Q2 2025 Grupo Aeroportuario del Pacifico SAB de CV Earnings Call

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Good day, everyone, you're on. Hold for today's Gap conference call and we'll be starting shortly please stand by. As we continue admitting additional participants. Thank you.

Operator: Good day, everyone and welcome to GAP's conference call. At this time, all lines have been placed on mute to prevent any back After the presentation, we will open the floor for questions, and at that time instructions will be given if you would like to ask a question.

Operator: Now it's my pleasure to turn the call over to GAP's investor relations. Please go ahead.

Unknown Executive: Thank you and welcome to GAP second quarter 2025. Prior to introducing GAPS management.

Speaker Change: Good day, everyone and welcome to gaps conference. Call at this time, all lines have been placed on mute to prevent any background noise. After the presentation, we will open the floor for questions and at that time, instructions will be given if you would like to ask a question. Now, it's my pleasure to turn the call over to gaps investor relations team. Please go ahead.

Unknown Executive: I would like to take a few moments to read the forward-looking statements as described. Please be advised that the information shared today may include forward These may not account for future economic circumstances, industry conditions, the company's future performance, or financial results. As such, any information discussed is based on several assumptions and factors that could change.

Speaker Change: Thank you and welcome to Gap. Second quarter 2025 conference call prior to introducing gaps management team. I would like to see a few moments to read the forwards. Open statements, as described in the financial disclosure statement.

Unknown Executive: For a complete note on forward looking statements, please refer to the quarter Thank you so much for your attention.

Speaker Change: Please be advised that the information shared today may include forward-looking statements. These may not account for future economic circumstances industry conditions the company's future performance or financial results. As such any information discussed is based on several assumptions and factors that could change causing actual results to materially differ from the current expectations.

For complete note on forward, looking statements, please refer to the quarterly report.

Unknown Executive: I'd like to present our...

Raul Revuelta: Sponsored by Raul Revuelta, Shipping.

Saul Villarreal: and Mr. Saul Villarreal, Chief of Staff. I will turn the call over.

Unknown Executive: What's up for his opening.

Speaker Change: Thank you so much for your attention. I'd like to present our speakers today chief executive officer and Mr. Salo to financial officer. At this time, I will send a call over to Mr. The 1 for his opening new month, please begin.

Raul Revuelta: Good morning, everyone. And thank you for joining us today.

Raul Revuelta: I'm pleased to be able to share with you GAP's key operational high and financial highlights for the second quarter of this Overall, it was a solid quarter, marked by a continued growth in revenue, EBITDA, and net income. This was achieved despite ongoing headwinds due to the drug economics issue and FX policies.

Speaker Change: Good morning everyone and thank you for joining us today and pleased to be able to share with you gaps, keeps operational high and financial highlights for the second quarter of this year.

Speaker Change: Overall, it was a solid quarter Market by a continued growth in Revenue Aida and net income.

Raul Revuelta: Let me begin with a discussion of total passenger traffic. We've reached 15.8 million representing a 4.1% increase if we compare it to the same quarter of 2020. It is also important to mention that eight new routes were added this quarter, seven domestic and one international, which brings us to 21 total new routes so far this year. I should mention that we are still expecting to announce additional rates and frequencies during the second half of 2025. In this regard, we have already announced additional frequencies and new international routes starting November to Canada, including services from Guadalajara to Montreal, Toronto, and Calgary.

Speaker Change: This was achieved this title on growing headwinds due to the Draco economics issue and FX volatility.

Speaker Change: Let me begin with a discussion of top passing this traffic.

Speaker Change: We reached 15.8 million representing a 4.1% increase. It will compare it to the same quarter of 2024.

Speaker Change: It is also important to mention that 8. New words were added to this Square 7, domestic and 1 International. Which bring us to 21. Total new words so far this year.

Speaker Change: That we are still expecting Finance additional rates and frequency during the second half of 2025.

Speaker Change: In this regard.

Speaker Change: We have already announced additional frequencies and new international roads starting November to Canada including services from guara.

Raul Revuelta: from Puerto Vallarta to Toronto, Ottawa, and Hamilton. and from Montego Bay to Halifax and Ottawa. Canada continues to be an increasingly relevant market to leisure and BFR, especially during the winter season. These new routes will not only expand our network but also enhance our ability to capture seasonal demand and strengthen our position in key international markets. That said, market conditions change rapidly, as you know, with measures cautious when looking ahead at the upcoming traffic trends. Thus, we will closely watch any changes as they occur and make adjustments as needed. Mainly, our concerns include the stricter U.S.

Speaker Change: To Montreal, Toronto and Calgary.

Speaker Change: From Puerto ricotta to Toronto, Otawa and heimito, and from Montego Bay to Halifax and Ottawa.

Speaker Change: Canada continues to be an increasingly relevant Market to issue and bfr, especially during the winter season. This new Roots will not only expand our network, but also enhance our ability to capture seasonal demand and strengthen our position in international markets.

Speaker Change: That say market conditions, change rapidly as you know, with Nature's cashions when looking ahead at the upcoming traffic Trends, thus we will closely watch any changes as they occur and make adjustments as needed.

Raul Revuelta: migration and enforcement policies under the current administration, which tends to discourage travel among the BFI international passenger space. By our estimates, the segment represents approximately 38% of GAP's international traffic. As a result, what we see is that a portion of these travelers may opt not to travel outside the U.S. in order to avoid any potential compensation with their immigration status. We believe this could impact international traffic, specifically in the U.S.-Mexico world. But overall, we expect to maintain our initial annual guidance as previously announced. Having said that, revenues generation excluding AFRIC 12 grew by 30.6% year-over-year, reaching 8.2 billion pesos, driven by a 26.4% increase in aeronautical revenues and 41.8% increase in aeronautical revenues.

Speaker Change: Mainly our concerns include the stricter us migration and enforcement policies under the current Administration which tends to discourage US Travel among the bfr international passenger space.

Speaker Change: Firework Tomatoes, The segments represent. Approximately 38% of gaps International traffic.

Speaker Change: As a result, what we see is that a portion of this Travelers May opt not to travel outside the US in order to avoid any potential compensation with their immigration status.

Speaker Change: We believe this call impact International traffic, the statistical in the US, Mexico Goods.

Speaker Change: but overall, we expect to maintain a initial annual guidance, guidance of pre announced

Raul Revuelta: And excluding the acquisition of the cargo facility, it represents a solid 14% increase. This strong top-line performance was mainly supported by the implementation of studies that took effect in March 2025. The continued pressure depreciation, which averaged around 13.6% versus the second quarter of 2014, as well as a 41% of total passenger traffic increased across our 14 airports. On the non-aeronautical side, commercial performance was solid. Revenues from business lines operated directly by GAP increased by 113%, driven by the consolidation of the cargo and bonded warehouse business. Third-party operated business also grew by 10.7% with significant contribution from food and beverage retail, duty-free, ground transportation, and time-shares.

having said that revenues Generations could affect Trails grew by 30.6% year-over-year. Reaching 8.2 billion pesos driven by a 26.4% increase in our Ronaldo and 41.8% increase in neuronal revenues

Speaker Change: And explaining that position of the cargo facility, is represents a solely for solid 14% increase.

Speaker Change: This is a strong Topline performance, was mainly supported by the implementation of studies that took effect in March 2025.

Speaker Change: The continued pressure representation which other us around 13.6% versus the second quarter of 24 as well. As 1% of total passengers traffic increased across our 14 nervous,

On the Northern Optical side commercial performance was following revenues from business lines. Operated directly by Gap, increased by 113% driven by the consolidation of the cargo and Bonded Warehouse business.

Raul Revuelta: EBITDA increases by 31.1% reaching 5.5 billion pesos with an EBITDA margin of 67.1% excluding IFRIC costs. As we discussed in previous quarters, the margin reflects the operating cost integration of the new business, such as bounded warehouse business and the hotel, which while contributing positively in absolute terms, have lower individual margins. The cost increase during the quarter reflects the impact of higher operational expenses. Additionally, maintenance expenses increased by 57.3% related to the airfield improvements, the opening of new operational areas, as well as the operation of the jet bridges and the airbuses, a task that previously was managed by third parties, but must now be operated directly by GAAP due to the new regulations.

Speaker Change: Third party operated business also grew by 10.7%, which changes can contribution from food, and beverage retail Beauty, free ground transportation and time shares.

Speaker Change: About 31.1%, which in 5.5 billion pesos with an every that marking margin of 67.1%. A student i3.

Speaker Change: As we discussed in previous quarters, the margin reflects the operating cost integration of the new business such as bounded, Warehouse, business, and the hotel, which while contributing positively in absolute terms, have have lower individual margins. The cost in queue. During the quarter, we reflect the impact of higher operational expenses.

Raul Revuelta: Despite the higher pressure on the cost of services, our focus remains on controlling costs, while at the same time ensuring that service quality across our airports remains top-ranked.

Speaker Change: Additionally, maintenance expenses, increase by 57.3% related to the Airfield improvements, the opening of new operational areas, as well as the operations jet Bridges, and the air bosses, as past the previous manage that third parties, both must now be operated directly by Gap, due to the new regulations.

Speaker Change: despite,

Raul Revuelta: Operating income increased by 30.4% and net income by 17.9%, reflecting gap solid underlying fundamentals.

Speaker Change: The pressure of the cost of services, our Focus remain on controlling cost. While at the same time ensure that service quality across our records. We remain stopped rate

Raul Revuelta: Turning to our financial position, as of June 30, we held by 9.7 billion pesos in cash and cash equivalent. During the quarter, we paid the 2.5 billion pesos CAHPS 21-1 bond, the first tranche of dividends approved in the last shareholding meeting, and additionally, we secured a 3.4 billion pesos credit facility from Banamex. These funds were used to concentrate short-term debt with Banamex and WBA on a five-year loan. We continue to actively manage liabilities and maintain a healthy balance sheet with a net debt area ratio of 1.8 times.

Speaker Change: Operating income increased by 30.4% and net income by 17.9% reflecting Gap, solid underlying fundamentals.

Speaker Change: Turning to our financial position as of June 30th. By 9.7 billion pesos in cash and cash, equivalents

Speaker Change: Gaps 21, 1 Bond, the first branch of dividends approved in the last shareholders meeting.

Speaker Change: An additional, we secured a 3.4 billion pesos, credit facility from banamex.

Speaker Change: These funds were used to concentrate short-term debt with banamex and Daya on a 5 years loan.

Raul Revuelta: Let me now touch briefly on CapEx. During the first half of 2025, GAAP executed capital investments of about 12.8 billion pesos in line with our annual plans of 13.3 billion. This quarter, the investments were mainly focused on the international of key projects with early as such construction activities already underway. This includes works on both airside infrastructure and commercial areas. Looking ahead, we remain cautiously optimistic while pace of volatility and U.S. macroeconomic conditions may impact discretionary travel. We are confident that our diversified aeroport portfolio and resilient domestic markets position us well to finish the year strong.

Speaker Change: We continue to actively manage liabilities and maintain a healthy balance sheet with a net debt, AI ratio of 1.8 times.

Speaker Change: Let me now touch briefly of on capex.

Speaker Change: During the first half of 20245, Gap, execute Capital Investments of about 12.8 billion pesos in the line with our annual plans of 13.3 billion.

Speaker Change: This quarter, the Investments were mainly focused on the international of key projects with early stage construction activities already on the way.

Speaker Change: This includes works on both their sides since our culture and Commercial areas.

Speaker Change: Looking ahead. We remain cautiously optimistic.

Speaker Change: While peso volatility and US, microeconomics conditions may impact this customer travel.

Raul Revuelta: I would like to mention that at the shareholders meeting held last April, a dividend of 16.84 pesos per share was approved by our for payment throughout 2025. The first tranche was already distributed in May, with the remainder scheduled for the second half of the year, reinforcing our commitment to delivering value to shareholders while supporting growth throughout discipline investment. We are focused on continuing to execute our investment plan while prudently navigating traffic and maintaining the operational and financial excellence that we are known for. We are confident that our diversified revenue base and solid financial position will support the creation of long-term value shareholdings moving forward.

Speaker Change: We are confident that our diversify your portfolio and resilient domestic markets position as well to finish the Year Strong.

I would like to mention that at a shareholders meeting held last April a division of 16.84 pesos.

Speaker Change: Per share was approved by for payment throughout 2025.

Speaker Change: The first Branch was already distributed made with a M schedule for the second half of the Year, reinforcing our commitment, to delivering value to shareholders while supporting growth throughout discipline investment.

We are focused on continuing to execute our investment plan. We are productively navigating traffic and maintaining the operational and financial Excellence that we are known for

Raul Revuelta: Before concluding, I wish to mention that, as we informed during the previous conference call, We continue to pursue strategic expansion opportunities. As such, the outcome of the $1,000,000 cost tender process was not being announced, and we are waiting on that. We also continue to evaluate our participation in the potential acquisition of CCR Airport SAF.

Speaker Change: We are confident that our our diversify Revenue base and solve the financial position will support the creation of long-term value shareholders. Moving forward.

Speaker Change: Before concluding.

Speaker Change: I wish to mention that as we informed during the previous conference call.

Speaker Change: We continue to pursue strategic expansion opportunities.

Speaker Change: As such the outcome of the third, and take cost, 10 rep process, was not being announced, and we are waiting on that.

Raul Revuelta: Thank you again for your time.

Speaker Change: We also continue to evaluate our participation in the potential acquisition of CCR airports assets.

Operator: Operator, please open the line for questions. At this time, we'll open the question and answer If you'd like to ask a question, please press star one on your phone now, and you'll be placed into the queue in the order. You may remove yourself from the queue at any time by pressing pound. Again, to ask a question, press star one, and we'll pause.

Speaker Change: Thank you again for your time, operator, please open the line for questions.

Speaker Change: At this time, we'll open the question and answer session. If you'd like to ask a question, please press star 1 on your phone now and you'll be placed into the queue. And the order received, you may remove yourself from the Queue at any time by pressing pound 1. Again to ask a question press star 1 and we'll pause for a moment.

Stephen Trent: Our first question comes from Stephen Trent from Citigroup. Please go ahead. Good morning, Raul. Good morning, Saul. And thanks for taking my question. We appreciate the color on the potential intergranting opportunities with Turks. You know, when you look at the broader environment, is there a lot else out there? You know, I recall Barbados. Pushing doing something that seems to have stopped or do you see these opportunities?

Speaker Change: Our first question comes from Stephen Trent from Citigroup. Please go ahead.

Raul Revuelta: you know, relatively rare in terms of What else you might be able to buy. Thank you, Stephen.

Stephen Trent: Okay, good morning row, good morning s, and thanks for taking my question. Um, appreciate the color on the potential inorganic opportunities with, uh, Turks and cos and and CCR. You know, when you look at the broader environment, um, is there a lot else out there? You know, I recall, Barbados was pushing doing something and that seems to have stopped or do you see these uh opportunities as you know, relatively rare in terms of uh what else you might be able to buy? Uh, thank you.

Raul Revuelta: I mean, the air force assets, the ones that we are pursuing in some way, are always the one that has this Potential future growth in passengers, but also, let me say, the correct level of possible profitability on the asset. In that way, I will say that there's In all the Latin America and the Caribbean, there will be some different opportunities, but not necessarily all of these opportunities will be as we have the correct return that we are looking for.

Stephen Trent: Thank you. I mean, the therefore have it. The ones that we are pursuing? In some way are always the 1 that have this

Stephen Trent: Potential, future growth and passengers. But also let me say the the correct level of possible profitability on on, on on the asset.

Stephen Trent: in that way, I would say that there's

Stephen Trent: in all the Latin America and the Caribbean, there will be some different opportunities

Stephen Trent: But not necessarily all of these opportunities will be.

Raul Revuelta: I will close saying that... The correct assets would be in some way not a lot as we see in the market. Say in other words, today we are analyzing some of the rear assets that in some way has the correct return for, or could have the correct return for GAAP. Great stuff, that's very helpful, Raul, appreciate that.

As a will have the the the correct return that we are looking for. I I I I will close saying that.

Stephen Trent: Not a lot. As as as as as we we see in the market, say in other words, today we are analyzing

Stephen Trent: Some of the rear assets that in some way, has the the, the correct return for or could have the correct return for for example.

Stephen Trent: Just one quick follow-up question, and apologies if I missed it. I recall that there was some opportunity for you to do something with a hotel. Guadalajara Airport.

Raul Revuelta: And if you could just refresh my memory, where things stand with Thank you, Stephen. The hotel in Guadalajara is doing pretty good. I mean, we have our first year of operation on the first week of April. Let me say that we are achieving a really interesting level of tariffs in one hand, in other words, around the 2,500 pesos in average, and also we are getting the occupancy rate around 80 percent. So for a first year, I would say that it's a really great beginning of operation of our first hotel.

Great stuff. That's that's very helpful. I will appreciate that. Just 1 quick, follow-up question. Um, and apologies if I missed it, I recall that there was some opportunity uh, for you to do something uh, with a hotel and the guadalahara airport. Um, and and if you could just refresh my memory where things stand uh, with uh, with that potential, thanks,

Speaker Change: Thank you, Stephen. I mean the the the hotel is doing pretty good. I mean we we have our first zero preparation on on the first week of April. Let me say that we are achieving uh willing interesting.

Speaker Change: little of times in 1 hand, in other words around the

Speaker Change: In 201500 pesos in aberage. And also we are getting the the the occupancy rate around 80%. So, for a first year, I would say that it's a a really great beginning of operation of of of our first hotel.

Stephen Trent: Great color. Thank you again.

Great color. Thank you again. Royal

Pablo Monsivais: Our next question comes from Pablo Monsivais of Barclays. Hi, Raul, Saul, Ale. Thanks for taking my question.

Pablo Monty: Our next question comes from Pablo Monty Vice of Berkeley.

Pablo Monty: Hi. Uh,

Pablo Monsivais: My first one is about the tariffs. As of now, how much of the authorized tariff increase have you already incorporated? And what should we expect in terms of further adjustments going forward?

Saul Villarreal: Thank you. Pablo, could you repeat it? I mean, we have a loss of communication for a second. Yes, I was referring to the tariffs. As of now, how much of the authorized tariff increase have you already incorporated? And what should we expect in terms of further adjustments going forward of the tariff?

Pablo Monty: I was I will. Uh thanks for taking my question. My first 1 is about the tires. Uh, as of now how much of the authorized tire is increased? Have you already Incorporated, and what should we expect in terms of further adjustments going forward? Thank you.

Pablo Monty: Could you repeat it? I mean, we have a a lot of communication for a second.

Pablo Monty: Yes. Uh, I was referring to the tariffs as of now, how much of the authorized tariff increase have you already Incorporated, and what should we expect? In terms of further adjustments, going forward of the ties,

Saul Villarreal: Hi, Pablo, this is Saul. Well, as we mentioned in the previous conference calls, we are seeing how is the market trend, and we will try to make it in different stages. The first one was already implemented in last March. We are expecting to have in January 26. We are analyzing if it's possible to have another one during 2025. That is complicated to say now, and it's complicated to see because there are decreasing in trending traffic. We are waiting to see what is that trend, the trend concerning the migration. Action from U.S. government and could imply a little decrease in terms of a BFR market for our airport.

Pablo Monty: Hi Paulo. This is well as we mentioned in the previous conference calls, we are seeing how is the market Trend and we will try to make it in different stages. The first 1 was already implemented in last March we are expecting to have in January 26th, we are analyzing if it's possible to have another 1 during 2025, that is is complicated say now and it's complicated to to to see because the the decreasing in in training traffic in and we are waiting to say what is that that that train the train concerned, the immigration

Saul Villarreal: So we will analyze it, but what is pretty sure to have a second adjustment at the beginning of 2016.

Saul Villarreal: I'm just calling for. Unknown Speaker Yeah, I mean, the main goal would be that I mean, trying to close as close as possible of 90% of fulfillment of this year. And for sure, in the coming year, we are trying to do an important adjustment. Just for the reminder of everybody, it is important to mention that the fixed rates and the possible appreciation of the PESO in some way are pressured the fulfillment of the maximum tariff. So that is another variable to review really, closer in the coming months. Of course, and kind of a follow up to this, have you seen this particular negotiation, airlines being much more vocal, or pushing back harder in terms of of tariff increase or has been business as usual?

Pablo Monty: Action from the US government and that could imply a little decrease in terms of bfr Market to our airport. So we will analyze it. But what is pretty sure to have a second second judgement at the beginning of 26.

And and and just for for sorry.

Pablo Monty: Yeah, I mean the the main there will be that. I mean trying to close as close as possible of 90% of fulfill

Pablo Monty: Of this year.

Pablo Monty: And for sure I'm coming here we we are trying to do a an important important adjustment. Just for remind us of of everybody is important to mention that the fixed rate and the the possible application of the pixel in some way are, are pressure the the, the, the Fulfillment of the maximum price. So that is another variable to to, to review, really, really closer in the in the coming months.

Of course and uh, and and kind of a follow up to, to this, have you seen this particular negotiation Airlines? Been much more vocal or pushing back harder in terms of, uh, of tariff increase or has been a business as usual?

Saul Villarreal: I will say that. The normal is nothing different, I would say, on the market. It's not only of Mexico, it's a national, it's an international, I would say, trend that always, in some way, the airlines would be more vocal about any changes on the tariffs of an airport. But I'm seeing, Pablo, that still, in the same way that in the past, I'm not seeing any, any, I would say, change on how vocal are the airlines about the possible change on tariffs.

I would say that.

Pablo Monty: The normal is nothing, nothing, nothing different. I would say in the, in the market,

Pablo Monty: International. I would say Trend that always the, the the in some way the airlines would would be more vocal about the any changes on on the on the tires of an airport. But what I'm seeing, Pablo that's still in the same way that in the past. I'm not seeing any any I would say change on, on, on how vocal are the dings about the, the the possible change on cars?

Saul Villarreal: Perfect, thank you.

Speaker Change: Perfect, thank you.

Fernanda Recchia: Our next question comes from Fernanda Recchia. from BTG. Hey, Raul, Saul, Ale, thank you for taking my question.

Speaker Change: Our next question comes from Fernando reia.

Speaker Change: From btg.

Fernanda Recchia: Two here from our side as well.

Fernanda Recchia: The first, just wanted to dive deeper on the traffic trends. Yesterday, Valerio mentioned stabilization in the softness of demand in the cross-border region by mid-Q2. Just wondering if you have seen the same trend, and if we should anticipate and improve the second half of this year.

Raul Revuelta: And second, I just wanted to dive deeper on the inorganic growth that you mentioned. If you could share with us any timeline for the answers from Turks and Caicos and the CCR process. And also, I wanted to understand if you have appetite for the whole portfolio of CCR or just the international airports. Thank you. Thank you Fernanda and Raul. In terms of the traffic trends, yeah, we are seeing that after some changes on the migration policies under the Trump administration, we saw some decrease in the number of passengers in VFR routes that could be some of Guadalajara-Los Angeles, Moreno-Los Angeles, Marina Oakland, the most, I would say, Biggest BFR needs room.

Speaker Change: Hey, thank you for taking my question uh, to hear from our side as well. Uh, the first uh just wanted to dive deeper on the traffic Trends. Uh yesterday various mentioned, I believe in this softness of demand in the cross border, region by uh mid Q2 just wondering if you have seen this the same Trend. And if we should anticipate and improve it, second half of this year.

Speaker Change: And and second, I just wanted to uh like give her uh like dive deeper on the inorganic growth that you mentioned. Uh if you could share with us any um, timeline for uh, the answers from uh, Turks and Caius and the CCR uh process. And also I want to understand if uh, you have appetite for the Hope portfolio of CCR or just the International Airport. Thank you.

Speaker Change: Thank you in terms of the traffic Trends. Yeah, we are seeing that. After some changes on my, my ration policies on the under the Trump Administration. With some, we saw some decrease in number of passengers in bfr. Ra could be some of. But the most I would say

Raul Revuelta: Saying that, I think that day by day it's more clear for our passengers and for the BFR. Market. which would be the possible policies. And they are, I think. could begin to feel more, I mean, comfortable to fly on the coming month. As soon as they know that. Clear rules about the coming back to home, that the green cards are working, as always, for coming back, that they are not seeing cancellation of green cards on the border, and this kind of thing. And I will say that I'm in the same way that Polaris mentioned in their conference call, that we expect that some of the passengers that in some way change their plans for flying to Mexico because all the changes of the migration policies, for today they have more clear information and they will finally fly on the coming months.

Speaker Change: Biggest bfr roads.

Speaker Change: Saying that I think that day by day is, it's, it's, it's more clear for for, for our passengers and for the bfr.

Speaker Change: Market.

Speaker Change: which would be the the, the possible, the possible policies and they are, I think

Speaker Change: could begin to feel more, I mean comfortable to fly and becoming

months.

Speaker Change: As soon as they know that.

Speaker Change: Clear rules about the coming back to home that they bring cars are working as always for coming back that they are not seeing cancellation of green cards on on on the border and this kind of things. So

Speaker Change: I'm I'm I would say that I'm in the, in the same way that politics mentioned in the in the conference call that we expect that some of the passengers that in some way, change their plans for applying to Mexico because all the all the changes of of of migration, the migration policies

Raul Revuelta: But again, it's something really changing day by day, so that is important to keep in mind.

Raul Revuelta: The other part I would say that is still the elephant in the room is that we continue to not have complete information about the fleet or the ground fleet of Vivalo and Polaris, mainly due to the Pratt and Whitney engines. So I will say that one of the key factors for understanding the trend on the coming months and the coming years will be when all these planes will come back to flight again. So that will be an important part to understand on the coming months. In terms of the inorganic growth, we are expecting and continue expecting the annual for Turks and Caicos and we are expecting that in some moment during this year, we're going to have the final decision for that government.

For today, they have more clear information and they will finally fly on the, on the on, on, on, on the coming months. And again, it's something really changing day by day. So so it is time. That is time important to have in mind. The other part, I would say that that fits in the in the still be the the I will say the elephant in the room is that we continue to not have complete

Speaker Change: Information about the sleep or the grounding sleep of of Vivo and car mainly due to the pattern we need. So I would say what that 1 of the key key factors for understand the trend on the coming months and the coming years will be will be

Speaker Change: When?

Speaker Change: All these planes will come back to fly again. So that, that will be a an important. An important part to understand oncoming months

Speaker Change: in terms of the inorganic growth,

Raul Revuelta: And for the case of CCR, we are still on the analysis. I mean, for the moment, the way that the company has released the opportunity is for all the portfolio, but we are analyzing asset by asset and as soon as we are ready for making a formal position or a possible bid, I mean, all the markets will know. I will say that we are analyzing all the different assets that are in the portfolio of CCR.

Speaker Change: we are expecting and continue expecting the as well for cars and take us, and we are expecting that in some moments. During this year, we want to have the final decision for, for, for, for, for that government.

Speaker Change: And for the case of CCR, we are still on the analysis. I mean, for the moment, the way that the company has released the opportunity is for all the portfolio but we are analyzing assets, the assets. And as soon as we are ready for make a, a formal position or or or or a possible bit, I mean, all the market will will know. But I I would say that we are an ally in

Speaker Change: All the different assets that are in the, in the portal for CCR.

Fernanda Recchia: Okay, thank you very much.

Speaker Change: Okay, thank you very much.

Guilherme Mendes: Our next question comes from Guilherme Mendes of JPMorgan. Hey, good morning, Raul, Saul. Thanks for taking my question. The first one is a follow up on the Motiva slash CCRs portfolio.

Jedi Mendes: Our next question comes from Jedi Mendes of JP Morgan.

Guilherme Mendes: You think that assuming that you buy the whole portfolio, that would require some kind of new equity injection, or it would be comfortable to increase your leverage for a period of time. And if that's the case, if dividends could be impacted somehow.

Jedi Mendes: Hey, good morning Rose. So thanks for taking my question. Uh, the first 1 is a follow-up on the motiva ccrs, uh, portfolio.

Speaker Change: Uh, you think that assuming that you buy the whole portfolio that would require some kind of new Equity injection?

Guilherme Mendes: And the second point, it's a question related to what Volaris mentioned yesterday on the conference call about unbundling the airport. Our understanding is that there's no impact to gaps or in any of the airport operators, but I just wanted to confirm this understanding. Thank you, Guilherme.

Uh, or you would be comfortable to increase your, your leverage for, uh, a period of time. And if, if that's the case, if the event could be impacted, uh, somehow, and the second point is, it's a question related to what Polaris mentioned yesterday on the conference call about unbundling, the airport fees. Uh, our understanding is that there's no

Impact to gaps or any of the airport operators, but just wanted to confirm this understanding. Thank you.

Raul Revuelta: In terms of the CCR portfolio, I mean, we're still on the analysis. But even with that, I will say that we have a really healthy balance sheet. And the numbers that we are working with about this potential transaction would not include injection of capital. We think that We have enough space on our balance sheet, if that is the case, on the number of what we are thinking for this possible asset. So in general terms, we are not thinking on any kind of injection of capital for this specific transaction.

Speaker Change: Thank you in terms of the CCR portfolio. I mean, we're still on the analysis, but even with that, I would say that we have a really healthy

balance sheet, and the numbers that we are,

Working with about this potential transaction would not include injection of capital.

We think that.

Raul Revuelta: In terms of the separation of the two, I mean, it's something that, for instance, have implemented more than four years ago, and even Morales have implemented it. for some time ago also. I mean, so it's just another flexible way for our passengers for acquiring a ticket for flying. So we are not seeing, I would say, any big difference trend on that, because it has been on the market for the last years. So we really don't see any kind of potential change on the trend of traffic, because this possible change on Bonaire is going to save the...

Speaker Change: We have enough space on our balance sheet. If that is the case on August on the, the number that we are thinking for for, for this possible asset. So in in general terms, we we are not thinking on any kind of injection of capital for this specific transaction in terms of the separation of the, of the of the of the tour for. I mean, it's something that for any time we are of goods have implemented more than 4 years ago, and even molarity is having

Guilherme Mendes: That's very clear.

For for, for, uh, sometime, I go also. I mean, so, it's just another flexible way for the our passengers for acquiring a, a, a, a, a ticket for, for flying. So, we are not seeing any, I would say, any, big difference strength on that, because has been on the market for the last years, so we, we, we really don't see any, any, any kind of of, of on, on, on on or potential change on the, on the trail of traffic. Because this, this, this possible change on, on, on the way to say the, the big

Raul Revuelta: Thank you, Raul.

Speaker Change: That's very clear. Thank you. How

Jens Spiess: Next we have Jens Spiess of Morgenstern. Hello. Yes, thank you, Raul and Saul. So basically, two follow ups on answers you already gave. One is on the question that Pablo did on the maximum tariff, and based on our calculations, we get that you could increase tariffs. by around 15 to 20 percent. Does that number make sense to you? Just see if we are in the ballpark.

Jens: Next, we have Jens shiz of Morgan Stanley.

Jens shiz: Hello. Uh yes. Thank you Roland. So, uh, so I basically to follow ups on on answers you already gave.

Jens shiz: 1 is on the question that Pablo did on on the maximum tariffs and based on on our calculations, uh,

Jens shiz: We get that, you could increase tariffs.

Jens Spiess: And the second one is on BFR demand. Obviously, the situation remains quite fluid and uncertain, I guess. But so, first of all, we're seeing quite strong capacity growth in the fourth quarter for you. So, almost 10 percent of seed capacity being allocated according to schedules. That's quite strong. So are you seeing the same? And is here like the key variable, maybe the load factors of the airlines? I don't know. What are your thoughts on on like the fourth quarter and and how much capacity is being allocated? to your airports.

Jens shiz: By around 15 to 20%. Um does that make number make sense to you just um see if we are in the ballpark and the second 1 is on bfr demand. Obviously the the situation remains quite fluid and and, and uncertain, I guess. But um, so first of all, we are seeing quite strong

Fantastic growth in the fourth quarter for you. So almost 10% uh of seed capacity being allocated, according to schedules.

Raul Revuelta: Thank you. And Mexico. Thank you, Jens. I mean, in terms of the maximum tariff, I mean, we need to perfectly understand on the coming months how gonna be the I mean, the forecasting of the effects of the dollar and also the inflation on the product price index. For them, the final number for that, how big could be the increase on tariff for the coming year. But I would say that in some of our airports, remember that the maximum tariff is a tariff independent for each one of the airports. So I would say that for some of our airports, we will try to achieve a double-digit increase on passengers' fees.

Speaker Change: That's quite strong. So, um, are you seeing the same? And is here, like the key variable, maybe the load factors of the airlines? Um, I don't know, what are your thoughts on on, like, the, the fourth quarter and and how much capacity is being allocated to your airports. Thank you In Mexico. By the way,

Speaker Change: Thank you again. I mean, in terms of the maximum,

Speaker Change: The dollar and also the, the inflation on the, on the product product Price Index.

Raul Revuelta: From some other of our airports will be just inflation, but it will depend on the airport. But I would say that in general terms, that will be the answer. And in terms of the demand, just when we see OEG and all the asking of a slot for the last quarter, we are seeing a double-digit increase in terms of capacity for airlines in the Mexico airports. But I mean, it's great and we are really optimistic, but the thing is to really follow the low factors of the airlines for those moments. I would say that it will depend.

Speaker Change: For, for any, the final number for that? How good? How big could be? The, the, the, the, the, the the, the increase on, on time, for the coming year? But I would say that in some of our airports, remember that the maximum Target is independent for each 1 of the airports. So, I would say that for some of our airports, we will try to achieve a double digit increase on on passenger seat from some other of our vehicles will be, just just inflation but it will depends on the airport. But I will say that in term in general terms that that that that will be the answer and in terms of the demand. Yes. When you we see all G and all the and all the, I mean, the the asking of a slot for the last quarter, we are seeing a double digit increase in terms of capacity for the, for airlines in the, in the Mexico airports. But

Raul Revuelta: of how the Mexican economy is doing at the end of the day. And also, if there are any kind of changes on policies on migration from the US that in some way could affect the DSR market. But in general terms, I would say that we continue to be. optimistic about the last quarter of the year, seeing the additional capacity of different airlines are bringing to our airport. for ensuring the domestic market, but also related with the issue market and other markets that in the past have not been, I mean, completely . . Exploded in our airport, that could be the additional seats from Canadian markets that we already talked about for Vallarta, for Motivo Bay, and for Guadalajara.

Speaker Change: I mean it's it's it's great that we are really optimistic but the thing is to really follow the low factors of the of the airlines on that. And and and for those for those moments I I would say that it will depend

Speaker Change: Of how the Mexican economy is doing.

At the end of the day. And also if there are any kind of changes on my policies on migration from from the US that in some way could affect the the the, the bfr market. But in general terms, I would say that we continue to be

Speaker Change: optimistic about the the last quarter of the year.

Speaker Change: Seeing the, the, the additional capacity at different levels are bringing to our airports.

For sure the domestic Market but also related with issue market and other markets that in the past has not been. I mean completely

Raul Revuelta: But also other lines that are beginning to develop for the first time as, for instance, the service of COPA from Panama to Los Cabos. That is completely a new market that could be in some way that we want to see in the coming years. But I would say that it's a great news for Los Cabos that have the opportunity that bringing all these young passengers, the younger hubs of Panama and also South America coming to Los Cabos. So we're still optimistic about the last quarter and the next half year, half a year of this year.

Speaker Change: exploded on in our airports, that could be the additional seats from from Canadian markets that we already talked for can for for for

Speaker Change: But also other like that are beginning to develop for the first Finance. For instance, the service of go back from Panama to Los Cabos, that is completely a a new market that that could be in some way that we want to see the coming coming years. But I would say that it's a, a great news for, for, for, for, for Moscow, that have the opportunity that

Jens Spiess: All right, perfect. Yeah, yeah, that's, that's very clear.

Speaker Change: Bringing all these Beyond passengers beyond their hopes of parama and also so South America coming to to to discuss. So we are too optimistic about the, the last choir. And, and the the next half year, half a year of of this year.

Raul Revuelta: And just, if I may one quick follow up on the first question. As of the second quarter, are you at around 85% of the maximum tariff that you're allowed to charge. Does that make sense for you, that number, 85? It depends for sure on all the needs of the airport, but I mean, if we just see it as a general number, we'll be correct. Just remember that on the first six months of the year, January and February, we have zero increase sometimes. So the next six months are going to be a little different. Got it.

Speaker Change: All right, perfect, yeah, yeah. That's that's very clear. And and just if, if I met 1, quick follow up on on the first question, um,

Speaker Change: As of the second quarter, are you at around 85% of of the maximum tariff that that that you're allowed to charge? Does that make sense for you, that number 85?

Speaker Change: depends on the

Speaker Change: For sure. On the, on the, on all the

Raul Revuelta: All right. Perfect. Thank you, Raul.

Speaker Change: General number will be will be correct. Yeah. Now just remember that on the first 6 months of the year January and February, we have zero increase sometimes. So the next, the next 6 months going to be a little a little different

Speaker Change: All right, perfect. Thank you, Road.

Pablo Ricalde: Next, we have Pablo Ricalde of Itaú. Hi, good morning. This question is more maybe for Saul because we have seen a huge increase in depreciation in the past couple of years. So I don't know how this affects your dividend policy or your needs of leverage to fund your CAPEX program. That's my first question.

Speaker Change: next, we have

Pablo Ricalde: Another one is on the Madrid route.

Pablo Ricalde: We have been rumored that Iberia is planning to open a Guadalajara-Madrid route. I don't know if you can confirm that.

Speaker Change: Hi, good morning Gap. This this question is more maybe for for because we have seen a huge increase in depreciation in the past couple of years. So I don't know how this affects your video and policy or your needs of of Leverage to upon your capex program. That's my first question and the other 1 is on the Madrid. Good we have been rumors that it really is planning to open a our hat with good. I don't know if you can complain that.

Saul Villarreal: Hi Pablo. It's correct, the depreciation is increasing due to the capitalization of the assets, but also we have to consider the acquisition of the cargo-bounded facility that is included in the full half of that. That's why the decrease also into the depreciation and amortization. But that could change how you fund your CAPEX program, or we should continue to expect that most of the CAPEX program will be funded with VET. We will continue the training. Okay, perfect.

Speaker Change: That is included in, in the full half of that this year. That's why the, the decrease also into the depreciation and ammo decision.

Speaker Change: But that's a change, how your like fund your capex program or we should continue to expect that most of the capex program will be funded with with that.

We will continue in the same.

Speaker Change: Okay.

Speaker Change: Perfect.

Raul Revuelta: And hi, Pablo. Related of the Navajo-Alajara with Iberia.

Pablo Ricalde: A couple of weeks ago, Iberia announced the beginning of the route of several routes in Latin America and, for the case of Mexico, in Monterrey, related with the operation of a new plane, the 321 Large, that could achieve a Monterrey and some other markets or with a more, I would say, smaller In that way, also, they announced they announced also the potential route for Guadalajara, but for the moment, it has not been, I would say, outrighted or plotted yet. Yeah. Okay. Perfect. Thanks, Raul. Thank you.

Speaker Change: And we let it of the mara a couple of weeks ago, is very announced, the beginning of the root of several roots in Latin America. And for the case of Mexico with in Monteray related with the operation of a new play, the 321 large that could achieve a on the way. And some other markets or with a more I would say smaller demand.

in that way, also, they announced

Speaker Change: Potential increase on on, on potential opening of of a wood from while I have to Madrid.

Today, this has not been concluded at the negotiation or I would say announced by bya, because in some moment, they the same moment that they announced the m to Madrid Road would, they announced also the potential route for 1 and a half. But for the moment is has not been. I would say outrighted or closed. Yeah, okay. Yeah, perfect. Thank you.

Speaker Change: Thank you.

Jorge Vargas: Next we have Jorge Vargas with GBM. Hi, good morning. Thank you for taking my call, my questions. With growing CAPEX, higher concession fees and a larger debt balance, how are you thinking about sustainability of distributions in the medium term? Should we expect a more cautious dividend policy?

Jorge Vargas: Next, we have Jorge Vargas of GBM.

Jorge Vargas: And my second question is, traffic at Montego Bay has continued to soften.

Jorge Vargas: Now that you have renegotiated that concession, are there any initiatives in place to reactivate growth and strengthen its conductivity? Thank you.

Jorge Vargas: Hi, good morning, thank you for taking my call, my questions. Um, with growing capex higher, concession fees and a larger debt balance. How are you thinking about sustainability of distributions in the medium term? Um, should we expect a more cautious even policy? And my second question is, um, traffic at Montego Bay has continued to soften, uh, now that you have renegotiated that concession are there any initiatives in place, um, to reactivate growth and strengthen its conductivity? Thank you.

Saul Villarreal: Sorry, Jorge. This is Saul. Well, the effect of the concession fee affects directly to our EBITDA, and considering the cap is that we are making, altering the base of our tariff increase, tariff increase related to our revenue increase. So, at the end, we believe that our distributions will continue in the same. The effect, obviously, of the concession fee over the EBITDA. is affecting directly, that is, offsetted by the acquisition of the new cargo facility. So at the end, I would say that in general terms, the data margin will be around 66, 67 percent. So in some way, we are having a little effect on that data level.

Speaker Change: This is all well, the effect of the concession fee affects directly to to our visa and considering the the cap is that we are making all 3 the days of our credit increase credit increase related to our our Revenue increase. So at the end, we believe that our distributions will continue in in, in the same, the effect. Obviously of the concession fee over over the elite that

Raul Revuelta: In terms of the traffic in MBJ, we are having some effects due to the... Yeah, I mean, talking about, in the last year, we saw, and it was a trend, not only in Montego Bay, but I would say that mainly in all the Caribbean, we saw a decrease in the number of seats, mainly from American Airlines, and what's from, mainly from New York and Miami.

Is affecting directly that is offset by the acquisition of the new cargo facility. So, at the end, I would say that in general terms, to be the margin will be around 66667 7%. So in some, in some way, we are having a legal little effect on on, on on that, that the digital level.

Speaker Change: In terms of the traffic in MJ, we are having some, some effects due to the don't you want to? Yeah. I mean talking about in, in the, in the last year we saw and it's, it was a, a trend not only in Montego Bay, but I would say that mainly in all the Caribbean,

Raul Revuelta: Hmmmm If you remember, just after the COVID emergency. The biggest airlines in the US, the biggest US airlines. just pushed a huge amount of additional things on the issue. a generated a really big increase on traffic in mainly all the carriers. What we saw in the last year is, I would say, a reaccommodation on some of these additional offers that they push into the leisure market.

Speaker Change: We saw a decrease in number of seats, mainly from American Airlines in a lot from mainly from New York, and Miami.

Speaker Change: if you remember,

Speaker Change: Just after the co MTN.

The biggest airlines in the US, the biggest US arrives.

Speaker Change: Just push a huge amount of additional fees so on on, on on issue.

Speaker Change: Generate a, a really big increase on, on, on, on traffic is mainly all all the Caribbean.

Raul Revuelta: But we are seeing and we are optimistic on what we're going to see for the case of 7j in the in the in the coming years uh, first of all The announcement of additional hotel and key rooms in the area is a really important effect coming in the coming years. But also, the Tourist Minister and the Tourist Board of the United Nations. is doing a really important job trying to bring back some of the different and attacking some of the different markets. So in general terms, what we are seeing in the coming years of MEG is after all these decreases of the receipts that we saw in the last year, We think that we just.

Speaker Change: What we saw in the last year is I would say, are we accommodation or not? The on on some of these additional offers that they push into the Leisure Market

Speaker Change: The case of family J in the in the, in the coming years. First of all.

Speaker Change: Different announcement of additional Hotel line 2 rooms in the in the in the area. It's a, it's a really important. Yeah, a really important effect coming on on on, on coming here.

Speaker Change: But also the the tourist Minister and the the 2 important organizations are really important job trying to bring back some of the of the different and attacking some of the different markets. So in general, what we are seeing on the coming years of MJ is after all this recursive that we saw in the last the last year

Speaker Change: we think that we just

Raul Revuelta: The base and the coming months and years will be of increasing number of seats and on the long term we're going to see also an important increase of number of rooms that will bring additional tourists to the island. So we are really optimistic on the long term for Jamaica.

Speaker Change: Touch the, the, the base and and and and and the the coming months and years will be where we of increasing number of of seats. And on the long term, we going to see. Also an important increase of number of rooms that will bring additional tourists to the to the island. So we are really optimistic on on, on, on the long term for for Jamaica.

Raul Revuelta: Very cute. Thank you.

Speaker Change: Thank you. Thank you.

Operator: As a reminder, everyone, you may ask questions either through the webcast or the phone line. To ask a question on the phone, press star 1.

Speaker Change: As a reminder everyone, you may ask questions either through the webcast or the phone lines.

Speaker Change: To ask a question on the phone press star 1.

Abraham Fuentes: And our next question comes from Abraham Fuentes of Banco Santana. Hello, good morning. Two questions from inside.

Speaker Change: In our next question. Comes from Iran. Fuentes of Vancouver.

Abraham Fuentes: The first one, could you give us more color about the number and not to cover any per passenger going forward? How much space is there to continue growing or when we can expect normalization?

Raul Revuelta: And the second question is about the U.S. Department of Transportation cleaning that Mexico has engaged in anti-competitive behavior. Is there any opportunity or are you seeing users act? I mean, from the commercial revenue per passenger for sure that we have a big jump due to the acquisition of JWTC, the cargo facility. But also we have experienced an important increase on cargo per passenger just as we open new infrastructure, for instance, the expansion of Terminal 1 in Guadalajara, the expansion of Tijuana, the expansion of Los Cabos. So the next, I would say, jump that we're going to see on passengers per traffic, it will depend on the opening of new additional areas that is related with the new master plan.

Speaker Change: Hello, good morning. Uh, 2 question from the first 1. Could you give us more caller about the number to cover any process you're going forward? How much a space is there to continue growing? Or when we can expect normalization? And the second question is about the US Department of Transportation cleaning. That Mexico has engaged in anti-competitive behavior. Is there any opportunity or risk? Are you seeing users that?

For sure, we have a big jump due to the acquisition of of jwtc the electrical facility. But also we have experienced an important increase on your your just as we open new infrastructure. For instance, the expansion of external 1, expansion of Tijuana is the expansion of Los Cabos. So the next I would say, jump that we want to see, um, passengers per traffic, it will be depends on the opening of new additional areas, but

Raul Revuelta: Let me put it this way. For instance, in the new master plan, we will have a complete brand new terminal 2 for Guadalajara that will be operating for the end of 28. At that moment, we're going to see an important jump. revenue proposal, commercial revenue proposal in Puerto Vallarta Airport, for example, we are expecting on the first quarter of the 2027, the opening of the new terminal building of Puerto Vallarta Airport, that also will bring a great potential for an increase on commercial revenues proposal. So, in that way, the new additional space that we could generate from the new terminals and expansion that will come on this new master plan will be completely aligned with the next jumps on the revenue, commercial revenue proposal.

Speaker Change: Related with the new Master Plan, let me put in this way. For instance, in the new master plan, we will have a complete brand new Terminal 2 for Walla Hara. That will be operating for for for the, I mean, for the end of 28 at that moment, we're going to see a important jump on on on Revenue per pass. Commercial Revenue, per passenger for for instance, or if, for example, we are expecting on the first quarter of the 2027, the opening of the new terminal, building of Portugal. That also will bring a, a great potential for an increase on on, on, on commercial, commercial revenues per passenger. So, in that way, uh, the new additional space that we could generate from the new terminals and expansion that will come on, on, on, on, on these new master plan will be completely aligned with the next jumps.

Raul Revuelta: In terms of the Mexico-U.S. new aviation policies, I mean... Hard to see. on this, between all the different movements that is happening on the bilateral relationship with the U.S. My point of view is not only what could happen on the aviation policy. It's a more wider discussion about the bilateral. relationship between both countries. But in terms of what was announced, It will depend how much months will still place the need of an additional authorization for new slots in the U.S. for the Mexican carriers. Because for the moment, I mean, we just... Here we have a big part of the fleet of some of the Mexican airlines rounded for the problem of the PMW engine.

Speaker Change: on the, on the, on the revenue in the commercial Revenue per passenger

Speaker Change: If there's a the Mexico, us new Aviation policies. I mean

Speaker Change: Hard to see.

On on this between all the different movements that is happening on the bilateral relationship. With, with the US

Speaker Change: My point of view is not only what could happen on the aviation policy. It's a more wider discussion about the bilateral

Speaker Change: relationship between both countries, but in terms of what it was announced,

Speaker Change: It will depend how, how many time, how, how much you months will still play the need of an additional authorization for new slots in the US for the Mexican carriers.

because for the moment, I mean we just

Speaker Change: Hear it?

Speaker Change: we have a

Abraham Fuentes: On the really short term. I do not foresee any kind of impact for this change on the aviation policy from the U.S. to Mexico. But in the long term, it will depend how if this authorization continues and how hard or difficult it will be for the Mexican carriers to open a new route in the US. And for the moment, I really, I would be more concerned about a more. brought bilateral relationship between countries, rather than just the US aviation policy. Okay, perfect. Very clear. Thanks.

for the problem, the PMW engine, so

Speaker Change: On the really short term.

Speaker Change: I know for see any kind of impact for this change can be Aviation policy uh, from from for us to Mexico.

Speaker Change: But in the long term, it will depends how if, if this authorization continues and how hard or, or, or or difficult will be for the for the for the Mexican customers to opening a new new in the US. So, and for the moment I really,

I will see more concerned about a more.

Speaker Change: Broad bilateral relation to the relationship between countries rather than just the US Aviation policy.

Speaker Change: Okay, perfect way for you, thanks.

Raul Revuelta: Next we have Alan Macias, the Bank of America. I mean, yeah, I mean, we are seeing a possible impact on around 38 percent. It's more related to the BFR market because the leisure market is, I mean, completely operated for U.S. and Canadian carriers. So it will be not impact on the leisure market, but for sure it could be an impact on BFR. But also it is important to remember that, for instance, a couple of years ago, when the U.S. government increased the category for Mexico, for the Mexican authority in aviation, we saw a really important increase in traffic in Tijuana.

Alan Masias: Next, we have Alan, masias, the Bank of America.

Alan Masias: I uh good morning and and thank you for the call just just 2 questions or clarifications. Uh I I guess the exposure of Gap. Um airports to the US of Mexican Airlines, just thinking about the possible restrictions from the US Department of Transportation. Is that 38% is that the exposure?

And uh also um your guidance I I guess you, you are maintaining your guidance, right? Thank you.

Raul Revuelta: for the passengers, the VFR passengers, walking through the CVX. Because at the end of the day, all the southern... California area, catchment area, that is covered by the Tijuana airport through the CVX, could be connected even without the authorization of any additional services to the U.S. for a Mexican carrier. They could... put their fleets or their capacity for a 10th of the Southern California market through the Tijuana Airport. And that happened a couple of years ago when the decrease on the category. If you remember that moment, for instance, the Tijuana Airport used to be even bigger than Monterrey Airport for a couple of years and was related for that effect.

Speaker Change: Yeah, I mean we are seeing a possible impact on on around 38% that is more related to bfr Market because the Leisure Market is, I mean, completely operated for for us and Canadian carriers. So it will be an impact on the on the on the Leisure Market but for sure it could be an impact could be a part but also it is important to remember that. For instance, a couple of years ago, when the US government, increase the category for for Mexico, for the Mexican Authority. Aviation we saw a really important increase on traffic in Tijuana

Speaker Change: for the past 10 years, the VFR passengers walking through the through the CDX because at the end of the day, all the all the southern

Speaker Change: California area, catchment area, that is covered by the, by the airport to the CDX.

Could be connected even without that the authorization of any additional services to the US for a Mexico calendar. They could

Raul Revuelta: So in the same way, again, our portfolio Some mother could help us for any potential slogan of additional routes or services from Mexican carriers in the US.

Speaker Change: Put their, their, their fleets or their capacity for a parent, all the Southern California Market through the Tijuana airport and that happened a couple of years ago. When the, when the the the decrease on the category. If you remember in that moment for instance, the 1 airport used to be even bigger than Montreal so a couple of years and once related for for that that effect. So in some way again, our portfolio in some

some other could help us for, for, for any, any potential slow, slow down of of additional routes or services from Mexican carriers in the in the US

Raul Revuelta: We have no further questions at this time, Raul and Saul back over to you for any additional or closing Thank you once again for joining us today for our Second Choir Results Conference. Please contact our investor relations team with any additional questions you may have. Have a great day and thank you for your attention. That concludes our meeting today. You may now disconnect. The host has ended this call.

Speaker Change: We have no further questions at this time back over to you for any additional or closing comments.

Speaker Change: Thank you. Once again for joining us today for our second choir results conference.

Please come please contact our winter investor relations team with any additional questions. You may have have a great day and thank you for your attention.

that concludes our meeting today, you may now disconnect

Operator: Goodbye.

Speaker Change: The host has ended this call goodbye.