Q1 2025 LATAM Airlines Group SA Earnings Call

Operator: Hello, everyone, and thank you for standing by. Hello everyone, and a warm welcome to the LATAM Airlines Group First Quarter 2025 Earnings Conference Call. Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives, and expected performance or guidance, are forward-looking statements.

Hello, everyone and thank you for standing by.

Speaker Change: Last time Airlines Group Q1, 2025 earnings conference call will be beginning shortly we thank you for your patience and your call will begin soon.

Speaker Change: [music].

Speaker Change: Hello, everyone and a warm welcome to the lifetime Airlines group's first quarter at 2025 earnings Conference call.

Speaker Change: Before I turn the call over to management I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations and as such constitute forward looking statements.

Speaker Change: Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans objectives unexpected performance all guidance are forward looking statements.

Operator: These statements are based on a range of assumptions that LATAM believes are reasonable, but are subject to uncertainties and risks that are discussed in detail in the published 20-F, 2025 updated guidance, earnings release, financial statements, and related CMF and SEC filings. The company's actual results may differ significantly from those projected or suggested, and any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. If there are any members of the press on the call, please note that for the media, this is a listen-only call. I will now hand over to CFO Ricardo Botas. Please go ahead.

Speaker Change: These statements are based on a range of assumptions that lifetime believes are reasonable but are subject to uncertainties and risks that are discussed in detail in the published 20-F, 'twenty 'twenty five updated guidance earnings release financial statements and related CNS and SEC filings.

Speaker Change: The company's actual results may differ significantly from those projected or suggested and any forward looking statements due to a variety of factors, we should be which are discussed in detail in our SEC filings.

Speaker Change: And if there are any members of the press on the call. Please note that for the media. This is a listen only call.

Speaker Change: I will now hand over to CFO Ricardo Bottas. Please go ahead.

Ricardo Botas: Thank you. Hello everyone, and good morning. Welcome to our Q1 2025 conference call. Thank you all for joining us today. My name is Ricardo Botas. I am the CFO of LATAM Airlines Group. Here with me is Roberto Alvo, our CEO, Andrés del Valle, Corporate Finance Director, and Tori Craig, Head of Investor Relations. We will present our highlights and results for this Q1. Once finished, I will present them in more detail alongside the financial results.

Speaker Change: Thank you Hello, everyone and good morning, welcome to our first quarter 2025 conference call and thank you all for joining US today My name is Carl water.

Speaker Change: The third one.

Speaker Change: Here with me cause Warburg law whoever.

Craig: Oh, that'd be lovely corporate finance director and toward Craig.

Craig: Hello, Investor Relations and we will present, our highlights our results for the first quarter.

Craig: I'll hand, it over to Roberto to sure opening remarks, the bulk of the quarters highlights.

Craig: Are you prevent them in more detail alongside the financial results.

Roberto Alvo: Good morning, everyone, and thank you for joining us today. This quarter marked a strong start to the year for LATAM Group. The group transported over 21 million passengers and expanded capacity by 7.3% year-over-year, all while maintaining healthy load factors across our network. On the financial front, we delivered record profitability with adjusted EBITDA reaching nearly $1 billion, a record for the company. Both operating and EBITDA margins are at their highest levels to date. Net income totaled $355 million, up 38% year-over-year. The strongest Q1 result in LATAM's history. Behind these results is a commitment to our customers. The group has continued to invest in elevating the travel experience from modernizing cabins and expanding Wi-Fi connectivity across the fleet to enhancing digital services and operational reliability.

Roberto: Good morning, everyone and thank you for joining us today.

Craig: This quarter marked the strong start to the year for NASDAQ.

Speaker Change: Mhm transported over 21 million passengers and expanded capacity by seven 3% year over year, all while maintaining healthy load factors across our network.

Craig: On the financing front, we delivered record profitability.

Craig: Adjusted EBITDA, reaching nearly 1 billion Boners a record for the company and both operating and EBITDA margins are the highest levels to date.

Craig: Net income totaled $355 million up 38% year over year and the strongest first quarter, we sold in that time.

Craig: History.

Craig: Hi. This is results it's a commitment to our customers. The group has continued to invest in innovating your travel experience from other 19 Caribbean can expanding Wifi Wifi connectivity.

Craig: So enhancing digital services and operational reliability.

Roberto Alvo: These are not one-off improvements, but part of a consistent strategy to offer a better, more connected, and more personalized journey. This is the core of our value proposition, to be the airline of choice in South America, not only because of the breadth of our network, but because the LATAM Group delivers a superior experience across every step of the journey. It is in large part possible due to the hard work of all 39,000 LATAM Group employees that are committed to this shared purpose. Operationally, the group continued to execute with discipline, growing capacity while maintaining healthy load factors across all markets. Customer satisfaction reached record levels, confirming the progress made in elevating our travel experience. On the financial side, LATAM delivered outstanding results, supported by revenue growth, cost control, and favorable fuel dynamics.

Craig: These are not one off improvements the part of our strategy to offer a better more connected and more pressured a nice sturdy.

Craig: This is the core of our value proposition.

Craig: The airline of choice in South America, not only because of the breadth of our network.

Craig: Cause the Latam group delivers a superior experience across every step of the journey.

Craig: It is in large part possible due to the hard work.

Craig: Of all 39000 that that group of employees that are committed to these groups.

Craig: Operationally the group continued to execute with discipline growing capacity, we're maintaining shelf load factors across all markets.

Craig: <unk> reached record levels, confirming the progress made and innovating our travel experience.

Craig: On the financial side, let them delivered outstanding results supported by revenue growth cost control and favorable dynamics profitability reached record levels for our first quarter, reflecting the strength of our business model.

Roberto Alvo: Profitability reached record levels for our Q1, reflecting the strength of our business model. Furthermore, following continued cash generation, LATAM is in a position to carry out shareholder return-focused capital allocation initiatives. Shareholder approved distribution of dividend, and LATAM has launched its first ever share repurchase program, signaling management's belief in that current stock price is undervalued. In parallel, we recently announced that the relevant authorities have approved the inclusion of Argentina within the scope of our joint venture agreement with Delta Air Lines, further strengthening our strategic partnership. Looking ahead, we're raising our full year guidance, reflecting our strong financial performance and the confidence in our outlook. This update is supported by the group's operational flexibility and cost containment abilities, as well as continued demand strength observed across the group's domestic and international markets.

Craig: Furthermore, following continued cash generation that I mentioned are positioned to Terry.

Craig: Shareholder return focused capital allocation initiatives.

Craig: The approved distribution of dividend and that has left its first ever share repurchase program signals managements belief that current stock price is undervalued.

In parallel we recently announced that the relevant authorities have approved the inclusion of Argentina within the scope of our joint venture agreement with Delta Airlines.

Craig: Strengthening our strategic partners.

Craig: Looking ahead, we're raising our full year guidance, reflecting our strong financial performance and the confidence.

Craig: This update is supported by the group's operational flexibility and cost containment abilities as well as continued demand strength observed across the group's domestic and international markets.

Roberto Alvo: Particularly, booking trends for the Q2, historically the seasonally weakest, remain very healthy and are better than the levels observed at the same point last year. We also see a favorable competitive environment across our core markets, where LATAM Group is strengthening its network and capturing demand opportunities. Having said all that, we're aware that we face a dynamic macroeconomic environment. LATAM is not exempt from global challenges, including fuel price volatility, geopolitical uncertainty, foreign exchange fluctuations, potential disruptions in cross-border traffic of goods, and potentially slower global economic activity. We're actively tracking developments, and we're working on taking measures to minimize potential effects. Should they occur, we reserve the right to change or suspend our guidance in case developments have an effect that merits it.

Craig: Particularly booking trends for the second quarter, but historically the season.

Craig: So Natalie weakest.

Craig: Very healthy and are better than the levels of share at the same point last year.

Craig: Youll see a favorable competitive environment across our core markets, where Latam group has strengthened its network and capturing demand opportunity.

Craig: Having said all of that we are aware that we faced a dynamic macroeconomic environment.

Speaker Change: No time newsletter.

Speaker Change: From a global challenges, including fuel price volatility geopolitical uncertainty.

Speaker Change: This change to the patients potential disruptions from cross border capital goods and potentially slower global economic activity.

Speaker Change: We're actively tracking development and we're working on taking measures to minimize potential effects mediocre, we reserve the rights to change or suspend our guidance in case development.

Roberto Alvo: Nonetheless, a strong capital structure, a diversified revenue base, a broad, flexible network, and the relative advantages that LATAM Group has are key pillars that allow us not only to deliver strong results today, but also to be well-prepared for the uncertainties of tomorrow. Thank you for your time. I'd like to turn the call over to Ricardo to further discuss the operational and financial results.

Speaker Change: Veterinary.

Speaker Change: Nonetheless, our strong capital structure.

Speaker Change: Diversified revenue base.

Speaker Change: Abroad, flexible network and the relative advantages that the Tam group.

Speaker Change: I'll keep meters that allow us not only to deliver strong results today, but also to be well prepared for the uncertainties of tomorrow.

Speaker Change: Thank you for your time I'd like to turn the call over to Ricardo to further discuss the operational and financial results.

Ricardo Botas: Thank you, Roberto. Let's move to the next slide 4. In terms of operational performance, LATAM Group continues to show solid year-over-year growth across all segments. During Q1, as Roberto just mentioned, the group transported over 21 million passengers, representing an increase of 3.6% versus the same period in 2024. Capacity in ASKs grew by 7.3%, supported mainly by international operations, which expanded by 10.7% year-over-year, confirming our ability to allocate capacity strategically in high-demand markets. Load factors remained healthy across all segments, with the consolidated load factor reaching 83.3%. In terms of consolidated revenues per ASK, we observed a 5.3% decrease year-over-year, basically related with the currency depreciation in some of our key domestic markets and capacity increase in our international operations.

Ricardo Bottas: Thank you Roberto so let's move to slide the next slide slide four in terms of operational performance, Let's say group continues to show solid year over year growth across all segments during the first quarter.

Ricardo Bottas: Go back to just mentioned then the groups are supported over 21 million passengers, representing an increase of three 6% versus the same period in 2010 before capacity.

Ricardo Bottas: <unk> grew by seven 3% supported mainly by international operations, which expanded by 10, 7% year over year, confirming our ability to allocate capacity through these during high demand markets.

Ricardo Bottas: Load factors remain at healthy across all segments with the consolidated load factor reached 83, 3%.

Ricardo Bottas: In terms of consolidated revenues there as we observe it up five.

Ricardo Bottas: Percent decrease year over year basically related with the curious depreciation and some of our key markets.

Ricardo Bottas: The increase in our international operations.

Ricardo Botas: In Brazil, although RAS decreased by -12.4% in dollar terms impacted by foreign exchange, when we look at the performance in local currency, we see a positive trend with domestic Brazil RAS increase by +3.9%, reflecting resilient demand and stable pricing in these relevant markets. The Spanish-speaking countries posted an +11% RAS increase in local currency. This performance reinforced the strength of LATAM Group diversified network and its ability to balance out localized volatility, maintaining profitability through strategic geographic exposure. Turning to the next slide 5, the financial results achieved underscore the group's ongoing commitment to enhancing customer satisfaction. As of the end of the quarter, LATAM Pass, our largest program, reached a milestone, having now over 50 million members.

Ricardo Bottas: In Brazil, although RASK decreased by 12, 4% in dollar terms impacted by foreign exchange when we look at the performance in local currency, we see a positive trend with the math, Brazil, RASK increase by three 9%, reflecting a resilient demand and stable pricing in these rather than.

Ricardo Bottas: Markets.

Ricardo Bottas: The Spanish speaking countries posted an 11% increase in local currency.

Ricardo Bottas: Performance reinforced the strength of Lufthansa group diversified network and its ability to balance our localized volatility maintaining profitability through strategic geographic exposure.

Ricardo Bottas: Turning to the Max does lag slide five the financial results achieved underscore the group's ongoing commitment to enhancing customer satisfaction.

Ricardo Bottas: As of the end of the quarter Latam pass our life program reached the milestone having now over 15 million members.

Ricardo Botas: In 2025, LATAM Pass now offers an innovative experience with more options for earning and redeeming miles and greater ease of access to elite status, as well as the opportunity to customize rewards as members reach intermediate milestones. These enhancements are aimed at increasing engagement to reward and incentivize member activity throughout the year. With regard to our fleet, almost 90% of the narrow-body fleet has been equipped with Wi-Fi. In parallel, the cabin retrofit program continues to advance, with 100% of the narrow-body fleet operating domestic and international intra-South America flights already incorporating premium economy cabins and reaching 61% of the wide-body fleet with upgraded aircraft interiors to offer a more modern, comfortable, and connected travel experience to our customers. In addition, in April, LATAM Group launched the new business class suites for its wide-body fleet.

Ricardo Bottas: In 2025, let them pass now offers an innovative experience with more options for earning and redeeming miles a greater easy access to early stages.

Ricardo Bottas: As well as Theyre presented to customize rewards member reached intermediate milestones.

Ricardo Bottas: These enhancements are aimed at key.

Ricardo Bottas: Our aiming at increasing engagement to reward and incentivize member activity throughout the year.

Ricardo Bottas: With regards to our fleet almost 90% of the narrow body fleet has been equipped with Wi Fi and Paolo the capping a retrofit program continues to advance with 100% of the narrow body fleet operating domestic and international into South America, like a rabbit incorporating premium economy cabin and reaching six.

Ricardo Bottas: Two 1% up the widebody fleet with upgraded aircrafts with theatres to offer a more modern comfortable and connect the travel experience to our customers. In addition in April at Semgroup allowance of the new business class seats for a widebody fleet. These new offerings elevates the comfort even quarter by introduce.

Ricardo Botas: This new offering elevates the comfort even further by introducing suite doors, the first of its kind in South America for a world-class product with full privacy. The group recently launched its new signature check-in experience in the Santiago de Chile International Airport, aimed at providing a faster, more personalized, and seamless services for premium passengers. We have also announced an investment for a new launch at Guarulhos Airport in São Paulo to be open in 2027. As a result of these ongoing investments, customer satisfaction continued to improve. In Q1, our NPS reached 56 points, the highest in LATAM's history, and 61 points among premium travelers. This improvement in satisfaction is delivering concrete financial benefits. In Q1, the revenue contribution from premium travelers increased by 7% compared to the same period in 2024. Moving on the financial results on slide 6.

Ricardo Bottas: <unk> suites doors, the first off with Sky and in South America for a world Class group.

Ricardo Bottas: World Class Province, with a full privacy.

Ricardo Bottas: The group recently launched its new Signup through check in experience seem to Santiago de Chile International Airport, aiming at providing a faster and more personalized and seamless services for premium passengers. We have also analysis and investment for a new lounge at <unk> Airport in Sao Paulo to be opened in 2027.

Ricardo Bottas: As a result of these ongoing investments customer satisfaction continue to improve.

Ricardo Bottas: In the first quarter, our <unk>, yes, we can.

Ricardo Bottas: 56 points, the highest lepton Easter at 61 point somewhat premium travelers. This improvement in satisfaction is delivering concrete financial benefits.

Ricardo Bottas: In the first quarter the revenue contribution from premium travelers increased by 7% compared to the same period in 2024.

Ricardo Bottas: Moving onto the financial results on slide six six plus.

Ricardo Botas: Total revenues reached $3.4 billion, a 2.7% increase year-over-year, supported by stable passenger demand. Passenger revenues increased by 1.6%, and cargo revenues grew almost 10%. On the cost side, the group continues to improve efficiency and deliver cost discipline. Adjusted costs ex-fuel increased by only 1.6%, despite a 7.3% increase in capacity, reflecting strong cost containment efforts and productivity gains across the operation, together with a slight benefit from currency depreciation in some of our key markets like Brazil, which helped reduce the dollar-denominated portion of our cost base. These combined effects allowed us to maintain our unit cost base ex-fuel at competitive levels. The execution of our cost containment strategy was a key driver of margin expansion, which, combined with a 4.9% year-over-year decline in jet fuels costs, even as capacity increased, played a central role in delivering this quarter record margin performance.

Ricardo Bottas: Our revenues reached $3 $4 billion up $2 seven increased two 7% increase year over year supported by stable passenger demand.

Ricardo Bottas: <unk> revenues increased by one 6% and cargo revenues grew almost 10%.

Ricardo Bottas: The cost side, the group continues to improve efficiency and delivered cost discipline adjusted costs ex fuel increased <unk>.

Ricardo Bottas: By only one 6% despite the seven 3% increase in capacity, reflecting strong cost containment efforts and productivity gains across the operation together with a slight benefit from currency depreciation in some of our key markets like Brazil, which helped reduce the dollar denominated portion.

Ricardo Bottas: <unk> of our cost base these combined effects, allowing us to maintain our unit cost base ex food at competitive levels.

Ricardo Bottas: The addition of our cost containment strategy was a key driver of margin expansion, which combined with a four 9% year over year decline in gas whose cost.

Ricardo Bottas: Even if capacity increased play a central role in delivering this quarter.

Ricardo Bottas: Court records matching before us.

Ricardo Botas: Adjusted EBITDA reached $962 million, representing a 20.9% increase compared to the same quarter last year, while adjusted EBITDA margin expanded by 4.3 percentage points to 28.2%, a clear sign of improved operating leverage and efficiency. Net income was $355 million, a 37.6% increase year-over-year, marking the highest Q1 profit in LATAM's history. Net income margin reached 10.4%, up more than 2.6 percentage points compared to Q1 2024. These results confirm the execution of the strategy, which combines profitable growth, continued focus on efficiency and cost control, strong operating margins, and solid return on capital. On the next slide 7, following the strong margin performance we saw this quarter, it is important to highlight that LATAM cost discipline is not new. It is the result of a consistent long-term approach that is embedded in our daily operations and our yearly goals.

Ricardo Bottas: Adjusted EBITDA reached $962 million, representing 29% increase compared to the same quarter of last year.

Ricardo Bottas: Adjusted EBITDA margin expanded by four three percentage points to 28, 2%, a clear sign of improving operating leverage and efficiency that.

Ricardo Bottas: Net income was $355 million or 37, 6% increase year over year, marking the highest fire.

Ricardo Bottas: Marketing the highest first quarter profit and loss history, and net income margin reached 10, 4% up more than two six percentage points compared to the first quarter of 2024.

Ricardo Bottas: The results confirm the diffusion of the strategy, which combines profitable growth continued focus on efficiency and cost control and strong operating margins and solid solid return on capital.

Ricardo Bottas: So on the next slide slide seven following the strong margin performance, we saw this quarter and important to highlight that let them cost discipline is not new.

Ricardo Bottas: The result of our consistent long term approach that's embedded in our daily operations and our yearly goals over the years, we have implemented the structural cost a strategy grounded in Q3.

Ricardo Botas: Over the years, we have implemented a structural cost strategy grounded in three pillars: digital and data-driven tools, business simplification, and a more efficient, flexible fleet. These efforts and the commitment from our team have allowed us to sustain a stable unit cost base through changing environments. While local currency depreciation has provided a modest tailwind, our ability to consistently contain unit costs over time is primarily the result of disciplined execution and structural efficiencies. As a result, adjusted passenger CASK ex-fuel has remained stable over time, reaching $0.040 in Q1 2025, and $0.041 on the last 12 months, reinforcing our ability to deliver sustainable growth, invest in customer experience, and improving our NPS. Now moving to slide 8. Looking now at our trailing 12-month performance, LATAM continues to build on its consistent financial momentum.

Ricardo Bottas: These forward in depth are driven to business and business simplification and a more efficient flexible fleet.

Ricardo Bottas: This before and the commitment from our team have allowed us to sustain a stable.

Ricardo Bottas: Unit cost base through changing environments.

Ricardo Bottas: Local currency depreciation has provided a modest pay you when our ability to consistently contain unit cost over time is primarily the result of disciplined execution and the structural efficiencies as a result, adjusted bathroom stack pool has remaining stable.

Ricardo Bottas: Her time, reaching for <unk> fast bowler stance in Q1.

Ricardo Bottas: One 2025 and $4. One then on the last 12 months reinforcing our ability to deliver sustainable growth investing in customer experience and improving our NPS.

Ricardo Bottas: Now moving to the slide.

Ricardo Bottas: Great.

Ricardo Bottas: Looking now at our trailing 12 months performance Latam continues to build on this consistent financial momentum adjusted EBITDA over the last 12 months reached $3 3 billion showing steady growth quarter. After quarter. This represents not only the strongest the strongest EBITDA.

Ricardo Botas: Adjusted EBITDA over the last 12 months reached $3.3 billion, showing steady growth quarter after quarter. This represents not only the strongest EBITDA in our recent history, but also a clear sign of the long-term sustainability of our business model. We have seen this improvement driven by multiple factors: a healthy demand environment, disciplined cost execution, and ongoing optimization of our network and fleet. This level of recurring profitability enables us to continue investing in customer experience, fleet growth, and upgrades and sustainability, all while maintaining strong liquidity and delivering value to shareholders. Turning to cash generation on slide 9. Next slide. LATAM delivered another quarter of solid performance, reinforcing our ability to self-fund growth while preserving financial strength. In the Q1, LATAM generated $189 million in net cash, bringing our ending cash balance to $2.1 billion.

Ricardo Bottas: Our recent the history, but also a clear sign of the long term sustainability of our business model.

In this improvement driven by multiple factors a healthy demand environment disciplined cost is the Houston and ongoing optimization of our network and fleet.

Ricardo Bottas: This level of recruiting.

Ricardo Bottas: <unk> profitability enables us to continue investing in customer xps fleet growth and upgrades and sustainability, all while maintaining strong liquidity and delivering value to shareholders.

Ricardo Bottas: Turning to cash generation on slide nine next slide Latam delivered another quarter, but quarter of solid performance reinforcing our ability to self fund growth, while preserving financial strength.

Ricardo Bottas: In the first quarter, Latam generated $189 million and net cash, bringing our ending cash balance to $2 $1 billion.

Ricardo Botas: Our positive cash generation is driven by strong adjusted operating cash flow of almost $600 million, 40% higher than in Q1 2024, and disciplined capital management. During the quarter, we continue investing in fleet growth and maintenance while covering our interest expenses and financial obligations. The uptick in growth CapEx this quarter reflects the acquisition of 6 A321 aircraft, previously registered as operating leases. This purchase is in the process of being refinanced, which will offset the associated cash impact once completed in the upcoming quarters. Additionally, it's important to mention that we began to see the benefits of the bond refinance executed in October 2024, which contributes to lower interest expense. Financial debt interest payments during the quarter were $43 million lower when compared with Q1 2024.

Ricardo Bottas: Our positive cash generation is driven by strong adjusted operating cash flow of almost $600 million.

Ricardo Bottas: 40% higher than in the first quarter of 2024 and disciplined capital management.

Ricardo Bottas: During the quarter, we continued investing in fleet growth in maintenance, while covering our interest expenses and financial obligations.

Ricardo Bottas: The uptick in growth Capex. This quarter reflects the acquisition of 6321 aircrafts previously resistant as operating leases. This will chase is in process of being refinanced.

Ricardo Bottas: Which will offset the associated cash impact almost completed in the upcoming quarters.

Ricardo Bottas: Additionally, it is important to mention that when you began to see the benefits of the bond refinancing as it did in October of 2024, which contributes to lower interest expense.

Ricardo Bottas: Financial debt interest payments during the quarter were $43 million lower when compared with the first quarter of 2024. As we look ahead. We are confident that our operations, we remain generating cash throughout the year, providing the flexibility to support just with these key initiatives reinvest in the business.

Ricardo Botas: As we look ahead, we're confident that our operations will remain generating cash throughout the year, providing the flexibility to support the strategic initiatives, reinvest in the business, and return value to shareholders. Let's move now to slide 10 to discuss our capital structure, which remains one of LATAM's greatest strengths on both an absolute and relative basis. At the end of Q1, we reported liquidity of $3.7 billion, equivalent to 28.4% of last 12 months revenues, a level that places us well above our financial policy and our internal target range and provides significant flexibility to manage through cycles and capture future opportunities. In terms of leverage, we closed the quarter with an adjusted net leverage ratio of 1.5 times from 1.7 times late last year.

Ricardo Bottas: And return value to shareholders.

Ricardo Bottas: Let's move now to slide 10 to discuss our capital structure, which remains one of <unk> greatest strengths on both an absolute and relative basis.

Ricardo Bottas: At the end of the first quarter, we reported liquidity of $3 7 billion equivalent to 28, 4% off of last 12 months' revenues a level that place us well above our financial policy and our internal target range and provides significant flexibility to manage through cycle.

Ricardo Bottas: Calls and capture future opportunities.

In terms of leverage we closed the quarter with a not just a net leverage ratio of one five times from one seven times the late last year.

Ricardo Botas: This strong capital structure allow us to pursue a balanced financial strategy, investing in growth, enhancing our product and the customer experience, and returning capital to shareholders, all while maintaining robust credit metrics that have been consistently improving the last two years. Most recently, S&P and Fitch Ratings upgraded LATAM to BB, reinforcing the confidence the market has in the strategy of the company. We are also well-positioned in terms of debt maturities, with no material, no fleet maturities until 2029 and continued access to committed revolving credit lines. As we move forward, we will remain focused on protecting the solid financial position, while continuing to optimize the cost of capital and explore further financial opportunities. Moving to slide 11, and as a result of the strong liquidity position, LATAM has taken steps forward to return almost $450 million of capital to its shareholders.

Ricardo Bottas: These are strong capital structure allow us to pursue a balanced financial strategy.

Ricardo Bottas: Investing in growth enhancing our product and the customer experience and returning capital to shareholders.

Ricardo Bottas: We are maintaining a robust credit metrics that have been consistently improving the last two years.

Ricardo Bottas: Most recently S&P and Fitch ratings upgraded <unk> to double b reinforcing the confidence the market paths in the strategy of the company.

Ricardo Bottas: We are also well positioning in terms of debt maturities with no material non fleet maturities until 2000, and bentonite and continued access to committed revolving credit lines. As we move forward, we will remain focused on protecting the solid financial position.

Ricardo Bottas: We continue to optimize the cost of capital and explore for and financial opportunities.

Ricardo Bottas: Moving to slide 11.

Ricardo Bottas: As a result of the strong liquidity position, let them has taken steps forward to return almost $450 million of capital to shareholders on March 24, the company shareholders approved the distribution of a dividend totaling $293 million, which was paid in April.

Ricardo Botas: On 24 March, the company shareholders approved the distribution of a dividend totaling $293 million, which was paid in April. This payment corresponds to the legally required 30% minimum distribution under Chilean corporate law. In addition, LATAM received an approval to initiate a share repurchase program for up to 9.7 million shares, equivalent to 1.6% of the outstanding shares to be executed on the next 18 months. This program is currently being executed through a block mechanism on the Santiago Stock Exchange. The repurchase was launched for the total of 1.6% of the shares at a price of 1,502 Chilean pesos per share, which implies a potential distribution to shareholders close to $153 million, expected to be concluded tomorrow.

The statement correspond to the legally required at 30% minimum distribution under the Chilean corporate law. In addition lost their receiver and approval to initiate a share repurchase program for up to.

Ricardo Bottas: <unk> nine 7 billion shares equivalent to one 6%, but the outstanding shares to be executed on their next 18 months. These progress occurred at the beginning of the Q. This through a block mechanism on the 70 Atwood stock exchange E vapor Chase was allowances for the total of one 6% of the shares.

Ricardo Bottas: At a price off.

Ricardo Bottas: Shifting over to Chilean pesos per share, which implies a potential distributions to shareholders close to $153 million to be concluded to expect it to be concluded tomorrow.

Ricardo Botas: Together, these initiatives illustrate LATAM's balanced capital allocation strategy, combining disciplined investments in future growth with a consistent effort to deliver value to shareholders, supported by a strong balance sheet and liquidity levels. Let's now move to the slide 12. Please join me on the slide 12 for an important update. As LATAM Group enters Like Roberto mentioned at the beginning, we entered the next part of this year. The fundamental of the business remains solid, with a diversified and expansive network and flexible fleet, a competitive cost structure, and a robust capital position. LATAM is pleased to report that it has been closely monitoring bookings, and as of this day and during past weeks, passenger bookings trends and cargo sales have remained stable.

Ricardo Bottas: Together these initiatives illustrate balanced capital allocation strategy combined with disciplined investments in future growth with a consistent effort to delivering value to shareholders supported by a strong balance sheet and liquidity levels.

Ricardo Bottas: Let's now moving to the move to the desired. The 12. So please join me on this slide 12 for an important updates.

Ricardo Bottas: That group enters into.

Rebecca: Like Rebecca mentioned at the beginning.

Rebecca: We entered the next part of this year the fundamental of the business remains solid with a diversified and expensive met work and flexible fleet a competitive cost structure in the rockwood.

Rebecca: Capital position Lepton is pleased to report that we have been closely monitoring bookings and as off.

Rebecca: Right and doing past week passenger booking trends in cargo sales have remained stable.

Ricardo Botas: With this, LATAM is adjusting its guidance for the full year 2025, including its capacity and sales guidance, as well as guidance on key financial indicators, due to the strong results of this Q1 and the current stable demand environment. The company now expects adjusted operating margins between 13% and 15%, up from a range of 12% and 13.5% in the previous guidance issued on 3 December 2023. Together with this, LATAM forecasts an adjusted EBITDAR between $3.4 to 3.75 billion, up from $3.25 to 3.6 billion as compared to previous guidance for 2025. In terms of liquidity and capital structure, we are updating our expectations to close 2024 with an adjusted levered free cash flow above $1.2 billion, up from above $1 billion. An improvement on our liquidity levels from $3.9 to 4.1 billion.

Rebecca: With these updates adjusting.

Rebecca: Adjusting its guidance for the full year 2025, including its capacity and say with guidance as well as guidance on key financial indicators due to the strong results of this first quarter and the current stable demand environment.

Rebecca: The company now expects an adjusted operating margin between 13, 815% up from a range of 12 and 13, 5% in the previous guidance issued on December 3rd last year, together with beef Latam forecast and adjusted EBITDAR between three four and $3 75 billion.

Rebecca: <unk> up from 325 to $3 6 billion as.

Rebecca: Compared to previous guidance for 2024 25.

Rebecca: In terms of liquidity and capital structure, we are updating our expectations to close this year with the Mac just had levered free cash flow above $1 $2 billion from above $1 billion of improvement on our liquidity levels from $3 $9 billion to four now four four.

Ricardo Botas: Also reducing our forecasted adjusted leverage to be below 1.5 times from a previous guidance of below 1.7 times. However, the current scenario makes it very difficult to forecast the market's macroeconomic expectations and uncertainties, which could impact passenger and cargo demand due to potential tariff impacts. Any relevant change could affect international passenger and air freight demand from and to the United States, as well as passenger cargo demand in other regions, including to, from, and within Latin America. While we remain confident in our trajectory, we are mindful of evolving macroeconomic environments. We continue to monitor key external factors such as fuel prices, FX volatility, and geopolitical trends, and remain prepared to adapt with discipline and flexibility if needed. Before we move to the Q&A session, let me just briefly recap the main takeaways from the strong quarter on slide 13.

Rebecca: $1 billion and also reducing our forecasted adjusted leverage to be below one five times from our previous guidance of below one seven times. However.

Rebecca: However, the current scenario makes it very difficult to forecast the markets macroeconomic expectations, and uncertainties, which could impact passenger and cargo demand due to potential tariff impact any relevant change could affect international passenger and air freight demand from into the United States as well.

Rebecca: S passenger cargo demand in other regions, including two from and we've seen Latin America.

Rebecca: While we remain confident in our trajectory we are mindful of revolving macroeconomic environment. We continue to monitor key external factors such as fuel prices FX volatility and geopolitical trends and remain prepared to adapt with discipline and flexibility if needed.

Rebecca: Before we move to the Q&A session. Let me just briefly recap the main takeaways from these strong quarter only slide 13, we kicked off the year with solid momentum supporting over 21 million passengers in growing capacity by seven 3% a clear reflection of both operational agility in.

Ricardo Botas: We kicked off the year with solid momentum, transporting over 21 million passengers and growing capacity by 7.3%, a clear reflection of both operational agility and sustained demand across our network. On the financial front, we delivered record profitability with $355 million in net income and almost $1 billion in adjusted EBITDAR, supported by a profitable growth strategy, a continued cost discipline, and lower fuel costs. From a customer perspective, the group achieved the highest satisfaction scores to date, which speaks to the impact of our investment in fleet, onboard experience, digital services, and a strong commitment from the more than 39,000 employees of the group to deliver the best services and experience to our customers.

Rebecca: Sustained demand across our network on the financial front, we delivered record profitability.

Rebecca: With $355 million in net income and almost $1 billion of images to EBITDAR supported by our profitable growth strategy, our continued cost discipline and lower food costs.

Rebecca: From a customer perspective, the group achieved the highest satisfaction scores today.

Rebecca: It just speaks to the impact of our investments in fleet onboard experience b cell surfaces, and a strong commitment from the more than 39000 employees of the group to deliver the best services and experience to our customers at the same time, we reinforced our commitment to shareholders distributing 209.

Ricardo Botas: At the same time, we reinforced our commitment to shareholders, distributing $293 million in dividends and launching a share repurchase program for over $150 million, all while maintaining a solid balance sheet, a strong liquidity above $3.7 billion, and a healthy level of adjusted net leverage of 1.5 times. Lastly, LATAM's upward revision of its full-year guidance incorporates strong margin expectations supported by disciplined cost management and a stable demand environment. Let's now open the line for your questions, and thank you.

Rebecca: $3 million in dividend and launching a share repurchase program for over $150 million, all while maintaining a solid balance sheet strong liquidity above $3 7 billion and a healthy adjusted net leverage of one five.

Rebecca: <unk>.

Rebecca: And lastly, lepton upward revision of full year guidance incorporate incorporate strong marketing expectations supported by disciplined cost management and a stable demand environment that smell.

Rebecca: On the line for your questions and thank you.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question today, please do so now by pressing star followed by the number 1 on your telephone keypad. If you change your mind or you feel like your question has already been answered, you can press star followed by 2 to withdraw yourself from the queue. Our first question comes from Michael Linenberg with Deutsche Bank. Please go ahead, Michael.

Speaker Change: Thank you we will now begin the question and answer session and she would like to ask a question today. Please do so now by pressing star followed by the number one on your telephone keypad.

Speaker Change: If you change your mind or you feel like your question has already been answered you can press star followed by choose to withdraw yourself from the key.

Speaker Change: Our first question comes from Michael Lindenberg with Deutsche Bank. Please go ahead Michael.

Michael Linenberg: Good morning. Thanks. Two questions. Congrats on the really solid results. Roberto, I want to pose the first question to you. Just a few weeks ago, we had the IMF lower global GDP growth by 0.5%, in my professional career, I've never seen a revision of that magnitude. It's usually 0.1 to 0.2. We've seen airlines all around the world withdraw guidance, many guide to a much more challenging outlook, yet you took your numbers up. You took margins up. You took guidance up. I'm curious, how much of that is just a function of your primary market and your competition, the fact that the pressure that we're going to see on the global economy will be much more impactful to some of the weaker carriers?

Michael Lindenberg: Oh, Yeah, Hey, good morning.

Speaker Change: Two questions Congrats on a really solid results Roberto.

Michael Lindenberg: I want it.

Speaker Change: The first question to you.

Speaker Change: Just a few weeks ago, we had the IMF lower global GDP grows by a half a percent.

Speaker Change: In my professional career I have never seen a revision of that magnitude, it's usually want to keep.

Speaker Change: We've seen airlines all around the world withdraw guidance many guide too.

Speaker Change: Much more challenging.

Speaker Change: Outlook and yet.

Speaker Change: You took your numbers up you take margins up.

Speaker Change: Guidance.

Speaker Change: And I'm curious how much of that is just a function of your primary market and your competition and the fact that you know.

Speaker Change: With the pressure that we're going to see on the global economy.

Speaker Change: It will be much more impactful to some of the weaker carriers and I'm curious if that maybe your thinking here that.

Michael Linenberg: I'm curious if that may be your thinking here, that if things do slow down, it will impact everybody, but it will impact the weaker carriers disproportionately more so, creating more opportunities for someone like yourselves. The thinking that the rich get richer, is that underlying as you think about your forecast, that even if things slow, that LATAM will be able to do even better than the competition, because right now the only carrier out there who at least seems to be pointing to a better outlook versus most other carriers. Thanks.

Speaker Change: If things do slow down it will impact everybody, but it will impact the weaker carriers disproportionately more so creating more opportunities for someone like yourselves.

Speaker Change: And if the rich get richer is.

Speaker Change: Is that underlying as you think about your forecast that even if things slow that.

Speaker Change: Latam will be able to do even better than the competition.

Speaker Change: Because right now youre, the only carrier out there.

Speaker Change: So at least seems to be pointing to a better outlook versus most other carriers.

Speaker Change: Yes.

Roberto Alvo: Thanks, Michael. You said you had 2 questions. You want to ask the second one after I answer?

Speaker Change: Thanks, Michael You said you had two questions you want to ask the second one I'm, sorry, I'm sorry.

Michael Linenberg: Yeah. That's what I'll do. I'll do a quick second.

Speaker Change: Yeah, that's what ill do a quick second.

Roberto Alvo: All right. Great. Thanks. Thanks for the question. I think it's a really good question. A couple of comments. First, we have not seen to date, in our bookings or in our cargo revenues, any relevant impact from all the announcements and the news that we have seen from the Northern Hemisphere coming. I believe that on the one hand, our markets are not following necessarily the dynamics that you see in the US. We don't have dogs, for example. I think, in general, we haven't seen those trends, and we remain so far pretty isolated and relatively confident that even though this may impact us going forward and the world altogether. It doesn't look today and as per the bookings we have, but it's something that we are overly concerned in the short term.

Speaker Change: Great Alright, great. Thanks, and thanks for the question.

Speaker Change: Really good question.

Speaker Change: A couple of comments first time.

Speaker Change: We have not seen to date.

Speaker Change: In our bookings or in our cargo revenues any relevant impact from all the announcements on the news that we have seen from the.

Speaker Change: Northern industry comment.

Speaker Change: I believe that on the one hand, our markets are not following the necessarily the dynamics that you see in the U S. So we don't have dogs.

Speaker Change: For example, and I think.

Speaker Change: In general we haven't seen those strengths and we remain so far pretty isolated and relatively confident then even though these may impact us going forward the world altogether.

Speaker Change: He doesn't look today and that's principally because we have but it's something that we are overly concerning to shortly having said that of course. This can change and that's why we remain vigilant and to your point.

Roberto Alvo: Having said that, of course, this can change, and that's why we remain vigilant. To your point, yes, I would agree with you in general. Let me say something important here. You see growth in our forecast there. The important thing is we don't chase market share. We chase growth where we can win. We are very specific and targeted in finding our strengths and investing where our strengths are. I do believe today that we have something I like to call relative advantage, which is the strength of our numbers vis-a-vis the rest of the industry, and particularly in the region. Even though the uncertainty may affect the industry in general, I think that LATAM has positioned itself, both from a financial perspective and from a network perspective, in the right place to take advantage of volatility.

Speaker Change: Yes, I would agree with you in general, but can you maybe say something important do you see growth in our forecast here, but important thing is we don't chase market share, we chase growth, where we can win.

Speaker Change: So we are very specific and targeted in finding our strengths and investing where our strengths that I do believe today that we have something I like to call. It.

Speaker Change: Relative advantage, which is just trying to up our numbers vis vis the rest of the industry.

Speaker Change: In the region, so even though.

Speaker Change: You can check with EMEA SA.

Speaker Change: The industry in general I think the bed hospital system itself.

Speaker Change: From a financial perspective, and from a network perspective.

Speaker Change: In the right place to take advantage of volatility so even though we remain cautious in terms of the overall lead times that these may have.

Roberto Alvo: Even though we remain cautious in terms of the overall impact that this may have, we have the ability today to be very targeted in where we grow and how we improve our network and our position further. I believe that's one of the key advantages that we have created over the last 2 years, which we expect to exploit if the conditions are right.

Speaker Change: We have the ability today to be very targeted in where we grow and how we improve our network and our position even further.

Speaker Change: And I believe that's why don't they kept on tissue types. We have created over the last few years, which we expect to exploit if the conditions are right.

Michael Linenberg: Great. Thanks for that thorough response. Just my second question, this is just a little bit more nuanced. Across the region, I know in the past, Colombia domestic had been one of the weaker markets. Maybe things are stabilizing there. As you look across your region, where are the strong points? Where are the weak points? I know we've sort of heard that Argentina now is maybe becoming one of the better, if not the best-performing markets in the region. Just any color on that, how things have sort of evolved since the last quarter?

Speaker Change: Great. Thanks, Thanks for that thorough response and then just my second question. This is just a little bit more nuanced.

Speaker Change: Across the region I know in the past.

Speaker Change: Colombia domestic had been one of the weaker.

Speaker Change: Markets.

Speaker Change: Maybe maybe things are stabilizing there as you look across your region, where are the strong points, where the weak points I know, we've sort of heard that Argentina now is maybe becoming one of the better if not the best performing markets in the region, just just any color on that.

Speaker Change: How things have sort of a volatile.

Speaker Change: The last quarter.

Roberto Alvo: Sure. Yes. In the last 2 quarters, we pointed out that we thought that domestic Colombia was under excess of capacity. I think that has stabilized in the last 2 months. Capacity for the whole industry has been negative in terms of growth in the last months, and therefore the market is in a slightly more healthy position than it was in the previous 6 months. Across the rest of the domestic markets, in general, we see good, strong demand, and in a stable environment. I would say that the weakest point is today Ecuador, which is very small for us, but it is basically related to the geopolitical issues or the political issues and safety issues they have there, but it's a very minor part of our operation, even though it still remains healthy.

Speaker Change: Okay, yes, so in the last few quarters, we pointed out that we thought about domestic Colombia was under.

Speaker Change: Excess of capacity I think that that has stabilized in the last few months.

Speaker Change: Capacity for the whole industry has been negative in terms of growth in the last months and therefore, the market slightly more healthy position that it was in the previous six months.

Speaker Change: Across the rest of the domestic market in general we see good strong demand.

Speaker Change: In a stable environment I would say that the weakest point east today, Ecuador, which is very small for us but he this is basically related to the geopolitical issues or the political issue. Some safety issues. They have there, but it's a very minor part of our operation even though it still remains healthy international has been very strong, particularly your international travel within South America, where.

Roberto Alvo: International has been very strong, particularly international travel within South America, where most of our international growth has been focused, less so in the long-haul, the growth, just because we don't have the fleet. When we see long-haul, we see good performance both in transpacific Europe and the US, being Europe and transpacific slightly better than the US. In general, I would say that the markets have remained stable, and domestic Colombia, which was a little bit of a pain point, has relatively improved to the last 6 months. Lastly, on cargo, we have seen a very strong end of 2024, albeit a weaker H1 2024. H1 2025 has been stable in general, a little bit less active than the end of 2024. It's also very seasonal.

Speaker Change: Most of our international growth has been focused less so in the long hole the growth just because we don't have the fleet, but when we see long haul we see good performance both in Transpacific, Europe, and the U S being Europe and transpacific slightly better.

Speaker Change: On the U S. So in general I would say that the markets have remained stable and domestic Colombia, which was a little bit of a pinpoint.

Speaker Change: That is to go to the last six months lastly on cargo we have seen very strong end of 2024 I'll beat a very a weaker first half of 'twenty 'twenty four for example.

Speaker Change: <unk> has been stable in general a little bit less active.

Speaker Change: On the end of 'twenty 'twenty four it is also very few certainly the second half of it is much better than the first half of the gearing cargo and we have seen so far no impact or.

Roberto Alvo: The H2 of the year is much better than the H1 of the year in cargo, and we have seen so far no impact of the tariffs that are imposed basically in the US with respect to cargo traffic. However, we're very mindful of the de minimis waiver that ends on 2 May, and we're monitoring if that will have an effect.

Speaker Change: The tariffs that are imposed basically in the U S.

Speaker Change: With respect to cargo traffic. However, we're very mindful of the Dominion. This waiver that ends on may 2nd and we're monitoring it will have an effect.

Roberto Alvo: on cargo traffic and in particular on capacity going forward. So far, sales have remained in a good place.

Speaker Change: Cargo package, particularly on your own capacity going forward, but so far sales have remained in a good date.

Ricardo Botas: Great. Thanks for that comprehensive rundown. Thank you.

Speaker Change: Great. Thanks for that comprehensive run down thank you.

Speaker Change: Yes.

Speaker Change: Okay.

Roberto Alvo: Thank you.

Operator: Thank you. Our next question comes from Gabriel Rezende with Itaú BBA. Please go ahead.

Speaker Change: Thank you. Our next question comes from Gabriel <unk> with <unk> BBA. Please go ahead.

Speaker Change: Okay.

Gabriel Rezende: Hi. Good morning, everyone. Thanks for the call. Regarding the guidance, it is actually a follow-up to the previous question. I was just wondering how much have you guys been positively surprised by the Q4 numbers as you have been? Just trying to understand whether the better guidance for the year reflects a better Q1 and the next 9 months should be pretty much the same as you guys were expecting, or if you guys are seeing a better demonstrated figures in the coming quarters as well. Just trying to understand what you have put into the guidance in that sense. Also, regarding the guidance, you are posting a CASK ex fuel that is already below what you are guiding for the full year. The overall feeling is that your guidance might have some room to the upside. Am I correct? Those are my two questions. Thank you.

Hi, good morning, everyone.

Speaker Change: Thanks for the call.

Speaker Change: Regarding the guidance, it's actually a follow up to the previous.

Speaker Change: Question I was just wondering how much have you guys been positively surprised by the <unk> numbers.

Speaker Change: We have been just trying to understand whether the better guidance for the year.

Speaker Change: Flat or better.

Speaker Change: <unk>.

Speaker Change: And.

Speaker Change: The next nine months it would be pretty much the same as you guys were expecting.

Speaker Change: If you guys are.

Speaker Change: Our better than anticipated figures.

Speaker Change: In the coming quarters as Paul just trying to understand why you have to put into the guidance and also.

Speaker Change: The guidance you.

Speaker Change: You are voting.

Speaker Change: Ex fuel that is already.

Speaker Change: And what you are guiding for the full year. So the overall opinion.

Speaker Change: Guidance might have come in.

Speaker Change: To the upside.

Speaker Change: Am I correct.

Speaker Change: Those are my two questions. Thank you.

Don: Thanks, Don.

Roberto Alvo: Thanks. With respect to your first question, we have good bookings visibility for the remainder of Q2. In general, we see positive trends and stable demand throughout most of our business units. That gives us confidence that despite the uncertainty we've seen around the world, this has not made an impact to our demand trends in this part of the world. Having said that, and I probably forgot to mention this when Michael asked the question, I think that an important driver also of our improved numbers is that we are seeing a better share of premium traffic coming our way. We have devoted a significant amount of effort, time, and investments to enhance our product, improve our product throughout the experience of the customer.

Speaker Change: Thanks, so much.

Speaker Change: Thank you. Your first question first question we have.

Speaker Change: Have a good visibility good bookings visibility for the remainder of the second quarter and in general we see positive trends and stable demand throughout most of our business units.

Speaker Change: That gives us confidence that despite the uncertainty we've seen around the <unk>.

Speaker Change: World.

Speaker Change: Has made an.

Speaker Change: Any impact to demand trends in this part of the world.

Speaker Change: You said that and I, probably forgot to mention is when Michael asked the question I think that an important driver also offer improved numbers.

Speaker Change: But we are seeing a better share of premium traffic coming our way, we have devoted a significant amount of effort and time and investments to enhance our product improved.

Speaker Change: Throughout the experience of the customer and as we kind of have mentioned.

Roberto Alvo: As Ricardo mentioned it in his words, premium revenue is increasing far faster than total passenger revenue has been increasing. Passenger revenue increased only 1.6% in the quarter, premium revenue increased over 7%. I think that's a distinctive change that we have made in the last few years. We're focusing more in a segment of the market where we believe there was willingness to pay that not necessarily we had understood as we are understanding it today, and this is an important part of our focus going forward. For the remainder of the year, we're following long-term trends, and as far as the information we have, again, we feel confident of what we're seeing. As I said on my script, on my remarks, we remain vigilant, and if there's anything that merits any change in our guidance, we'll post it when appropriate, if it happens.

Speaker Change: <unk>.

Speaker Change: And his words premium revenue is increasing.

Speaker Change: Faster.

Speaker Change: Total passenger revenue has been increasing passenger revenue increased 21, 6% in the quarter premium revenue increased over 7%, but I think.

Speaker Change: But that can be seen.

Speaker Change: Change that we have made in the last few years focusing more in a segment of the market, where we believe there was a willingness to pay that not necessarily we had understood as we are understanding it today and this is an important part of our focus going forward.

Speaker Change: And for the remainder of the year, we're following long term trends and.

Speaker Change: As far as information, we have again, we feel confident with what we're seeing but as I said on my.

Speaker Change: In my script.

Speaker Change: In my remarks.

Speaker Change: We remain vigilant on that.

Speaker Change: Theres anything that makes any change in our guidance.

Kevin: We posted when appropriate if it happens for the cost part I'll turn it to Kevin.

Roberto Alvo: For the cost part, I'll turn it to Ricardo.

Ricardo Botas: Okay. Thank you, Gabriel, for your question. I think we also disclose for this updated guidance, the assumptions that we have for jet fuel price, which is $90 per barrel. Yes, will depend on the scenarios. We could have some upside, but also downside risks to this guidance considering this level of fuel price as well as the FX exchange rate that we also disclosed on this guidance at 5.9 reais per each dollar. Okay?

Kevin: Okay. Thank you for your question I think we also disclose or these updated guidance. The assumption that we will have for Jetblue price, which is 90 $90 per barrel. So.

Kevin: Yes.

Kevin: We will depend on the scenarios, we could have some upside but also downside risks to these.

Kevin: Guidance considering these level.

Kevin: Full price as well.

Kevin: FX exchange rates that we also disclosed on this guidance at five nine.

Kevin: They're each dollar okay.

Gabriel Rezende: Okay. That's clear. Thank you very much.

Kevin: Okay. That's clear thank you very much.

Kevin: Okay.

Operator: Thank you. Our next question comes from Jens Spiess with Morgan Stanley. Please go ahead, Jens.

Kevin: Thank you.

Speaker Change: Next question comes from yen Speece with Morgan Stanley. Please go ahead James.

Jens Spiess: Yes. Hello. Thank you for taking my questions, and congrats on the strong results. I just want to follow up on the previous question. Basically, on the cost print you had this quarter and the guidance you're providing for the full year. I was looking that you had some benefit from lower maintenance cost. You explain in your release that part of it is driven by a reversal of redelivery provisions due to acquisition of aircraft. I think it was like $32 million. That obviously is probably not sustainable, right? Are there any other items we need to adjust for? Also you had in other expenses, apparently some FX benefits. If you could maybe elaborate on what percentage of those expenses are denominated in local currency, it would be quite useful. Thank you.

Speaker Change: Yes, Hello. Thank you for taking my question and congrats on the strong results I just wanted to follow up on the previous question.

Speaker Change: Basically.

On the cost.

Speaker Change: Since you had this quarter and the guidance you're providing for the full year.

Speaker Change: I was looking at that.

Speaker Change: You had some benefit from.

Speaker Change: Like lower maintaining its cost you explained in your release that part of is this driven by a reversal of free delivery.

Speaker Change: Sorry to redeliver the provisions.

Speaker Change: Due to acquisition of aircraft I think it was like $32 million that obviously is probably not.

Speaker Change: Not sustainable right.

Speaker Change: Are there any other items, we need to adjust for and also you had an other expense system, apparently some FX benefits. If you could maybe elaborate on how what percentage of those expenses are denominated in local currency it would be quite useful. Thank you.

Ricardo Botas: Okay, Jens, it's Ricardo here. Thanks for your question. I think the maintenance adjustment that we have disclosed, it's related with the 6 aircraft acquisition, and it's just a move from operational leasing structure to a next financial leasing structure. We disclose just to let you aware about, but we are still confident that we could also manage to control under efficiency, digitalization, and other a lot of group initiatives that we have inside the company to keep controlling the costs. I think it's important to share with you that reversion in provisions. We are focused on continuing cost savings initiatives. We have a lot of initiatives, not only for the back costs and admin expenses cost, but also for maintenance and other relative operating costs inside the company.

Riccardo Bottas: Okay, Dan it's Riccardo here. Thanks for your question.

Speaker Change: I think.

Speaker Change: The maintenance adjustment that we have disclosed that it's related with the fixed aircraft acquisition and.

Speaker Change: Just to move from operational leasing structured to a Max financial leasing structures. So.

Speaker Change: We disclosed just less you're aware about but we are still confident that we could also manage to control under efficiency. These validation and other a lot of growth initiatives of the initiatives that we have inside the company to keep controlling their costs, but I think it's important to share with you that the reversion.

Speaker Change: On provisions.

Speaker Change: We are focused on continued cost savings initiatives. So we have a lot of initiatives.

Speaker Change: Only for the back half in that I mean expenses costs, but.

Speaker Change: Also for maintenance and other relative operating costs inside the company. So we are adding to these forecasts and our confidence for these guidance.

Ricardo Botas: We are adding to these forecasts and our confidence for this guidance, that yes, we still have a long journey to keep controlling and find alternatives to even reduce even more the costs. On this period of Q1, we had an impact of $0.002 from the FX. We also need to understand the real outcomes for the FX over the final tax act fuel cost. I think it's also important to emphasize. From another relevant part of the cost, which is fuel, we disclose our performance in terms of the way that we could reduce the cost of fuel. Remember, we improved the capacity 7%. Actually the consumption in barrels was up 5%, and the average price was down close to 10%. The average was a reduction that we have disclosed in our financials.

Speaker Change: Yes, we still have a.

Speaker Change: Loan journey to keep controlling defined alternative to even reduce even more of the costs on these periods.

Speaker Change: Quarter, we had an impact of <unk> from the FX. So we also need to understand the real outcome for the FX over the final path, we will call.

Speaker Change: But I think it's also important to emphasize and from the another relevant part of the cost which is what we disclose.

Speaker Change: Our performance in terms.

Speaker Change: Off the way that we could reduce the cost of Hulu, but remember we prove that the CAC and the capacity and 7% so actually the consumption in barrels.

Speaker Change: <unk>, 5% and the average price was down close to 10%. So the average was a reduction that we have disclosed that in our financials and after all we disclosed there is no specific figures for the exposure that we have for the U S denominated part of our cost but together.

Ricardo Botas: After all, we disclosed there is no specific figures for the exposure that we have for the US-denominated part of our costs. Together with fuel, we're talking about around 7% of our total costs could be denominated in USD. Remember that we have, from our mix of revenues, including international and US and Europe points of sale, and also relevant part of revenues also denominated in hard currency, which could represent more than 60% of our total revenues. Okay?

Speaker Change: We will we are talking about.

Speaker Change: Around 70% of our total costs could be denominated in U S dollars, but remember that we have from our mix of lapping those include the international.

Speaker Change: And Europe point of sales.

Speaker Change: I'm also a relevant part of our revenues also denominated in hard goods, which grew to represent more than 60% of our total revenues okay.

Jens Spiess: Okay, perfect. The 0.2 you mentioned on your CASKs fuel benefit from the FX, that's year over year, right?

Speaker Change: Okay perfect.

Speaker Change: Zero point too.

Speaker Change: Mentioned on your cask ex fuel benefit from the FX.

Speaker Change: That's year over year right.

Ricardo Botas: Yes.

Speaker Change: Yes.

Jens Spiess: Okay, perfect. Thank you. Appreciate it. Cheers.

Speaker Change: Okay perfect.

Speaker Change: I appreciate it.

Speaker Change: Yeah.

Operator: Thank you. The next question comes from João Rizzo with Goldman Sachs. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Joe Freezer with Goldman Sachs. Please go ahead.

João Rizzo: Yes. Hey, good morning, everyone. Thanks for taking my questions. Congrats on the results. I had 2 quick questions and 1 follow-up. On the guidance itself, you guys are expecting even better than expected lever ratio by the end of this year. I just wanted to understand what would make you guys consider announcing an extraordinary dividend. I know this is a fluid situation, right? In the macro globally, the leverage path seems to be on track, right? You guys guided for below 2 times leverage in your Investor Day. This opens room for maybe extraordinary dividends. Just wanted to get a sense on that. My second question is around the selling shareholders, right? If you guys could provide an update on their willingness and timing of those guys potentially selling more shares into the market. Finally, just a quick follow-up on the guidance.

Joe Freezer: Yes, Hey, good morning, everyone and thanks for taking my questions. Congrats on the results I have two quick questions and one follow up.

Speaker Change: Okay.

Speaker Change: So on the guidance itself.

Speaker Change: Even better than expected leverage ratio.

By the end of this year. So I just wanted to understand what would make you guys consider announcing an extraordinary dividend I know this is a fluid situation right in their macro globally, but.

Speaker Change: Yeah, that'd be elaborating that average pass it seems to be on track right and you guys guided for a below two times leverage and your Investor day. So this opens room for maybe are starting to have dividends doesn't want that together with Samsung.

Speaker Change: My second question is around the selling shareholders right. If you've got you guys could provide an update on their willingness and timing of those guys potentially stand anymore.

Speaker Change: Sure I think for the market and.

Speaker Change: And finally, just a quick follow up on the guidance.

João Rizzo: Your jet fuel expectations remain unchanged. I just wanted to double-check if that accounts for the hedges you guys undertook in the period, or that is excluding hedges. If you could provide what would be the adjusted jet fuel accounting for hedges, that would be nice as well. Thank you very much, guys.

Speaker Change: Your just your expectations remain unchanged.

Speaker Change: Just wanted to double check if that account for the hedges you guys undertook a excluding hedges and then.

Speaker Change: If you could provide what would be the adjusted.

Speaker Change: That's you're accounting for hedges that would be nice as well. Thank you very much guys.

Ricardo Botas: Okay, João, thank you for your question. I think regarding our liquidity levels and the dividend decision, actually remember that we are sharing with the market our discussions with the board of directors regarding the capital allocations, which could includes additional dividends, but also other structures to have an additional repurchase of shares. We are having that kind of discussions with the board. Yes, we depend on the final decision from the board and also the way that we are seeing our figures and the forecast figures complying with the financial policy and the guidance that we have provided. Yes, we are comfortable with the liquidity situation that we have to have that kind of discussions with our board. Regarding the shareholder decisions to have a secondary or a follow-on, I think it's more on the shareholder's decision.

Speaker Change: Okay to all and thank you for your question I think regarding.

Speaker Change: Our liquidity levels and the dividend.

Speaker Change: Decision actually remember that we are sharing with the market our discussions with the board of directors regarding the capital allocations, which could include additional dividends, but also other structures to have an additional repurchase of shares.

Speaker Change: So you're having that kind of discussions with the board and yes, we would depend on the final decision from the board and also.

Speaker Change: The way that we're seeing.

Speaker Change: Our figures in the forecast vigorous complying with.

Speaker Change: The financial policy and the guidance that we have provided.

Speaker Change: But yes, we.

Speaker Change: Comfortable with the liquidity situation that we have to have that kind of discussions with our board regarding the shareholder decisions too.

Speaker Change: Secondly, there all along I think it's more on the shareholders' decision. So we have no information and we got that information from shareholders, we will let the market okay.

Ricardo Botas: We have no information, and if we got that information from shareholders, we will let the market aware. Okay. Your last question, just to remind me, was related with the share of the hedge that we have for fuel or for FX?

Speaker Change: Your last question is just to remind me was related with the share of the hedge that we have four.

Speaker Change: For FX.

João Rizzo: Yeah. It was just to double-check whether the jet fuel price you guys provided in the guidance accounts for the hedges you guys took, or if there might be some upside to that price as you guys maybe did hedges in the falling jet fuel environment.

Speaker Change: Yeah.

Speaker Change: Double check whether the jet fuel price you guys are provided in the guidance account for the hedges you guys took or there might be some upside to that price as you guys maybe did hedges falling following two environment.

Roberto Alvo: I cannot give you any specific price and the size that we have. Actually, we have disclosed it in the earnings release, the average part of our consumptions forecasted for the next 4 quarters that are covered partially with a hedge. What I can tell you now is that this $90 per barrel is aligned with the strategy that we have for the forecast, together with the impact from the hedge outcomes. That's why we are confident with inside some range, under a low level of volatility, we are committed to reach and to work with the guidance supported by these $90 per barrel.

Speaker Change: I cannot give you any specific price and besides that we have actually we have disclosed in the earnings release. The average park of our Consumptions forecast look forward enact before quarters that are covered partially with hedge.

Speaker Change: What I can tell you now is that these $90 per barrel its alignment.

Speaker Change: Alignment with the strategy that we have for the forecast together with the impact from the hedge outcomes. So that's that's why we are confident with the sites on the range.

Speaker Change: Our low level of volatility we are committed to reach and to work with the guidance supported by these $98 a barrel.

João Rizzo: Thank you very much. Super clear, guys. Have a good one.

Thank you very much.

Speaker Change: Have a good one.

Operator: Thank you. The next question comes from Iwel Sark with BICE Inversiones. Please go ahead.

Speaker Change: Thank you. The next question comes from LLS stuck with be IC investments. Please go ahead.

Iwel Sark: Thanks for taking my question, and congratulations for the results. My first question is with regard with yields in the international segment, which were pretty strong. I would want to ask. What do you expect going forward? Second question is about growth expectations for Brazil, which were listed against previous guidance. Up to this point, industry figures provided by ANAC and LATAM figures show modest growth in Q1. When you could expect that ASK growth will converge to the guidance of South America?

Speaker Change: Thanks for taking my question.

Speaker Change: My first question.

Speaker Change: Those are cute.

Speaker Change: Sure.

Speaker Change: Hum.

Speaker Change: Right.

Speaker Change: And we want to ask what do you expect.

Speaker Change: Second question.

Speaker Change: Gross expectation, I assume which way or at least.

Speaker Change: <unk>.

Speaker Change: Against a previous guidance.

Speaker Change: Up to this point.

Speaker Change: Can you just sort of figures.

Speaker Change: Good bye.

Speaker Change: Latam tiers so modest.

Speaker Change: The first question.

Speaker Change: When you put it.

Speaker Change: I think our growth.

Speaker Change: No.

Speaker Change: When it converts to the guidance.

Speaker Change: Americans.

Roberto Alvo: Thanks. On the first question, please remember that our international business segment is comprised both of long-haul and international within South America, and you have to see those two segments separately in terms of their dynamics. What we have put on the guidance is our expectation in general of, as I said, stable demand and a good growth environment, particularly in regional. We don't disclose going forward yields and RASK per business area or for the company, but our expectations are embedded in the guidance altogether. With respect to domestic Brazil, first, the slight improved capacity that we have posted here is purely based on utilization and fleet usage. We're not adding more assets to our fleet during 2025 vis-à-vis of what we had expected. This is simply a better utilization of the current assets we have.

Speaker Change: Thanks.

Speaker Change: So on the first question.

Speaker Change: Please remember that our international business segment is comprised of long haul.

Speaker Change: Our national meeting in South America.

Speaker Change: You'd have to see those two segments.

Speaker Change: Separately in terms of their dynamics, but what we have put in the guidance is our expectation in general of as I said stable demand.

Speaker Change: Good.

Speaker Change: Growth environment, particularly in regional.

Speaker Change: So.

Speaker Change: We don't disclose going forward yields and on breast for.

Speaker Change: Our bearing business area or for the company, but they are embedded expectations are embedded in the guidance altogether.

Speaker Change: And with respect to domestic Brazil.

Speaker Change: So first stop being the slight improved.

Speaker Change: Capacity that we have posted here is purely based on utilization and usage and we're not adding any.

Speaker Change: More assets to our fleet during 2025 different pieces of what we had expected. This is cynthia better utilization of the current assets we have.

Roberto Alvo: Looking at the environment in Brazil, which is from a demand perspective stable, and on a capacity perspective as well stable, we see good opportunities to reinforce where we have strength. What the guidance is reflecting is the opportunities that we see where we can improve the product and the network for our passengers.

Speaker Change: Looking at the environment and proceeding which is south of the mine perspective stable.

Speaker Change: On a couple of activity perspective, as well as stable, we see good opportunities to reinforce where we have strength.

Speaker Change: And what does that actually protecting the opportunities that we see where we can improve the product and the network for our passengers.

Iwel Sark: Yeah. Okay, perfect. Just following up on that last answer, I would want to know, how do you see competition in Brazil as other competitors, such as Gol or Azul, are expecting higher growth rates in capacity for the passenger segment? I know that Gol and Azul don't break down domestic and international air travel, it seems like they are expecting to grow at higher rates than LATAM Airlines.

Speaker Change: Okay perfect.

Speaker Change: Just following up on that.

Nothing about that last time Sir.

Speaker Change: I know he wants to know.

Speaker Change: How do you see competition in Brazil.

Speaker Change: Or are there.

Speaker Change: But there are competitors such as <unk>.

Speaker Change: <unk>, how your growth rate capacity.

Speaker Change: For the passenger.

Speaker Change: Segment, I know Thats a goal.

Speaker Change: So Don to disclose don't breakdown does.

Speaker Change: I stick on international Air travel bag.

Speaker Change: It seems like there.

Speaker Change: No.

Speaker Change: At higher rates than Latam Airlines.

Roberto Alvo: I don't like to comment on capacity growth of our competitors. That's their decision and their strategy. What I focus on is our own operation and particularly where we have strength. What I think is important in terms of our strategy here is that we do invest where we know we can win, and the focus that we have in growing in domestic Brazil is in the places where we believe we can enhance our network and bring a better product for our passengers. We'll see how it develops during the year, but we're very confident in our position, what we have built and developed over the last two years in domestic Brazil, and we're looking forward to trying to have a better product and a better network for our passengers during the year.

Speaker Change: I don't like to comment on capacity growth of our competitors.

Speaker Change: And their strategy what I focus on is.

Speaker Change: Our own operation, where we have strength. So what I think it's important in terms of our study here is that we do invest where we know we can win and the focus that we have been growing and domestic but you do see in the places where we believe we can enhance our network and bring a better product for our passengers.

Speaker Change: We'll see we'll see how would you build up during the year, but we're very confident in our position we have built and developed over the last two years you can see that we're looking forward to trying to have a better product and a better network for our passengers.

Speaker Change: Okay.

Iwel Sark: Okay, thanks. Have a nice day.

Speaker Change: Okay. Thanks.

Speaker Change: Steve.

Speaker Change: Okay.

Roberto Alvo: Thank you.

Operator: Thank you. The next question comes from Stephen Trent with Citigroup. Please go ahead, Stephen.

Speaker Change: Thank you. The next question comes from Stephen Trent with Citi Kate.

Speaker Change: Please go ahead Steven.

Speaker Change: Okay.

Stephen Trent: Good morning, gentlemen, and thanks very much for taking my question. Actually, the first question I have is maybe a follow-up to the gentleman that was just speaking. When we think about Brazil's domestic market and you look at your guidance, asking another way, are you basically assuming that the competitive environment stays steady state for the rest of the year vis-à-vis where it is today? No blowback from this ticket fraud stuff from Despegar or anything like that? Just love to hear what you're thinking about that high level.

Speaker Change: Good morning, gentlemen, and thanks very much for taking my question.

Speaker Change: Actually the first question I have is maybe a follow up too.

Speaker Change: Gentlemen that that was just speaking.

Speaker Change: When we think about.

Speaker Change: Brazil's domestic market.

Speaker Change: You look at your guidance.

Speaker Change: Asking another way are you basically assuming that sort of.

Speaker Change: The competitive environment stays steady state for the rest of the year visiting where it is today.

Speaker Change: And no blow back from this.

Speaker Change: Ticket fraud stuff.

Speaker Change: I'm desperate guy or anything.

Speaker Change: Anything like that was just.

Speaker Change: Love to hear what you're thinking about that high level.

Roberto Alvo: Hi, Stephen. We see, as I said, a good demand environment in domestic Brazil, and we see relatively good capacity discipline in general in the market. We see our strengths. We understand where we can improve our network, and that's where we're focusing. You mentioned something on Despegar. I'm not going to refer to Despegar, but I don't think that those developments are relevant to the dynamic of the market, which is much bigger than the size of Despegar itself. Again, very confident on what we have built over the last two or three years in domestic Brazil and investing basically where we have our strengths and taking advantage of a demand environment that has been stable.

Speaker Change: Yes, hi.

Speaker Change: I mean, we.

Speaker Change: We see as I said.

Speaker Change: A good demand environment, and the rest of Brazil, and we see a relative.

Speaker Change: And the good capacity discipline and down in the market.

Speaker Change: We see our strengths, we understand where we are.

Speaker Change: And improve our network and that's where we're focusing.

Speaker Change: You mentioned something on this because I don't think I'm only going to.

Speaker Change: We started to disclose that but I don't think that those variables are relevant to the dynamic of the market, which is much bigger than the size of of just begun itself. So again very confident on what we have built over the last two or three years in domestic Brazil, and investing investing basically where we have our strengths and.

Speaker Change: I'm, taking advantage of a demand environment that has been stable.

Stephen Trent: Great. Appreciate that. Just a quick follow-up. Definitely appreciate the color you gave on FX, assuming it's going to be a bit weaker. Any view on why you didn't adjust fuel guide? I know you've got hedges there, about $2.14 a gallon for the year. You did $2.80 in 1Q, and the hedged versus unhedged difference was just $0.01 a gallon. Would sort of just love to hear high level that $90 per barrel bogey that's included in the guide. Thank you.

Speaker Change: Great I appreciate that.

Speaker Change: Just a quick follow up you know definitely appreciate the color you gave on an FX.

Speaker Change: So I'm, assuming it's going to be a bit weaker.

Speaker Change: Any view on.

Speaker Change: Why there was you didnt.

Speaker Change: Adjusted fuel guide I know, you've got hedges there about $2 14, a gallon study are you did $2.80 and one Q.

Speaker Change: The hedged versus unhedged difference was just a penny a gallon which sort of.

Speaker Change: Just love to hear.

Speaker Change: High level sort of that.

Speaker Change: Of that $90 per barrel bogie. That's included in the guide thank you.

Speaker Change: Yeah.

Andrés del Valle: Hi, Stephen. Andres here. Yeah. The $90 a barrel is what we see here. If you look at the last year, I think fuel price was all over the map. We have been asked frequently whether this could be an upside. As Ricardo said, could be a downside too. $90 a barrel is that today's spot prices that are 86, and the curve is around those levels. We feel confident with that $90 a barrel for jet fuel for the full year.

Speaker Change: Even under this year, yes.

Speaker Change: Since the launch of barrel is what we see here. If you look at the last year I think fuel price plus all the math, we are bidding as frequently but this could be an upside.

Speaker Change: It kind of a step down.

Speaker Change: T.

Speaker Change: $90 a barrel at today's spot prices. It takes care of its underground dose levels. So we feel confident with that $90 a barrel for jet fuel for the full year.

Stephen Trent: Okay. Appreciated that. Thank you.

Speaker Change: Yeah.

Speaker Change: Okay I appreciate it.

Speaker Change: <unk>.

Andrés del Valle: Sure.

Speaker Change: Sure.

Operator: Thank you. Our next question comes from Pablo Monsivais with Barclays. Pablo, please go ahead.

Speaker Change: Thank you. Our next question comes from Pablo <unk> with Barclays.

Speaker Change: Please go ahead.

Pablo Monsivais: Hi. Thanks for taking my question. Just wanted to pick your brain on, it seems that US carriers are pulling out capacity.

Speaker Change: Hi, Thanks for taking my question.

Speaker Change: Yeah.

Speaker Change: Right.

Speaker Change: All right.

Speaker Change: Okay.

Roberto Alvo: I'm sorry, Pablo, we cannot hear you. Sorry, Pablo.

Speaker Change: I am sorry, Repower, although we cannot hear you.

Pablo: Sorry Pablo.

Pablo Monsivais: Hello?

Roberto Alvo: Can you talk closer to the mic?

Pablo Monsivais: Can you hear me now?

Speaker Change: Hello can you talk can you hear me now.

Roberto Alvo: Okay. Much better. Thank you.

Pablo: Okay.

Got it thank you.

Pablo: Yes.

Pablo Monsivais: Perfect. Okay. My question is regarding your read-through from US airlines pulling out capacity in general. Have you seen any material impact on the international routes you operate? Is this an opportunity for you to increase capacity, or how you plan to navigate on this condition? That's my first question. My second question is if you can provide some color in terms of the demand from transatlantic routes and within each point of sale. Thank you.

Pablo: Perfect Okay Mike.

Speaker Change: My question is regarding your read through from U S earnings pulling out capacity in general have you seen any material impact on the international routes. You operate is this an opportunity for you to increase capacity or how you plan to two.

Pablo: To navigate.

Pablo: These conditions. That's my my first question. My second question is if you can provide some color in terms of.

Pablo: The demand from the trust Atlantic routes and within each point of sale. Thank you.

Roberto Alvo: Thank you, Pablo. I think one important thing to remember is that the Southern Cone has been historically less exposed to migratory traffic to the US as compared to the northern part of South America, Central America, and Mexico. Therefore, I think that the impact that other countries further north have seen in terms of traffic to the US are not as relevant to the Southern Cone as they are probably in the northern part of our subcontinent. We have seen very minor changes in demand, generally to the US from our home markets. Even though it's something we're monitoring well, it's not something that today looks meaningful.

Speaker Change: Thank you Paul.

Pablo: No.

Speaker Change: Well I think one important thing to remember is that the southern cone is less has been certainly less exposed to new territory traffics to the U S as compared to the northern part of South America, Central America, and Mexico, and therefore, I think that the.

Pablo: The impact of that.

Speaker Change: Other countries further would not have seen in terms of.

Speaker Change: Traffic to the U S are not as relevant to the southern cone us, they're probably in the northern part of.

Speaker Change: Of our.

Speaker Change: Some content we have seen.

Speaker Change: Sin.

Speaker Change: Very minor changes in demand get R&D to the U S from our home markets.

Speaker Change: Even though it's something we're monitoring well, it's not something that.

Speaker Change: Today looks meaningful and do remember that we have the joint venture with Delta as well which provides.

Roberto Alvo: Do remember that we have the joint venture with Delta as well, which provides a very good diversification in terms of point of sale with respect to what we sell in South America vis-a-vis what they sell in the US. All in all, in general, so far, even though the US is a little bit slower than transatlantic and transpacific, it has been still in a good position, and the impact has been relatively low from all the news that has come into the US. In the case of transatlantic, as you've asked, in general, demand between South America and Europe has been strong in the last, I would say, two years, and it has good components of strength from both European point of sale and South American point of sale. Nothing especially important to report with respect to how those two trends go there.

Speaker Change: Very good diversification in terms of point of sale.

Speaker Change: With respect to what we saw in South America vis vis a one day sale in the U S. All in all in general so far even though the U S is a little bit slower than transatlantic.

Speaker Change: And transpacific it has been steel.

Speaker Change: In a good position on the impact has been relatively low from from all the news.

Speaker Change: Come to the U S and in the.

Speaker Change: I guess I'll transatlantic as you've asked that in general demand between sentiment in Europe has been strong in the last I would say to us and that.

Speaker Change: It has good components of <unk>.

Speaker Change: Frank from both European point of sand and southern light bulbs have nothing especially.

Speaker Change: Important to report with respect to how those two transco there relatively stable on both sides.

Roberto Alvo: relatively stable on both fronts.

Speaker Change: Yeah.

Pablo Monsivais: Perfect. Thank you.

Speaker Change: Perfect. Thank you.

Operator: Thank you. Our next question comes from Guilherme Mendes with JPMorgan. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Next question comes from Magellan Mendez with J P. Morgan. Please go ahead.

Guilherme Mendes: Hey, good morning, Roberto, Ricardo, and Andrés. Thanks for taking my question. Two quick ones. The first one, you mentioned that demand remains good. The outlook overall remains pretty solid. Assuming some kind of demand deterioration, what kind of capacity and fleet flexibility would you have in terms of the delivery schedule from Airbus and Boeing? The second one, a follow-up on Brazil domestic. A lot of talks on the potential M&A between Azul and Gol, and if you have any preliminary views on how LATAM could be impacted. Thank you.

Magellan Mendez: Hey, good morning, Roberto he thought of the wind and the rest. Thanks for taking my question two quick ones.

Magellan Mendez: First one you mentioned that demand remains good toe deal to look overall remains pretty solid.

Magellan Mendez: But assuming some kind of demand deterioration, what kind of capacity and fleet flexibility would you have in terms of the delivery schedule from Airbus and Boeing.

Magellan Mendez: And the second one a follow up on Brazil domestic.

Magellan Mendez: A lot of talks on the potential M&A between <unk> and <unk> have any preliminary views on how that could be impacted thank you.

Roberto Alvo: Thanks, Guilherme. On the first question, remember that when we saw, and we reported this last year, when we saw delays on the Airbus side and also issues with the Pratt & Whitney engines, we took the decision of extending an important number of A319s, and keep operating them. These are very low capital cost aircraft that run almost on 100% variable cost basis today. It's the flexibility we have decided to keep within the fleet to either compensate for slowdowns or increase speed in the case of us seeing better demand. We have the ability to adjust our capacity with that fleet in particular, and we don't expect that if there's a slowdown, we'll see or want to have any changes with respect to our Airbus deliveries.

Magellan Mendez: Thanks Glenn.

Magellan Mendez: The first question, so remember that when when we so and we've reported this last year. When we saw delays on the Airbus side of those solutions with a pet Whitney engines, we do get to see sort of extending.

Magellan Mendez: An important number of 2019.

Magellan Mendez: And keep operating them bizarre.

Magellan Mendez: Very low capital cost aircraft.

Magellan Mendez: That'll run almost 100% variable cost basis today and it's the <unk>.

Magellan Mendez: I do think we have decided to keep within the fleet through either compensate for slowdowns for increased speed indications.

Magellan Mendez: <unk> seen better demand. So so we have the ability to adjust our capacity we that feed in particular and we don't expect.

Magellan Mendez:

Magellan Mendez: There's just no doubt, we will see or want to have any changes with respect to our Airbus deliveries.

Roberto Alvo: What we would do eventually is decrease the utilization of those very low cost of capital assets to adjust if that was the case and was necessary. We like very much this flexibility of having something between 5% and 10% of our capacity, which is running on an almost 100% variable cost base. That allows us to move in this way. With respect to Gol and Azul, we've seen the news on the non-binding LOI for quite a while already. I don't think it's our position to speculate. If there's further news on that, we would react. At this point in time, we still believe it's premature to have a reaction on those potential non-binding conversations for now.

Magellan Mendez: We would do eventually.

Magellan Mendez: Decrease the utilization of those very low cost of capital.

Magellan Mendez: Assets towards you'll see is that.

Magellan Mendez: What are the game was the case and what's necessary and we like very much these flexibility of having something between five and 10%.

Magellan Mendez: The capacity, we choose broadening on almost 100% viable cost base that allows us to do.

Magellan Mendez: To move in this in this way.

Magellan Mendez: And with respect to Golar has fooled.

Magellan Mendez: We've seen the news on the on the.

Magellan Mendez: <unk>.

Magellan Mendez: For quite a while already.

Magellan Mendez: I don't think it's a position to speculate.

Magellan Mendez: If there's further news from that would react.

Magellan Mendez: At this point in time, we still believe it's premature to have a reaction on those potential nonbinding conversation.

Magellan Mendez: For now.

Guilherme Mendes: That's perfect, Roberto, thank you very much.

Magellan Mendez: That's perfect. Thank you very much.

Roberto Alvo: Thank you.

Magellan Mendez: Thank you.

Operator: Thank you. Those are all the questions we have. I'll now hand it back over to Ricardo to conclude.

Magellan Mendez: Thank you.

Ricardo Bottas: Questions, we have and so I'll turn the call back over to Ricardo to complaint.

Ricardo Botas: Thank you all for joining today. If you have any further questions, please reach out to our Investor Relations team, and have a great day. Thank you.

Speaker Change: So thank you all for joining US today, if you have any further questions. Please reach out to our Investor relations team.

Ricardo Bottas: Have a great day. Thank you.

Operator: Thank you everyone for joining us today. This concludes our call, and you may now disconnect your lines.

Ricardo Bottas: Thank you everyone for joining us today. This concludes our call and you may now disconnect your lines.

Ricardo Bottas: [music].