Q1 2025 Copa Holdings SA Earnings Call
Ladies and gentlemen, thank you for standing by welcome.
To Copa Holdings first quarter earnings call.
During the presentation, all participants will be in a listen only mode.
Afterwards, we will conduct a question and answer session.
At that time, if you have a question you will have to press star one one or your Touchtone phone.
As a reminder, this call is being webcast and recorded on May eight 2025 now.
Daniel: Now I'll turn the conference call over to Daniel <unk> Director of Investor Relations, Sir you may begin.
Daniel: Thank you Marvin.
Daniel: Welcome everyone to our first quarter earnings call joining.
Daniel: Joining me today are being a little hesitant.
Speaker Change: Oh of Copa Holdings, and Peter <unk> our.
Peter: Our CFO.
Pedro: First Pedro will start by going over our first quarter highlights followed by Peter who will discuss our financial results immediately after we will open the call for questions from analysts.
Pedro: Copa Holdings' financial reports have been prepared in accordance with international financial reporting standards in today's call. We will discuss non <unk> financial measures a reconciliation of the non <unk> financial measures can be found in our earnings release, which has been posted on the company's website Copa <unk>.
Pedro: Carl.
Pedro: The discussion today will also contain forward looking statements not limited to historical facts that reflect the company's current beliefs expectations and our intentions regarding future events and results.
Pedro: These forward looking statements involve risks and uncertainties that could cause actual results to differ materially and are based on our structure our assumptions subject to change. Many of these are discussed in our annual report filed with the SEC.
Pedro: Like to turn the call over to our CEO Mr Battle.
Battle: Thank you Danielle.
Battle: Good morning to all and thanks for participating in our first quarter earnings call.
Battle: First I would like to extend my sincere gratitude to all of our coworkers for their commitment to the company.
Battle: Their dedication and hard work have been instrumental in keeping copper at the forefront of Latin American aviation.
Battle: To them as always my highest regard kind of duration.
Battle: You could see in our earnings release.
Battle: We're pleased to report a strong start for the year.
Battle: Delivering solid first quarter financial results.
Battle: Our 23, 8% operating margin in Q1.
Battle: It's testament to the resilience of the company's business model.
Battle: As we navigate a lower year over year passenger yield environment.
Battle: Our ongoing focus on maintaining low ex fuel unit costs.
Battle: Leading on time performance.
Battle: Any passenger friendly product as.
Battle: As well as continuing to expand our hub of the Americas in Panama remains key to consistently achieving industry, leading margins and financial results.
Battle: Among the main highlights for the quarter.
Battle: Capacity increased by nine 5% year over year.
Battle: Adjusted for the Max grounding in Q1, 'twenty four capacity would have increased by four 6% for the quarter.
Battle: Passenger traffic grew by 10, 1% compared to Q1 'twenty four.
Battle: As a result load factor for the quarter increased by <unk> four percentage points to 86, 4%.
Battle: Unit revenues or RASM came in at 11, 5% and eight 1% decrease compared to Q1 'twenty four.
Battle: Mainly driven by a nine 1% decrease in passenger yields.
Continuing the trend of the second half of 'twenty four passenger yields were affected by additional industry capacity in the region and the weaker currency environment in certain Latin American countries.
Battle: Unit costs, excluding fuel our CASM ex came in at five eight cents in the quarter, representing a four 3% decrease compared to Q1 'twenty four.
Battle: This improvement was primarily driven by lower sales and distribution expenses, a reduction and passenger servicing costs related to the Max nine grounding in the first quarter of 'twenty, four and continued discipline in managing head count and overhead to fully benefit from the airlines growth.
Battle: As mentioned before operating margin for the quarter came in at 23, 8%.
Battle: On the operational front.
Battle: Copa Airlines delivered an on time performance of 98% and a completion factor of 99, 9%.
Battle: Once again positioning ourselves among the best in the industry.
Battle: With.
Battle: <unk> sure network, we recently announced service to three new cities, San Diego, California, starting in June.
Battle: And Salta and took some money in Argentina starting in September.
Battle: As we continue strengthening our position as the most complete and convenient connecting hub for travel in the Americas.
Battle: Turning over to Wingo during the quarter Wingo added one new domestic Colombia route between the series of Bucaramanga Santa Marta.
Battle: As mentioned in the previous call Wingo will receive an additional 737 800 from copper during the second half of this year to end the year with a fleet of 10 737 800.
Battle: With regards to our expectations for the year.
Battle: We're increasing our 2025 operating margin guidance to a range of 21% to 23%.
Battle: Mainly driven by a lower fuel cost outlook and stuff.
Battle: Passenger demand.
Battle: While there are still many months before the end of the year, we feel confident there a robust business model based on our hub of the Americas in Panama low unit cost diversified network and passenger friendly product makes us the best position airline in our region to consistently deliver.
Battle: Industry leading results.
Battle: Now I'll pass it over to Peter who will go over our financial results in more detail.
Peter: Thank you.
Peter: Good morning to all and thanks for joining our call today.
Speaker Change: First of all I'd like to join Pedro in recognizing our team for their dedication to the airline in our passengers.
Speaker Change: For the quarter, we reported a net profit of $176 8 million or four.
Speaker Change: And <unk> 28 per share.
Speaker Change: Representing a net margin of 19, 7%.
Speaker Change: Operating profit for the quarter came in at $213 $8 million and we reported an operating margin of 23, 8%.
Speaker Change: In terms of our balance sheet, we ended the quarter with over $1 $3 billion in cash short and long term investments.
Speaker Change: <unk> represents 39% of the company's last 12 month revenues.
Speaker Change: I'd like to highlight that this figure excludes over $600 million and pre delivery deposits for new aircraft.
Speaker Change: We have also 39 unencumbered aircraft in our fleet.
Speaker Change: In terms of debt, we ended the quarter with $1 9 billion in debt and lease liabilities and an adjusted net debt to EBITDA ratio of <unk> five times.
Speaker Change: I'd like to highlight that our average cost of debt, which is entirely related to aircraft financing remains at a highly competitive.
Speaker Change: An average rate of three 5%.
Speaker Change: With approximately 65% of this debt at lower fixed rates.
Speaker Change: I'd like to emphasize that our robust liquidity and strong balance sheet remains a key strength of the company.
Speaker Change: Turning now to our fleet during the quarter, we exercised options for six additional Boeing 737, Max eight aircraft to be delivered in 2028.
Speaker Change: With these confirm auctions are outstanding order book increased to a total of 57 aircrafts.
Speaker Change: We plan to retire one of.
Speaker Change: Of our nine Boeing 737, seven hundreds during the second half of the year.
Speaker Change: And we now expect to end 2025 with a total of 125 aircrafts during.
Speaker Change: In 2026, we expect to receive six Boeing 737, Max eight and preliminary end the year with a total fleet of 131 aircraft.
Speaker Change: Turning now to return value to our shareholders I am pleased to announce that the company will make its second dividend payment of the year of $1 61 per share on June 13 to all shareholders as of May 30.
As for 2025 outlook, we are increasing our operating margin guidance for the year to a range of 21% to 23%.
Speaker Change: We expect to grow year over year ASM capacity within the range of 7% to 8%.
Speaker Change: We're basing our outlook on the following assumptions load factor of approximately 86, 5% unit revenues of approximately 11 two.
Speaker Change: CASM ex fuel of approximately $5 eight.
Speaker Change: And we're expecting an all in fuel price of $2.40 per gallon.
Speaker Change: Of course, we remain mindful of the uncertain economic environment.
Speaker Change: As of now we see healthy passenger booking trends.
Speaker Change: But if this was to change we are confident that we are in the best position to continue delivering industry leading results.
Speaker Change: Thank you and we will now open the call to questions from the analysts.
Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Speaker Change: Yes.
Speaker Change: And our first question comes from the line of Savi <unk> of Raymond James Your line is now open.
Savi <unk>: Hey, good morning, everyone.
Savi <unk>: And I think Peter you mentioned that the demand environment is still healthy and then clearly that the headlines have changed quite a bit of a curious what.
Savi <unk>: If you've seen any kind of change in either in the U S.
Point of sales trends, there or kind of any regional differences since the last earnings call or is it just kind of consistent.
Savi <unk>: Consistent with what you've been seeing before.
Savi <unk>: Yeah.
Savi <unk>: Hi, Savi this is Pedro here.
We haven't seen any material change in the loss.
Savi <unk>: Few weeks lets say.
Savi <unk>: So so we're still seeing steady demand.
Savi <unk>: But as we know we only have visibility two to three months.
Savi <unk>: In the future. So so what's coming in the second half of the year is hard to tell at this point.
Savi <unk>: Makes sense and then maybe my follow up on.
Speaker Change: You know that eventually Pedro that competitive capacity in the region stepping up I Wonder if you can kind of talk a little bit about if you're seeing any changes on that front or yeah.
Savi <unk>: There isn't any certain regions, where you're seeing more pressure.
Savi <unk>: Yes, no we have not seen any changes lately again industry capacity, if we think over the next two quarters, which is where we have more visibility.
Savi <unk>: Overall industry capacity in our network in our region.
Savi <unk>: For the second quarter is growing in the neighborhood of 6%.
Savi <unk>: And a little bit higher close to 10% in the third quarter. That's why we're seeing right now but that is an average.
Savi <unk>: There are some competitors or maybe maybe a single competitor that's growing two or three times.
Savi <unk>: This pace in this region and others are flat.
Savi <unk>: Averages outgrows the numbers I just shared.
Patrick: Understood. Thank you Patrick.
Patrick: Thank you our next question.
Speaker Change: Our next question comes from the line of Duane <unk> of Evercore ISI. Your line is now open.
Patrick: Yeah.
Duane: Hey, guys good morning.
Patrick: Good morning.
Patrick: Just with respect to the distribution cost savings can you remind us.
Patrick: Sorry for the baseball analogy what inning you're in.
Patrick: Is there additional.
Patrick: Cost save to get in and are there other cost initiatives.
Patrick: Ken contribute incrementally from here.
Patrick: Yes, Duane I'll, let I'll, let Peter answer, but with Panamanians, you kind of use the baseball analogy no problem.
Patrick: Okay.
Speaker Change: Hello Duane.
Speaker Change: So thank you for the question I would say that our distribution costs were still seeing some full year effects of what we saw during the later part of the year. So we're going to see some of that during the first quarter.
Speaker Change: First half of the year and more to come on savings on our distribution strategy.
Speaker Change: And that it will it will flatten out, but we're still looking for additional initiatives. We believe there is.
Speaker Change: We are now at 85% direct or.
Speaker Change: Olivia MVC. So we feel that that's a good place to be and we expect that to be steady for the for the coming quarters.
Speaker Change: Yeah.
Speaker Change: Actually I would add that we recently added expedia to our MVC channel.
Speaker Change: So so that's another positive development in the right direction.
Speaker Change: Okay, Great and then just with respect to the fleet plan that the six deliveries that you called out.
Speaker Change: Next year can you just remind us where are you on your utilization relative to potential and and how do we think just big picture about the range of outcomes on growth into into 2026. Thank you.
Speaker Change: Yes, we it will in terms of utilization, we're always around 12 hours.
Speaker Change: On average and that's where we were in the first in the first quarter were about 12 hours of utilization and that should not change much.
Speaker Change: The future delivery factually, we strive for that number.
Speaker Change: Or in that range.
Speaker Change: And we're expecting 13 aircraft this year.
Speaker Change: Most are going to come we haven't received.
Speaker Change: Any aircraft.
Speaker Change: None in the first quarter and the first one we should get in this month of May we should get to in this month of May and then the third one.
Speaker Change: Should come in July.
Speaker Change: And then the rest are mostly towards the end of the year.
Speaker Change: So we won't see most of that growth impact. This year, we will see it in 2026 for sure I don't think we've shared a 2026.
Speaker Change: The ASM growth numbers yet right.
Speaker Change: But you can do your numbers I mean, most of the aircraft come towards the end of the year.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Okay.
Speaker Change: And our next question comes from the line of equipment of Mendez of Jpmorgan. Your line is now open.
Speaker Change: Hi, Pedro Peter Daniel Good morning, Thanks for taking my question first one is a follow up.
Speaker Change: First question in terms of demand.
Speaker Change: If you could break it down between leisure VFR incorporate how each of the segments have been performing at.
Speaker Change: And the second point on the RASM performance.
Speaker Change: You also mentioned that had been seen.
Speaker Change: That effects and competition has been impacting it but can you.
Speaker Change: Try to better understand that.
Speaker Change: Breakdown between the two offended two effects, which was it's it's it's putting more pressure on into Ross. Thank you.
Yeah.
Speaker Change: Okay. So I'll give you the breakdown then if peter needs to add anything.
Speaker Change: So.
Speaker Change: Business business.
Speaker Change: Around 20%.
Speaker Change: Right now.
Speaker Change: And Q1, and then leisure is about 45% I believe yes, so it's 20% business, 45% leisure and then the difference of course VFR in terms of the breakdown in terms of a route where I'll give you like.
Speaker Change: In overview.
Speaker Change: Quick overview, So South America is doing fine with the exception of Brazil, where we still have.
Speaker Change: Some yield weakness because of the currency situation load factors are healthy in Brazil.
Speaker Change: Better than last year, but yields are still down in Brazil, and the rest of South America. Okay.
Speaker Change: North America and the Caribbean. It's Okay also demand yields are fine.
Speaker Change: We see a little bit more weakness.
Speaker Change: Due to competitive capacity is in Mexico and Central America.
Speaker Change: Thank you our next question.
Stephen Trent: And our next question comes from the line of Stephen Trent of Citi. Your line is now open.
Stephen Trent: Good morning, gentlemen, and thanks very much for taking my question.
Speaker Change: Actually first just a quick follow up on what Joe was asking.
Speaker Change: I appreciate the color on business versus leisure and VFR any high level view on how that may have changed versus a year ago. Considering now for example.
Speaker Change: That there is no feed from the Venezuela market Alright, it's funny, just too small to move the needle.
Speaker Change: Right.
Speaker Change: It hasnt changed much it hasnt really changed much and nice.
Speaker Change: Really the Venezuela feed would have.
Speaker Change: <unk>.
Speaker Change: Well with this breakdown so so no we haven't seen any material changes.
Speaker Change: Oh, great. Thank you Pedro I appreciate that.
Speaker Change: And just.
Speaker Change: Another question as well when we think about.
Speaker Change: The slow andi.
Speaker Change: Cash from investing side I guess for the.
Speaker Change: Quarter itself.
Appreciate the color of that.
Speaker Change: You mentioned that most of the players haven't come in yet, but the <unk> cash from investing.
Speaker Change: Basically sort of financial transactions from you guys, but just wanted to make sure.
Speaker Change: Yes, most of it was financial investments.
Speaker Change: And we did pay pvp's of around $150 million during the quarter. The rest of it was mostly cash investments.
Speaker Change: Okay Super Thanks, very much gentlemen.
Steve: Thank you Steve.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from the line of Jan Spears of Morgan Stanley. Your line is now open.
Hello, Thank you for taking my questions and congrats on the strong results.
Speaker Change: Just want to ask.
Speaker Change: A hypothetical question.
Speaker Change: In case that you do see a bit more weakness across markets like how much flexibility.
Speaker Change: Do you have to potentially.
Speaker Change: Reduced capacity or not grow to the same extent.
Speaker Change: Yeah, Okay. So I will say a few things there.
Speaker Change: Number one we do have a lot of flexibility we have 39 on <unk>.
Speaker Change: <unk> aircrafts.
Speaker Change: Including the 737 709 of them were actually gone up part out of one in the second half of the year, because we have enough 737 Max eight.
Speaker Change: <unk> deliveries.
Speaker Change: And we actually will make will make money partying out of that aircraft, we don't need the extra capacity in the engines and other components are extremely valuable right now. So so it can be a good business to part out of American rapidly capture.
Speaker Change: Capacity is not needed we will save on the 20th year check. So we have 9700, we could park usually engines user components. We have another 30 unencumbered aircrafts. So that gives us a lot of flexibility in terms of what we do with our fleet, but I think as important to that is that we have a.
Speaker Change: Very diversified network and we have a number of markets a route where we actually could use more capacity. So if we see slow.
Speaker Change: Slowdown in certain markets, probably not going to be everywhere and we can shift capacity around one of the advantage advantages. We have is we have a single 737 fleet and our aircraft can serve any of our route. So we can move aircraft around.
Speaker Change: In case, one region slows down more than others.
Speaker Change: We feel pretty comfortable and I think we have demonstrated in the past that.
Speaker Change: We can be we can be flexible, we can adjust and continue delivering strong results under different.
Speaker Change: Environments.
Speaker Change: Perfect, Yes, I think you're already proving that so yeah. Congrats thank you.
Speaker Change: Yeah.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the lineup for January <unk> of Bank of America. Your line is now open.
Speaker Change: Hello, better Peter Congratulations on the results I have a couple here.
Speaker Change: First one you're guiding to for <unk>.
Speaker Change: Super gallon.
Speaker Change: But are we estimate the current oil price curve would point to a little bit 10% lower than that.
Speaker Change: Does it make sense and if so.
Speaker Change: Would there be about two percentage points of incremental margin if oil remains as it is.
Speaker Change: That's the first one thank you.
Speaker Change: Thank you so.
Speaker Change: When we built our guidance we took a occurred.
Speaker Change: We use a recent curve and as you know fuel is very volatile so.
Speaker Change: Can go up or down and we don't adjust our estimates daily.
Speaker Change: We feel comfortable right now with our fuel can RASM that we publish on the on the guidance and we feel that that should go very well with our guidance on margins at this moment and Thats, what we see of course everything can change tomorrow.
Speaker Change: Now with a clear information, we have we feel comfortable with our combination of RASM and fuel.
Speaker Change: And I'll add of course, if fuel stays where it is today.
Speaker Change: RASM stays where it is today.
Speaker Change: Yeah.
Speaker Change: Yes margins would be better but but.
Speaker Change: Yeah.
Speaker Change: And that does not and that's not in our guidance.
Speaker Change: Okay Fair enough. Thank you and the second one is on dividends, we estimate now a payout ratio of 36% for the year.
Speaker Change: Including the analysis of dividends is there further room for incremental payments or share repurchase.
Speaker Change: So we pay dividends based on last years.
Speaker Change: Earnings So right now we're paying a dividend.
Speaker Change: Our policy has been 40% of last year's net income.
Speaker Change: <unk> right now.
Speaker Change: Ida to maintain the dividend flat, so we're more or less at 44% of last.
Speaker Change: Last eight years and net income.
Speaker Change: And then.
Speaker Change: Buyback, we do have a plan that has been approved by the board.
Speaker Change: It's a $200 million plan we.
Speaker Change: We bought $87 million last year. So we still have 113 less less robust purchasing in Q1, which was a smaller amount of ours like <unk> III I believe so we have.
Speaker Change: Around $110 million left of that plan.
Speaker Change: Gradually.
Speaker Change: Do some buyback within what's approved by the board, which is among we're comfortable with.
Speaker Change: Okay, perfect very clear thanks, so much have a great one.
Speaker Change: Thanks.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of Michael Lindenberg of Deutsche Bank. Your line is now open.
Speaker Change: Oh, Hey, good morning, Pedro Peter Daniel.
I wanted to go back to the <unk>.
Speaker Change: Your assumptions for 2025, I thought it was interesting that.
Speaker Change: Even though we're going to see greater than a 10% cut in fuel thats the new assumption.
Speaker Change: That the RASM change, it's only a modest deterioration and I know that you called out yield pressures.
Speaker Change: It's being.
Speaker Change: An issue in the March quarter, you talked about competitive capacity in FX.
Speaker Change: Pressuring yields.
Speaker Change: Pedro and had passed when we would see energy prices move up when they were a function of improving global economy for the most part you would always be able to pass on call. It a 100% of that fuel price increase into the fare structure and now we're seeing it reverse but it looks like that youre actually holding the line on pricing and I am curious what what.
Speaker Change: Gives you the confidence and maybe the fact that you are growing very slowly this year youre only going to grow about 6% in the back half of the year is that giving you.
Speaker Change: The question.
Speaker Change: And the ability to really maintain pricing firm. Despite the fact that things may be actually slowing down.
Speaker Change: Just thoughts on that.
Speaker Change: Yes.
Speaker Change: A few things.
Speaker Change: Further it's still early in the year.
Speaker Change: Early in May we have a lot of.
Speaker Change: Runway ahead of us to.
Speaker Change: To cover so we're not getting ahead of ourselves our guy our RASM guidance is based on what we can see right now for the next two to three months.
Speaker Change: Where we see some weakness we have lowered our RASM.
Speaker Change: But not significantly as you as you well said.
Speaker Change: Ed.
Speaker Change: The visibility we have today a few in our curve is not as low as what it is today.
Julia: Julia mentioned mentioned that but is that.
Julia: What we saw kind of two weeks ago or a little bit more so so we're not like everyday adjusting our guidance on our outlook because of the volatile one.
Julia: In fuels. So so if we think of of worse, our fuel guidance and we think of our bookings right now two to three months in the future.
Julia: Our SMS.
Julia: Our RASM takes that into account.
Julia: And.
Julia: There is still.
Julia: Other developments.
Julia: Can happen in the year for example.
Julia: We're growing not that fast, which is which is a point you raised which is very true and so we're not actually dealing with overcapacity, we're actually tight in capacity. We wish we had a few more planes.
Julia: But thats not.
Julia: Our reality right now and then you know, Brazil could strengthen who knows.
Julia: One day, Venezuela could come back and so.
Julia: So it's early in the year, we're not getting ahead of ourselves.
Speaker Change: Okay, great. Thanks for that Pedro and then just one quick follow up you did call out weakness in Mexico.
Speaker Change: And I'm curious I know on the Valero call. They did talk about the new agreeing.
Speaker Change: Agreement that they had with you and I don't know if you can give us some details on it maybe it's just the codeshare, but I guess that agreement.
Speaker Change: In theory should help mitigate some of the weakness that youre seeing in Mexico, right, if youre able to code share too many of <unk> markets from I guess, what are you Sir for gateways in Mexico.
Speaker Change: Okay.
Speaker Change: For he is correct yeah.
Speaker Change: Monterrey, Guadalajara, Mexico City.
Speaker Change: And cancun or afford gateways in Mexico and yes.
Speaker Change: Weakness in Mexico comes mostly from competitive capacity and because we're not in the Mexico U S market, where in the Mexico to Latin America, and Caribbean market, which is very different and is not affected in the same way.
Speaker Change: But there is more capacity in that market and that's why we've seen some weakness although load factors were quite okay steel.
Speaker Change: The rollout is agreement is very positive we will gauge feed to your Mexico is the second largest market in Latin America, Brazil, and it has many many large cities.
Speaker Change: We're not going to be flying too, but connecting with through the rollout of these networks, especially out of places like the city of Mexico, and Guadalajara is going to be a very positive development no doubt.
Speaker Change: Okay, great great numbers this quarter.
Speaker Change: Yes.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of a better Valerio of UBS. Your line is now open.
Speaker Change: I'm not saying all from Brazil.
Valerio: And Peter Thank you for taking my question.
Speaker Change: A follow up on the previous questions on about capacity.
Valerio: We see with the tariffs.
Speaker Change: Turning to <unk>.
Speaker Change: <unk> carriers of ultra precision aircraft this year.
Kennedy: Kennedy's benefit Copa.
Kennedy: Also China, if they do not receive the Boeing 737, Max that you're expecting to receive Ken.
Kennedy: <unk> anticipates some deliveries for this year or the beginning of next year. Thank you and then thank you and congrats political Paul So the results. Thank you.
Kennedy: Sure.
Kennedy: We.
Kennedy: We're not seeing that right now.
Kennedy: Our deliveries are going to be what what we have communicated we don't really see an opportunity to add that we would love to do so but.
Kennedy: And one of the information we get we get from Boeing is that.
Kennedy: Our deliveries are not really going to change at least theyre not going to be year on year.
Kennedy: I mean, they might gear.
Kennedy: Bye Bye a few weeks or something if Boeing has a little bit more more.
Kennedy: The available capacity, but nothing significant those are not the signals we're getting.
Speaker Change: Thank you Jason.
Kennedy: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of Thomas Fitzgerald of TD Cowen. Your line is now open.
Thomas Fitzgerald: Alright, thanks, so much for the time.
Thomas Fitzgerald: Quick one on other operating revenue you called out an increase in connect miles from non Air partners would you just elaborate on what was that like one partner in particular, who what where were some of the drivers behind that.
Thomas Fitzgerald: Yes.
Thomas Fitzgerald: So where are our connect miles program has been mature and it has been growing at a decent rate and not necessarily with one partner in particular it has been a non air partner. It has been growing with different partners across the region and open up in different countries. So we.
Thomas Fitzgerald: We see that it's been growing steady and were happy to see that growth continue and it's mainly of course bank partners.
Thomas Fitzgerald: We are.
Thomas Fitzgerald: Opening up relationships in country in new countries.
Speaker Change: Okay. Thanks, that's really helpful. And then just another quick one on the fleet just what the options in 2028.
Speaker Change: I know, it's far off in fluid, but just any sense of how we should think about the <unk>.
Speaker Change: Neither of the fleet and $27 28, because as people kind of start looking out beyond 26, thanks again for the time.
Speaker Change: Yes, we have yes, we have.
Speaker Change: 57.
Speaker Change: 707, Max's pending delivery.
Speaker Change: This year, we're supposed to get 13, and then the following year in 2026 and a number of six.
So you can deduct those from from the 57.
Speaker Change: And the others are going to come mostly in the following four years.
Speaker Change: Actually all in the following four years.
Amit: Thank you Amit for next question.
Speaker Change: And our last question comes from the line of Daniel Mckenzie of Seaport Global Your line is now open.
Daniel Mckenzie: Oh, Hey, Thanks for squeezing me in you guys.
Daniel Mckenzie: Couple of questions here going back to <unk> question, a follow up on the U S can.
Daniel Mckenzie: Can you remind us of how it's performed historically say under a garden variety downturn, so stable more volatile than and I think what's new by the way today is just a deeper relationship to star, which I think is contributing to some premium revenue as well as investments in our Latin America from other countries that are driving some growth in there.
Daniel Mckenzie: So just trying to get a sense of the puts and takes on U S demand in and how that could potentially.
Daniel Mckenzie: <unk> be offset elsewhere.
Daniel Mckenzie: Yeah.
Daniel Mckenzie: Domestic fore cautiously optimistic we never.
Daniel Mckenzie: Ever.
Daniel Mckenzie: Get too excited about anything but.
Daniel Mckenzie: When.
Daniel Mckenzie: When sometimes when the U S flows down it becomes.
Daniel Mckenzie: Better.
Daniel Mckenzie: And more affordable.
Daniel Mckenzie: <unk> shorter distances to our part of the world versus growing to your operation. So.
Daniel Mckenzie: So that's one way we could we could see demand less affected than what one would expect also a recurring fees in Latin America strengthen.
Daniel Mckenzie: We sell more.
Daniel Mckenzie: In South America that in North America, although not asking balance as before is it's much more balanced.
Daniel Mckenzie: But then so the currency strengthen in South America, and the economies are doing well and we can get more traffic and growing south to north. So we're very diversified in the type of our markets and the type of traffic.
Daniel Mckenzie: The countries we serve.
Daniel Mckenzie: Very very spread out also in a way so in the past, we've been able to adjust capacity and the market demand.
Daniel Mckenzie: The mine has adjusted in the market by itself also has rebalanced so.
Daniel Mckenzie: So we feel we're in a good position now.
Daniel Mckenzie: Also I should add that we have industry, leading low cost, which also allow us to be very competitive under any circumstance.
Daniel Mckenzie: Hum.
Daniel Mckenzie: And then second question here.
Speaker Change: And to the extent that you can comment on star premium revenues well, but the second question here on the schedules data I am seeing some growth to some vacation destinations or at least it looks like that so just a couple of questions on that.
Speaker Change: Can you remind us of if Copa has a vacations package and then if so how that's contributing to the financials and how would you think about the opportunity of that product in the future.
Speaker Change: Yes, we don't we don't really have I mean, we have an <unk>.
Speaker Change: Within our commercial department, we have.
Speaker Change: We have a team that looks after our let's say vacation wholesale wholesalers.
Speaker Change: And we have good relations ship with a relationship with a group of wholesalers in South America, mainly but in other countries in the U S. Also but we don't have a specific.
Speaker Change: Vacation focus.
Speaker Change: Do deal with the wholesalers and we are very active.
Speaker Change: Yeah. So.
Speaker Change: Okay.
Speaker Change: Okay. Thanks, so much for the time you guys.
Speaker Change: Thank you Dan. Thank you I'm showing no further questions at this time I'll now turn it back to Pedro <unk> for closing remarks.
Speaker Change: Yeah. Thank you.
Speaker Change: So thank you all.
Speaker Change: This concludes our earnings call. Thank you for being with US and thanks for your continued support as always.
Speaker Change: Have a great day. Thank you.
Speaker Change: Ladies and gentlemen, thank you for your participation that concludes the presentation you may disconnect and have a wonderful day.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].