speaker Change: Summer.
Speaker Change: And <unk> seen some schedule.
Speaker Change: Sure.
Speaker Change: That should be received I would say in the coming weeks. So for the moment, we do not have visibility.
Speaker Change: For the for the summer season.
Speaker Change: Perfect.
Speaker Change: Quick question, if I may on the commercial revenues once you do the works that are.
Speaker Change: I expect it to be done.
Speaker Change: MVP is there any target on commercial revenues.
Speaker Change: That you are estimating.
Speaker Change: Well there is no there is no specific number.
Speaker Change: I would say.
Speaker Change: And we used to say internally that it is a moving target.
Speaker Change: Always want more.
Speaker Change: And that is why we are always looking for what the passenger.
Speaker Change: And speaking in terms of price and service. So what we know today is that we are losing commercial opportunities.
Speaker Change: Due to the lack of capacity in some commercial areas specifically in terminal two.
Speaker Change: And that's why we.
Speaker Change: We are expanding in reconstructing them another one.
Speaker Change: That as I said before we are.
Speaker Change: Correcting to be open at the end of the second quarter 2026.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you. Our next question comes from the line of all that.
Speaker Change: With UBS. Please proceed with your question.
Speaker Change: Thank you and thank you for taking my question on mobile for one or two quick follow ups on my side to actually on your one on we see that you had some rebalance meant on Colombia.
Speaker Change: Ports of equal if you could provide a little bit off the table you balanced mix.
Speaker Change: And also something Alex.
Speaker Change: Oh Hello.
Speaker Change: Okay, right, so far how all hasn't been get trust to move passenger expectation. So far thank you very much.
Speaker Change: [noise] willing because of Columbia, and Puerto Rico, I would say they are working on they are getting great results.
Speaker Change: I am really surprised so the resilience of Puerto Rico, I was expecting traffic to became more normal.
Speaker Change: If you see the report on the cancelled January so still strong very strong.
Speaker Change: In Colombia of course, he's in the process to well it has gone through the process to break the two airlines, we looked at that at the beginning of 2023.
Speaker Change: So we are back on track and I hooked up Colombia.
Speaker Change: Continue.
Speaker Change: No more growth in.
Speaker Change: In the in the coming quarters.
Speaker Change: Yeah.
Speaker Change: No that's basically what I can say well the two cases.
Speaker Change: Thank you. Our next question comes from the line of Jens Spiess with Morgan Stanley. Please proceed with your question.
Speaker Change: Yeah. Thank you Adolfo.
Speaker Change: So just one question on capacity and and Ken Kun like under an hypothetical scenario where.
Speaker Change: International remains weak and there's an increase in in and capacity that the local domestic airlines.
Speaker Change: One to increase to Cancun are there any constraints in the terminals, where you service that the national carriers or would you be able to allocate or would you need to reallocate.
Speaker Change: Basic basically that your operations there yeah any color on that I appreciate it.
Speaker Change: Absolutely.
Speaker Change: To date, we do not have.
Speaker Change: Yeah.
Speaker Change: Restrictions in terms of operational capacity and similar to what we have these restrictions in the nonmetal not becomes side.
Speaker Change: Yeah, the capacity I would say in the case of the meet a little bit they probably you will not find this space to have your meal.
Speaker Change: But in the case of the personal front and we do not have programs of course.
Speaker Change: Once blends with keep rate.
Speaker Change: Yes.
Speaker Change: Operations from the problem they have with Brooklyn, we'd need we will need more capacity and that's why we are constructing spending 10 minutes when you didn't have to.
Speaker Change: What we havent.
Speaker Change: Basically.
Speaker Change: <unk> South America. So what we're intending to do is to subtract Central America and moved back to one and that will leave additional space for these dwellings.
Speaker Change: Yeah.
Speaker Change: Alright, perfect. Thank you.
Speaker Change: Youre welcome.
Speaker Change: Yeah.
Speaker Change: Thank you ladies.
Speaker Change: Ladies and gentlemen, as a reminder, if you'd like to join the question queue. Please press star one on your telephone keypad.
Speaker Change: Our next question comes from the line of Alan Let's see let's see with Bank of America. Please proceed with your question.
Alan: Hi, good morning. Thank.
Speaker Change: Thank you for the call just the core.
Speaker Change: <unk>.
Speaker Change: Mexican tariffs were you able to.
Speaker Change: <unk> and <unk>.
Speaker Change: Last year.
Speaker Change: Is there any spillover that we might see for this year. Thank you.
Speaker Change: Hi, Good morning, I cannot hear you.
Speaker Change: Chinese coking, so you'd be kind of repeat your question. Please.
Speaker Change: Okay.
Speaker Change: Yes, that's great can you hear me better.
Speaker Change: Better.
Speaker Change: Yeah, just on Mexican tariffs.
Speaker Change: We're able to implement that increased in 2024.
Speaker Change: And if we might expect some spillover for this year on Mexican tariffs. Thank you.
Speaker Change: It was basically implemented and lumpier.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Thank you. Our next question comes from the line of NK cell phone with Wonder Mentha investments. Please proceed with your question.
Speaker Change: Hello, there. Thanks for taking my question. My question is actually related to the passenger growth. It's about double click on some things you mentioned as you referred for life just they sit in their earnings call that they expect GTS issues.
Speaker Change: Pushing out their fleet to hold throughout the 25 to six seven.
Speaker Change: Andy.
Speaker Change: Again could you repeat your question please.
Speaker Change: Sorry, It seems that was lost and then well move to the next question.
Our next question comes from the line of Gabriel Himmelfarb with Scotiabank. Please proceed with your question.
Speaker Change: Okay.
Gabriel Himmelfarb: Hi, Evan thanks for the.
Speaker Change: Question on the loan is there any is somehow.
Speaker Change: After it didn't make any sense, sorry, compensating mechanisms for the traffic that is being taken from the loom Airport.
Speaker Change: From conclusion, thank you.
Speaker Change: Hi, Gabriel I put them up quality compensation because at the end of the day. If you go back to their regular routine Douglas probably sort of October 19 2023.
Speaker Change: And the Formula.
Speaker Change: He is looking forward not looking backward.
Speaker Change: Of course.
Speaker Change: The effects of the New airport were included in those calculations so yeah.
Speaker Change: To give you a very clear answer your responses yes.
Speaker Change: It has been included the effects of dilution.
Speaker Change: But of course, we cannot compensation.
Speaker Change: So they were included on the M depend less serious MVP.
Speaker Change: Absolutely.
Speaker Change: Thanks.
Speaker Change: Thank you very much.
Speaker Change: Youre welcome.
Speaker Change: Thank you. Our next question comes from the line of Anne Martin Carter with GBM. Please proceed with your question.
Speaker Change: High level for things you for the call and congrats on the results I'm sorry. If this has already been asked I have somebody just with my line, but my question is related to the commercial side I mean, we saw really good performance something on the idle per Pax growth.
Speaker Change: I was wondering I mean.
Speaker Change: Is this a result of the mix from having maybe a stronger U S dollar and maybe some pent up demand or something or.
Speaker Change: Also if there has been any.
Speaker Change: I thought that you could shift in how you renew your contracts, maybe a little bit of pricing power on that side I'm not sure. If you could provide some color there.
Speaker Change: Absolutely.
Speaker Change: It has to do with the D effects you can see it's very clear during the fourth quarter results.
Partially and then when they took one last year restricted because we saw some kind of peso devaluation seems a little bit.
Speaker Change: But of course, the most important effect was in the fourth quarter.
Speaker Change: Yeah.
Speaker Change: That's basically what we what we have with a pool what are some effects good results.
Speaker Change: No question about it.
Speaker Change: But I don't see any problem for the future except that we know that we are losing commercial to produce them.
Speaker Change: And also just a little bit of a follow up there at all for.
Speaker Change: Roughly what amount of your commercial contracts, although each year and are you able to renew with them with I mean, maybe open terms or or outdoors.
Speaker Change: With maybe fixed terms or another robotic false or something like that.
Speaker Change: Well, yes.
Speaker Change: That is no.
Speaker Change: As a way to say that this year, 20% of the contracts will expire.
Speaker Change: Yeah.
Speaker Change: Every business line has its own.
Speaker Change: Tim I would say it could go from seven to three years, depending on the business line.
Speaker Change:
Speaker Change: Normally what we do is to continue with the same kind of.
Speaker Change: At Tims.
Speaker Change: Increasing as you have mentioned increasing prices increasing the concession fees.
Speaker Change: The way to maximize the revenues and so on.
Speaker Change: <unk> remember that.
Speaker Change: What we want these days.
Speaker Change: So more and we get more so in that sense.
Speaker Change: The most important thing is to.
Speaker Change: To be able to.
Speaker Change: Okay.
Speaker Change: Get as much as we can in terms of.
Speaker Change: Sales not in terms of prices.
Speaker Change: Perfect that's really clear thank you.
Speaker Change: You're welcome.
Speaker Change: Yes.
Speaker Change: Thank you. Our next question comes from the line of Mendez with G. I'm, sorry, J P. Morgan one moment.
Speaker Change: Please proceed with your question.
Speaker Change: Hey, Adolfo Thanks for taking the question first one it's a follow up on too long you said. He was included on the MVP, but can you share how its training when compared to your expectations, it's going in line or not.
Speaker Change: And the second one in terms of kept hold location. There was some some news on the Dominican Republic can ask that last year I understand is still on hold.
Speaker Change: And if there's anything else that.
Speaker Change: The company would be close here outside of Mexico. Thank you.
Speaker Change: Yeah.
Speaker Change: He is in the case of domain what it can say to you is he says respected basically probably.
Speaker Change: Yeah.
Speaker Change: No.
Speaker Change: So struggle no let me say this year probably.
Speaker Change: Originally you were expecting around 3 million I'm, saying too.
Speaker Change: $2 9 million for this year and that will be the ramp up to move to the front book.
Speaker Change: 20, <unk> 25 from there.
Speaker Change: <unk> will have to go ask are the dynamics of the region.
In the case of Dominican Republic.
Speaker Change: We do not have any update we continue with a legal process that.
Speaker Change: I hope that we will have some results.
Speaker Change: During this year.
Speaker Change: Okay. Thank you and just to confirm anything else outside Mexico and outside Dominican Republic kit that you would consider.
Speaker Change: Well of course, we.
Speaker Change: We want to consider all we review all of the projects that are there, but for the moment I would say.
Speaker Change: I do not have any significant project in front of me in the short term.
Speaker Change: Perfect. Thanks, very much at all.
Speaker Change: Youre welcome.
Speaker Change: Thank you. Our next question comes from the line of Andrew J Soho was fundamental investments. Please proceed with your question.
Speaker Change: Apologies my line, chopped, where you're able to listen to me.
Speaker Change: No actually I can hear you.
Speaker Change: Okay. Thank you and my question is actually kind of a double click on some things you mentioned and more specific people. Larry. So she was she mentioned yesterday, stating your earnings call that you're going to have GTS engines produced your next jump of sleep 2007.
Speaker Change: And they have Moreover.
Speaker Change: Oh shaped aircraft, if they wish with Airbus to further slowdown kind of steady increases.
Speaker Change: This new information significant thinking there's growth in the short to medium term do you think it may be indicative for far more weight.
Domestic market and players thank you.
Speaker Change: Yes, I think it will.
Speaker Change: What is important for us is the additional capacity they aren't including as we speak not just the milestones in that case.
Speaker Change: So veeva in the case of Mexico.
Speaker Change: If youll see the reportable items of course, I'm not so sure that what they report.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Operational aircrafts, but you'll see the report at the end of 2023.
Speaker Change: <unk> hundred 30.
Speaker Change: At the end of 2024, the reported $1 43, so it was just.
Speaker Change: Two numbers.
Speaker Change: When we say they have more aircrafts.
Speaker Change: In comparison to what they had before.
And Whitney.
Speaker Change: The problem with those two numbers is that we don't know how many of those.
Speaker Change: In.
Speaker Change: In the shop.
Speaker Change: Also it has been announced yesterday by then.
Speaker Change: Some of the aircrafts that have already been recall will have to grow again.
Speaker Change: Yeah.
For some additional works.
Speaker Change: So that is why.
Speaker Change: I said during my remarks that next year, we will see.
Speaker Change: The problem with field there.
Speaker Change: Of course in.
Speaker Change: In a more smaller.
Speaker Change: Manner no.
And my expectation is that.
Speaker Change: The first three quarters are going to be the lapses from effects from Pratt <unk> Whitney and the case of Polaris.
Speaker Change: Great. Thank you very much.
Speaker Change: Youre welcome.
Speaker Change: Thank you, ladies and gentlemen, as a final reminder, if you'd like to ask a question. Please press star one on your telephone keypad will pause a moment to allow for any other questions.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Mr. Castro. It seems there are no other questions at this time I'll turn the floor back to you for any closing comments.
Adolfo Castro: Thank you Melissa and thank you all.
Speaker Change: <unk> again for joining us.
Adolfo Castro: Today for these fourth quarter.
Adolfo Castro: 2024 conference call, we wish you a good day and Goodbye now you may disconnect.
Adolfo Castro: Yes.
Adolfo Castro: Thank you ladies and gentlemen. This concludes today's conference call you may now disconnect your lines.