Grupo Aeroméxico, S.A.B. de C.V. (AERO) Q2 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to Aeromexico's Second Quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. There will be a question and answer session at the end with instructions given at that time. For the webcast participants, you may submit questions at any time during the call using the Ask a Question section on the webcast. As a reminder, today's conference call is being recorded. Now I would like to turn the call over to Ms. Lucero Medina, Head of Investor Relations.

Good morning, everyone. Joining me today to discuss our results are Andrés Conesa, Chief Executive Officer and Ricardo Sanchez Baker, our Chief Financial Officer. Before we get started, I would like to take this opportunity to remind you that during the course of this call, we will present results that are based on our unaudited consolidated financials. Accordingly, the financial results discussed today are based on information available to us as of the date of this call and are not a comprehensive final statement of our financial results for any period presented. We may make forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act regarding future events and our company's future performance. We caution you that several important factors could cause actual results to differ materially from plans and expectations expressed in this call, including the risk factors disclosed in our SEC filings. During the call, we will present certain non-IFRS financial measures. We have included a reconciliation and explanation of adjustments and other considerations of our non-IFRS measures to the most comparable measures in earnings release. Both our call and the earnings release are available on our website. Now it is my great pleasure to turn the call over to Andrés Conesa. Andrés Conesa Labastida: Thank you, Lucero, and good morning, everyone. We appreciate you joining us today to discuss our second quarter 20 results. The second quarter was characterized by high and volatile jet fuel prices and uncertainty regarding the impact of the World Cup on traffic. Particularly in the corporate domestic market. I want to congratulate all the Aeromexico team for their efforts and commitment that resulted in achieving financial results for the 2Q generally in line with the guidance we provided last April. Revenue performance was strong with trucks growing 10.5% year on year, during the quarter, a period that also saw the 2 best sales weeks in our company's history. Kept discipline in non fuel costs, mitigating the impact that a stronger exchange rate had on peso denominated spending. Against this backdrop, the second quarter unfolded largely as we anticipated. Demand remained healthy in April and May, supported by solid market fundamentals and strong commercial execution across our network. In June, demand moderated in the domestic market, as travel patterns were temporarily affected by World Cup related shifts. Despite this temporary change in momentum, our disciplined commercial and operational execution enabled us to deliver record revenues in both June and the second quarter. While maintaining profitability within the guidance we shared 3 months ago. Our ability to respond quickly to changing market conditions continues to be 1 of our key competitive advantages. We adjusted our network in anticipation of lower corporate traffic in June around the dates where Mexico's national team played. A strategy that proved successful and allowed us to avoid some unprofitable flying. Capacity increased 2% year over year during the second quarter. In line with our guidance. Most adjustments were concentrated in the domestic market, where we continue to support growth across our international network. During the quarter, we launched 2 new long haul routes, Mexico City to Barcelona and Monterrey to Paris. Which are off to a strong start. We also operated dozens of charter flights connecting Mexico and the United States to transport several national soccer teams during the World Cup. Our premium customer base remains a key differentiator of our commercial strategy. During the second quarter, premium revenue mix reached 43%. Up 1 percentage point year over year and 17 percentage points compared to 2019. Marking the highest level in Aeromexico's history. This performance reflects the continuous strength of our premium value proposition supported by continuing investments to enhance our customer experience and build deeper relationships with our clients. It is important to highlight that this performance was achieved in a high yield environment. Despite fair increases driven by higher fuel costs, our customers did not trade down within the first class structure. Underscoring the resilience of demand for our premium offering. As of the end of June, we led all global food service carriers in on time performance according to Cirium, positioning us in a good spot to achieve the recognition of world's best on time airline for the third consecutive year. A feat that no other airline has attained. We are also very proud of the opening of our new best in class lounges and checking facilities in Mexico City. We want to recognize AICM authorities for the investments they have made significantly improve our Comerford facilities. Also in this quarter, we proudly launched our new Aeromexico Inbursa co-branded credit card program, providing customers with enhanced benefits and further strengthening our loyalty ecosystem. Aeromexico Rewards also continues to gain traction as an increasingly important driver of customer engagement and revenue quality. During the second quarter, a record 39% of our passengers participated in the program. This is up 7 percentage points year over year. These initiatives, together with the quality and reliability of our operation, continue to drive higher customer satisfaction. Our NPS reached record heights during the second quarter, reinforcing the strong preference customers continue to show for our brand. Ricardo will provide a more detailed review of our financial results shortly. But before that, I would like to highlight a few key points that underscore the strength and resilience of our performance this quarter. EBIT margins stood at 5% despite fuel cost being approximately $30 million higher than the already high forecast. Cut at the beginning of the second quarter. Adjusted for this additional impact, EBIT margins would have been at the top of the guidance range. We ended the second quarter with the same liquidity position we started the quarter, highlighting our ability to navigate through turbulent periods without burning cash or contracting debt. This achievement shows the resilience and the strength of our business model. Looking ahead, we are establishing new guidance for the remainder of the year. We expect higher EBITDAR and EBIT for both the third and the fourth quarters compared to the same period in 2025. Sorry, full year 2026. EBIT margin is projected to be in the low double digit range, a remarkable outcome considering the challenging environment we have faced this year. Capacity is expected to recover and reach high single digit year over year growth in the April. Supported by additional wide-body flying given the recent delivery of 2.787 aircraft along with 1 additional aircraft expected later this year. As well as increased narrow body flying supported by the additional slots that will become available in Mexico City during the next winter IATA season. This expanded wide body fleet will allow us to further strengthen our European network and increase service to Seoul, from 5 to 7 weekly frequencies reflecting sustained demand and reinforcing our local growth strategy. The first half of the year has once again demonstrated our ability to adapt quickly without compromising our long term strategy. Healthy demand trends, disciplined commercial execution, and a more favorable fuel environment give us confidence that the second half of 26 will deliver solid financial performance. We remain committed to managing capacity with discipline, investing in customer experience, and generating premium revenues. These principles have consistently differentiated Aeromexico and continue to position us to create sustainable value for our customers, our employees, and our shareholders. With that, I will turn it over to Ricardo to discuss our financial performance in more detail. Ricardo Javier Sánchez Baker: Thank you, Andrés, and good morning, everyone. I would like to echo Andrés' comments and congratulate the entire team on their outstanding performance in a very challenging environment. Delivering operational profitability despite fixed fuel price pressure is a remarkable achievement and a testament to the team's disciplined execution across service, operational, and financial KPIs. Let me now turn to our financial performance and highlight the key factors that shaped our second quarter results. As well as how we are positioning the business to deliver a stronger second half of the year. Total ASMs increased 1.9% year over year, in line with our guidance, as we proactively adjusted capacity throughout the second quarter to align with market conditions and protect profitability. Total revenue reached approximately $1.5 billion in the second quarter, representing 30% year over year growth. In line with our guidance. This performance was driven by strong demand across our network, continued growth in our premium segment, and solid pricing throughout the quarter. Although we experienced a temporary moderation in domestic demand during June, due to World Cup-related travel patterns, we still delivered record second quarter revenue. Total revenue per available seat mile, or TRASM, increased 10.5% year over year. Primarily driven by strong international passenger revenue and the appreciation of the Mexican peso. Passenger revenue per available seat mile, or PRASM, also improved 10% year over year. Total operating costs increased by 30% primarily driven by elevated and volatile fuel prices. During the second quarter, we faced a fuel price headwind of approximately $220 million compared with 2025. This translated into roughly $30 million of incremental cost pressure relative to the assumptions underlying the guidance we provided in April. As we discussed on our April earnings call, our estimation was to recover at least 50% of this incremental fuel cost to pricing and revenue management initiatives. We exceeded that target at achieving a fuel cost recapture rate of 70%. Excluding fuel, operating expenses increased 13%, reflecting the continued strength of the Mexican peso, inflationary pressure on wages and salaries, and higher depreciation associated with fleet growth in 2025. Adjusted EBITDA totaled $260 million in the second quarter. Representing a margin of 18%. While operating income reached $68 million resulting in an operating margin of 5%. Both metrics were within the guidance range we provided in April. As mentioned earlier, average fuel prices during the quarter were approximately 8% above the assumptions underlying our guidance. As fuel prices evolve in line with those assumptions, we estimate that our operating margin would have finished at the upper end of our guided range. Turning to the balance sheet. We ended the second quarter with strong liquidity position. Including more than 1 billion in cash, total liquidity above EUR 1.2 billion including our fully undrawn $100 million revolving credit facility. This robust liquidity position reflects our ability to navigate a challenging environment while maintaining a strong cash flow generation and avoiding incremental debt. We generated approximately $362 million in operating cash flow. Reduced financial debt by approximately $17 million and closed the second quarter with adjusted net debt below the balance recorded on the same period of last year. These results reflect our disciplined approach to capital allocation, while preserving the financial flexibility to continue investing in the business and further strengthening our balance sheet. Earnings for the second half of the year are entering the peak summer travel season from a position of strength. Demand trends remain healthy, supported by solid booking activity across both our domestic and international networks. In addition, the fuel price curve, although volatile, has moderated from the elevated levels experienced during April and May providing a more favorable cost backdrop. Looking ahead to the third quarter, we expect to deliver another quarter of solid financial performance. with absolute results broadly in line with the strong levels achieved a year ago. Operating margins are expected to be modestly below last year's exceptionally strong levels, as higher fuel costs are largely being offset by higher revenues. Resulting in a higher revenue base and as a result, modestly lower margins. For the third quarter, we expect revenue between $1.59 billion and $1.62 billion. And adjusted EBITDA margin in the mid to high 2020, and an operating margin in the mid teens. Looking further ahead to the fourth quarter, we expect to deliver our planned capacity growth to higher aircraft utilization. Driving greater operating leverage and improved unit costs. Capacity is expected to increase approximately 6.5 to 8% year over year supported by expanded operations at Mexico City International Airport, following the authority's approval to increase hourly operations from 44 to 46 beginning with the next IATA season. For the fourth quarter of 26, we expect total revenue growth of 14.5 to 16.5% and adjusted EBITA margin of 28% to 31%, and an operating margin of 15.5 to 18.5%. Detailed assumptions regarding fuel prices and foreign exchange are included in the guidance section of our earnings release and in our webcast presentation. For the full year, we expect ASM growth of 2% to 3%, total revenue growth of 13 to 14% versus 2025, an adjusted EBITDA margin of 20.5% to 26.5%, and an operating margin of 11-13%. Our guidance reflects current market conditions and the assumptions we believe are most reasonable today. While uncertainty remains, we are confident in our ability to execute, adapt to changing market conditions, and continue creating long term value for our shareholders. With that, we will now open the call for questions.

Thank you very much. Thank you. Question, please press 11. If your question has been answered and you would like to remove yourself in the queue, please press 11 again. Our first question comes from Duane Pfennigwerth with Evercore ISI. Your line is open.

Hi. Good morning. I wonder if you could expand on the World Cup impact that you saw over the balance of the quarter. So maybe what corporate revenue growth looked like in April and May versus the level you saw in June, And then can you speak to what level you are seeing here in July and into 3Q? Any metrics you can put around June that would really isolate it to the World Cup impact? Andrés Conesa Labastida: Hi, Duane. Good morning. The impact of the World Cup on domestic revenue, we estimated for June. To be around $24 million. So that is the revenue, lost for the month. Despite this, as we mentioned in our initial remarks, we have record revenues in June. We have our best June and our best second quarter in terms of revenues in history. This number does not include, you know, we have, positive effects on charters, for example, as I mentioned, that we transported several teams during the World Cup. So overall, I would say that it was slightly negative, the impact of the World Cup on our well, on our revenues in June. And we have seen a very fast change in patterns after last week. So we see a very strong recovery of corporate traffic and leisure traffic in the domestic market. Already for July and very solid numbers for August and September. So we believe it was strictly temporary effect and we are, you know, back to where we were in April and May. We can follow-up this call and give you the details for the daily corporate traffic growth for April and May versus June, but this is the story in general terms.

Okay. that is helpful. And then just again, talking about the third quarter or maybe the second half, where are you seeing the bigger relative improvement? Are you seeing a bigger turn in the domestic market Or are you seeing a bigger turn or improvement in international? Thanks for taking the questions. Andrés Conesa Labastida: You know, international, you know, pricing reacted very fast, you know, once the conflict in The Middle East started. So we were able to start to reflect higher jet fuel prices on yields as every other, you know, airline across the world. You know, right away in March, April. Domestic, was slower. So April and May, did not reflect, you know, the impact of higher jet fuel. In June, we saw better, levels of pricing. And going forward, we see international demand very, very strong with no change. And, again, that was not affected during the World Cup. And, basically, domestic traffic is expected to recover both, you know, once the World Cup is behind us and also because yields were not consistent with the level of jet fuel prices during the start of the 2Q. So this is, again, the story for a going forward, again, as we stressed in the in the initial remarks, we are projecting very strong revenue numbers for the third and fourth quarters. The reason behind it is as, you know, when the conflict started, we had most of our Q2 seats sold. And we had availability for the second half, so we have been able to fill the second half, you know, seats available. with yields that are consistent with, again, the jet fuel prices that we saw after the conflict. So we are in very good shape for the second half of course, we have, you know, significant numbers of seats to sell. We are not fully booked for the second half. But, you know, the demand environment has continued to hold up. Despite the recent decrease in the price of oil. Again, that was last week. Today, it is, as you know, it is it is up again this week. So we are monitoring that very closely, but we feel, you know, very confident that we will be able to achieve these targets that we put forward in the guidance. Yeah. Ricardo Javier Sánchez Baker: Hi, Duane. This is Ricardo. Just to complement on this, another element that we think is going to be very helpful for our second half results is the ask growth that we are planning for the fourth quarter. Taking advantage of the assets that we already have. And using the operating leverage. So we expect to produce additional revenue with the same assets that we have and this will improve also profitability. So within this, it is also an important advantage for the last part of the year, and that advantage will also help in 2027.

Thank you. Our next question comes from Mike Linenberg with Deutsche Bank. Your line is open.

Ricardo, I heard you talk about the increase in slots at Mexico City for the IATA winter season. Can you just clarify, I think you said the number of operations per hour are going to go from is it 44 to 46 Or is it 56? Is it I am just trying to get a sense of the increase. Ricardo Javier Sánchez Baker: Yes. Correct, Mike. Hi. How are you? Yes. From 44 to 46, we are starting the next IATA season. Correct. Andrés Conesa Labastida: That means around 10 pair of slots additional to what we have today. it is, you know, our share of this increase from 44 to 46, which as Ricardo mentioned, we plan to increase ASKs you know, high single digits for the 4th quarter. We will use these slots for the additional wide-body we mentioned plus to recover some capacity. We reduce in the domestic market. that is the plan for these slots.

Okay. So wait. So your slots are going from 44 to 46 So you are going to get 2 per hour. what is the airport what is the airport going? Or is that the airport? Yeah. Andrés Conesa Labastida: The capacity in the airport is going to increase from 44 to 46 per hour. Oh. Our share of that during the day is 10 pairs of slots. So as we keep our proportional slots, this will mean 10 additional pairs of slots for the winter season. Okay, that is helpful.

And then just another question. This is on just the accounting. I know in your other revenue it looked like that it looked like there was a bit of a bump up there. Is that was that a 1-time or you know, an out of period type gain? Or what drove that? Or is that the new run rate for other revenue going forward? I know you talked about you know, the new credit card, and the rollout with Visa. So maybe that is showing up in that number. Thanks for taking my question. Ricardo Javier Sánchez Baker: Yeah. Hi, Mike. Well, yes, this line item reflects, I think, the success that we are having in diversifying our revenue. So here, we have revenue associated to Aeromexico Rewards. The fact that we have been growing penetration, translates into higher revenue here. We also have revenue associated to VIP lounges, We reopened our VIP lounges during the second quarter of the year. We have been remodeling them for last year, so we did not have those revenues last year. We also have in that line the revenue associated to the charter operations that we performed during the World Cup, no, where we transported several national teams within Mexico and also from Mexico to The US and Canada. So that is reflected there. And the line item also captures the all the initiatives that are commercial team is doing on the retailing -- airline retailing initiatives, including car rental, insurance, and vacation packages. So it is a combination of all these factors that is factored into the deck. Including also the launch of the new credit card. No.

Okay. Great. Okay. Thank you. Thanks.

Thank you. Our next question comes from Filipe Ferreira Nielsen with Citi.

Hey. Hello, everyone. Thanks for taking my question. So just 2 points here. I would like to understand a little bit more about the impact, potential impact from, fleet utilization in your, ex fuel cost. If you could maybe give us a sense about how is this evolving or improving as you increase capacity into the second half? And how should how is the level of impact in your guided margins for the period? And my second point, just wanted to, remind if you could remind us how is the fuel recapture? You mentioned higher than expected recapture in second quarter. Just if you could maybe remind us the number in second quarter and explain a little bit about the recapture in third quarter and fourth quarter? Thank you. Andrés Conesa Labastida: Okay. Let me take the first part. Filipe, good morning. Can you help us your question again, the first question you have? So for the second 1, on fuel recaptured. We, you know, we guided the market back in April that we were projecting to recapture 50%. Of the pressure, we ended up with 75. So 75%. For the second half, you know, in the implicit guidance that we gave, we are projecting to recover more than the impact that we had, and that was the plan. Because it was, again, because we had already seats sold for the Q2. Was impossible to recover everything in the Q2. So we expect to offset some of this 25% of the 25% that we did not recover in the second Q That was the impact versus last year. On the second half with the guidance that we gave on revenue. So it will be, you know, more than a 100% Still, you know, we in the projections that we show, EBITDA and EBIT, you know, they are in very good you know, they stand in, you know, growth year over year. Of 9% and 11% third and fourth quarters. But still, if you look at the total 2026 versus 2025, we will be slightly below 2025. Again, very, very good numbers. But, again, that reflects, you know, the huge impact that fuel had on the on the industry. Can you please help us or, you know, repeat the first question.

Yes. So I just wanted to understand, On your ex fuel costs implied in your guidance, how does fleet like, the low lower fleet utilization plays out in the whole equation. So you are expanding capacity into the fourth quarter, You are you have, like, maybe lower utilization now. So how this should evolve and impact your ex fuel costs, implied in your guidance? Ricardo Javier Sánchez Baker: Yes. Thank you for the pieces. This is Ricardo. Yes. As we mentioned, we have a this operating leverage advantages or opportunities. Our P&L already will take the ownership cost of this aircraft. But we are not really flying as intensively as we could. So as we fly them more, a ownership costs are the same, but we are producing additional revenue. Also, we are making additional use of our crews. We are not really necessarily hiring for the 4Q. We would be hiring for growth in 2027, but not necessarily for 4Q, so we have also advantages on that. No. So in terms of the fixed cost structure, as we fly more this aircraft and we produce revenue associated with them, we have the high margin growth opportunities that we see for the fourth quarter and for 2027. No. Andrés Conesa Labastida: And to complement what Ricardo just mentioned, this operational leverage is very significant. It will not only allow us to, again, improve margins in Q4 2027 and even beyond for 2028. So we stand in a in a very solid position with the assets needed to fund growth for the next several quarters. Great. Thank you.

Thank you. Our next question comes from Giulio Orsi with JPMorgan. Your line is open.

So we have 2 questions on our side. The first 1, can you comment a bit on the competitive landscape for both domestic and international markets? Andrés Conesa Labastida: Hi, Giulio. As a competitive domestic market, I mean, we have seen some rationalization of capacity. In the second Q. As I mentioned before, you know, yields in the domestic market did not reflect the fuel environment for the start of second Q. Again, in June, we started to see some, you know, better yield support in the domestic market. And going forward, you know, the competitive landscape, again, will depend on the transaction that was you know, that has that has been, you know, asked to, you know, to be approved by the competitive authorities. We do not know where that stands. But, again, you know, our job is to continue strengthening our product you deliver the best, the best competitive proposition for our clients, and we are in very good shape on that front. Got it. Thank you. And can you comment a bit on the let's say, demand elasticity across the segments? Just trying to understand if you believe that there is still room for further price increases if we continue to see volatility on the jet fuel curve in the coming months? Thank you. Yeah. Can you please can you please repeat? Sorry. We did not we did not we lost you. A little bit. Yeah. Of course. Can you comment a bit on how you are seeing demand elasticity across the segments? We are just trying to understand if you believe that there is still room for further price increases if we continue to see the jet fuel curve subject to volatility as it has been over as it has been the case over the past couple of days. Thank you. Well, as I have mentioned before, the domestic market, we are seeing very good support for the second half of this year. International demand continues to be strong. We are seeing, you know, very solid bookings to Europe. You know, we have we have increased our capacity to Europe for the summer. As I mentioned also, you know, with the additional 787s that we will receive for 8 Sevens, we are again providing Daily Service To Seoul. And, also, we are keeping our Monterrey-Paris flight all year long. Those are important developments of our Barcelona-Mexico flight it is doing very well. The U.S. flying has been also, you know, very, very solid. Same from South America. So very solid demand across the board. And for Mexico, again, as I mentioned, some softness was felt in the leisure and corporate market for June, but we are seeing, you know, very positive developments for the rest of the summer, And also for the fourth quarter. We, you know, we showed that, you know, we are flexible, that we proactively engage. So our plan is to, you know, expand our capacity, particularly in the fourth quarter. But if fuel prices continue to be volatile and we do not see that demand is there, we will not hesitate and reduce capacity. The only thing being rest assured that it is fully protected is our slots in Mexico City. We will cover all of our slots We were able to reduce capacity in the domestic market because we had a waiver because of the higher jet fuel prices during Q2. That waiver ends for winter IATA. If the waiver is not there, we will fully cover those slots. If oil prices remain high and the waiver is still there, we will obviously adjust and reduce capacity. Got it. Thank you.

Thank you. Our next question comes from Jens Spice with Morgan Stanley. Your line is open.

Hi. Hello. Yeah. Thanks for taking the questions. I have 1 on the co-branding partner change. I know that all the loyalty members will keep their loyalty members But I was just wondering if it will take some time for those customers to switch to the new, like, credit card. So like, just to understand, what are the implications for your financials going forward in order to correctly model this? And secondly, I want to double click on the prior question on the competitive environment domestically. I mean, there is, like, a very divergent capacity adjustments from your 2 domestic competitors. 1 is increasing capacity in the third quarter. The other 1 is reducing it. So would you say there is still, you are seeing like, discipline in the market? Yeah. Like, what is your view there? Thank you. Andrés Conesa Labastida: Hi, Jens. Good morning. On the credit card, again, as you know, we successfully launched a new credit card with Inbursa, it is going, you know, according to plan. We are seeing very you know, very positive trends. In you know, we obviously fully prepared for the bridge as we move from the other credit card that we have to Inbursa. So our financials are covered in that sense, and the guidance that we provided. Again, reflect this transition between the 2 cards. 1 very encouraging sign that we are seeing with the Inbursa card is that half of the cardholders that have received the card today previously did not have a co branded credit card. So that is new 1. that is the idea that we are looking for. it is not only you know, to obviously keep the customers that we have before, but also to bring new customers on board. And, you know, we are seeing that And on top of that, let me remind you that we are also working on the new contract with American Express that is due in the 4Q of this year. Then on the on the competitive environment, I think, you know, my view is that, you know, these differences in capacity between the 2 ULCCs have to do between, you know, the different stages where they have the impact of the engine problems in their planes. 1 of them had them before, so they reduced capacity. The other 1 probably received the mails later, and then that is why it is reducing capacity later. And on top of that, obviously, you have you know, the impact of jet fuel, which you know, calls again to rationalize capacity independent of the engine issue. But, obviously, you know, we cannot answer you know, that for them. But, again, we know we are, you know, fully ready, you know, to compete regardless of the outcome in a competitive environment in Mexico. Perfect. Thank you.

Yeah. Seems that the higher jet fuel all else equal, seems to be, like, a more benign environment for you guys than for your competitors. But as oil comes down, will you because according to your guidance, you will be very close to reaching, like, prewar profit profitability in the fourth quarter. Like going into 2027, if and, hopefully, jet fuel normalizes further, will you be, like, keeping prices at an elevated level to capture even higher margins? Like, because we are hearing that from The US carriers. Right? Just understanding your strategy there. And also, if you could give a bit context on the ASA negotiation, how is this going, and if you expect to reach a deal there soon. Thank you. Andrés Conesa Labastida: Yes. On the on the on the first part, we are seeing you know, very, again, you know, solid demand, consistent with the level of yields today. Are again reflect, you know, higher, you know, the jet fuel prices that we saw after know, the conflict. So, you know, we are, you know, very, very positive, and confident that we will be able not to reach the guidance that we have with information that we have today. If oil prices go down, obviously, that will put pressure, well, across the industry. To bring prices down. You know, it is it is too soon to say what will happen in 2027. But, you know, we have, you know, 3 world record profitability levels you know, with lower prices back then and, obviously, lower yields than what we have today. So, you know, we are ready to react, and we have you know, these other you know, drivers and, you know, tail tailwinds for growth, in margins, particularly the operational leverage. That I mentioned that will be there fully for 2027. So, again, too soon to say. You know, probably you know, as the year moves along, we will provide the guidance you know, for the for the for the, you know, rest of the year and for 2027. And then on the on the negotiations with the flight attendants, You know, they have they have approved in the they have not they have it works in Mexico. They have a like, an assembly No. It was approved. Then, you know, you need every individual to vote in favor of any agreement. And update the deadline for that is the last day of July, July 30. So we are working constructively with the union with the union team, and, you know, we are confident that we will have a firm agreement before the end of this month. Oh, perfect. Okay. Appreciate the additional color. Thank you, guys.

Thank you. that is all the phone questions that we have for now. Ricardo Javier Sánchez Baker: Hi. We have a couple of questions from the webcast. 1 is related to costs. And if we can explain some of the cost and what is driving costs besides fuel, but as we mentioned, costs are reflecting the as the main driver: the exchange rate appreciation, the strong peso. So this is driving several of the cost items. The peso appreciated 11% pesos last year. There are some line items that have other particularities, For example, maintenance costs This year in maintenance, we are having a higher maintenance cost versus last year. Part of it reflecting the additional fleet that we received last year. We received the cost 25 aircraft. And very important element impacting maintenance cost this year is related to the power by our every net of our component maintenance program. So we have 3 contracts, you know, 1 for our Embraer fleet, 1 for our 7 fleet, and 1 for the 7 fleet. And the 3 of them came up for renewal you know, this year. So this year, we have, like, an adjustment, you know, coming from the renewal. And going forward for the next 5 to 7 years, the power by our agreements will move in line with certain cost indexes. So we have this particular renewal impact on our maintenance effects. This year. And I think the that is the main variation on the cost guidance. We have also other question related to cash flow and CapEx. No. Cash flow generation this year has been very strong. In fact, net cash flow from operating activities in the first 6 months of the year has been even higher than in 2025. Despite having around 250 million of impact, no provisional fuel cost expenses in the first 6 months of the year. Going forward, for the rest of the year, we continue to expect a strong net cash flow from operating activities. So having net cash flow below $1 billion between 800 million and 1 billion And with that, and our CapEx program, what we think is that we will have a free cash flow of around close to 100 million this year. Now, going into 2027,, you know, if the fuel curve prices are materialized and also considering the operating leverage opportunities that we have, but we would anticipate that net cash flow from operating can grow materially next year, no, more than 30% if these things materialize, which will translate directly into additional free cash flow given that CapEx programs for this year and for next year are practically similar. Around the $450 million range, no, of CapEx. This 450, it is around 300 million of maintenance CapEx and around a 150 million in other projects. Andrés Conesa Labastida: Well, thank you for joining this call. We look forward to being here again after the summer as we provide in our in our next quarterly call. So have a have a great summer season, and see you soon. Thank you for joining the call.

Thank you for your participation. You may now disconnect. Good day.