Good morning everyone. Thank you for standing by. Welcome to Volaris' Fourth Quarter and Full-Year 2023 Financial Results Conference Call. All lines are in listen-only mode. Following the company's presentations, we will open the call for your questions. Please note that we are recording this event. This event is also being broadcast live via webcast and can be accessed through the Volaris' website. At this point, I would like to turn the call over to Ricardo Martinez, Investor Relations Director. Please go ahead, Ricardo.

Good morning, everyone, and thank you for joining the call. With us is our President and CEO, Enrique Beltranena; our Airline Executive Vice President, Holger Blankenstein; and our Chief Financial Officer, Jaime Pous. They will be discussing the company's fourth quarter and full-year 2023 results. Afterward, we will move on to your questions. Please note that this call is for investors and analysts only. Before we begin, please remind everyone that this call may include forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are subject to several factors that could cause the company results to differ materially from expectations as described in the company's filings with the United States' SEC and Mexico's CNBV. These statements speak only as of the date they are made, and Volaris undertakes no obligation to update or modify any forward-looking statement. As in our earnings release, our numbers are in U.S. dollars, compared to the fourth quarter of 2022, unless otherwise noted. And with that, I will turn the call over to Enrique.

Thank you, Ricardo, and thank you all for joining us today. During 2023, we learned a lot when resizing the operations and turned a very complex situation into a solid financial result for the fourth quarter. On an absolute basis, we recorded our highest ever historical quarterly TRASM. Not only that, we were profitable for the quarter, posting a net income of $112 million. Our quarterly and full-year 2023 performance demonstrated resilience in the face of the challenge encountered throughout the year, such as the extended FAA downgrade of Mexico to CAT 2, aircraft on ground due to Pratt & Whitney preventive accelerated inspections, and slot restrictions at the Mexico City International Airport. These challenges have tested our managerial and operational flexibility, and the mitigation plan outlined in our recent earnings call has proven effective. Now, let's review how we closed the fourth quarter. Operating revenue grew 9.6% year-over-year, with unit revenue rising 10.7% on ASMs that contracted 1.1%. EBIT and EBITDAR margins expanded by 11 points and 6 points, respectively, versus the same period of 2022. I think it is important to emphasize the valuable lessons we learned during the fourth quarter's rapid changes. We took advantage of strong demand, while adjusting our network size, placing focus on prioritizing passenger service, which led to a positive outlook. We improved our proficiency in implementing effective cost control measures. We acknowledged the crucial significance of being proactive, and our management and teamwork showcased our competitive advantages, including flexibility, effective negotiations, and crisis management. Moving to the engine preventive accelerated inspections. Remember that in November, we signed a compensation agreement with Pratt & Whitney. The agreement will help to address certain fixed costs associated with the aircraft groundings during inspections and will complement outlined mitigation initiatives, which Jaime will explain in detail. Volaris' analytical tools for predicting engine performance have proven accurate, ensuring our successful efforts towards maintaining a reliable passenger schedule. However, despite an approximate 30% increase in shop capacity announced by Pratt, persistent delays in materials availability at engine shops are anticipated. This will result in wing-to-wing turnaround times exceeding 350 days. Inspections are likely to extend into 2026. Pratt is working to hard ramp up production of new materials, including full-life disks, improved seals, thermal foils, new software that eliminates vibrations, plus several other structural improvements that will be initially incorporated for new aircraft deliveries and will be available later this year for engines inducted for shop visits. Most importantly, Pratt is standing behind its product. Volaris' top priority has always been the safety of our ambassadors and our customers. Since June 2023, we have grounded 16 aircraft on average per month, impacting roughly 6.5% of our future bookings. To address this, during the second half of last year, we needed to re-accommodate and/or compensate affected passengers, which meant absorbing in a resized capacity, low-fare bookings that consequently diluted unit revenues and added some incremental costs. Beginning in October, however, we started to see positive outcomes from our capacity rationalization efforts. We reduced capacity in the domestic Mexican market, while we continued to re-accommodate our affected passengers. Additionally, overall Mexican domestic market capacity contracted as we, along with our one of our domestic competitors, progressively removed GTF engines for inspections. At the same time, we instituted strategic commercial measures to protect our financial performance. In the Mexican domestic market, we canceled routes in the ramp-up phase and adjusted frequencies on other saturated routes. Furthermore, we strategically reassigned capacity in the U.S./Mexico international market, focusing on routes for enhanced loads and higher unit revenues rather than pursuing market share. For 2024, we anticipate that on average, our network on an ASM basis will approximately be 45% international, a notable increase from 35% in 2023, which will increase U.S. dollar denominated revenues. We successfully boosted ancillary revenues to an all-time high, accounting for over 50% of total operating revenues in the fourth quarter. Simultaneously, we have effectively managed our labor force, reducing its size in headcount, while sustaining productivity at over 80 hours per month for each pilot and flight attendant. Another key focus is liquidity. At year-end, our cash position was at a level comparable to last year's balance. Additionally, our debt maturity profile and leverage remained healthy. Our ongoing efforts to mitigate risks will safeguard profitability and align with our primary objective of generating shareholder returns in accordance with our long-term strategy. For this year, Volaris' strategy is based on three core pillars. The pillar number one is fleet and capacity. Our dedication lies in preserving business continuity while minimizing disruptions to our core operations, flight service, and passenger experience. To achieve this, we secured additional capacity that will supplement some of our GTF inspection-impacted fleet. Accordingly, we executed lease extensions on aircraft that were scheduled for redelivery and secured straight operating leases for additional aircraft, thereby balancing capacity reduction with operational requirements. Furthermore, we successfully negotiated the acquisition of additional spare engines. During this quarter, Volaris analyzed wet lease capacity and we concluded that it was not strategically productive or cost-efficient. Regarding growth, it is important to note that as the capacity returns to our fleet in 2025, we will be prudent and rational. Notably, building on our lessons learned, we now have significant flexibility with our scheduled deliveries of new aircraft and lease expirations that will allow us to proactively manage capacity and prioritize profitability. We focused on our passengers by clearly and consistently communicating capacity and route availability. Our efforts have proven effective despite Volaris' advanced booking profile being particularly challenging and sensitive. Pillar number two, network optimization and profitability. We view our GTF capacity reduction as an opportunity and we will capitalize on this opportunity to achieve strong profitability as we did bouncing back from the pandemic. Our strategy involves redesigning our network and reallocating capacity to prioritize profits over defending market share in highly competitive sectors. Capitalizing on the return of Category 1, we plan to increase higher-margin international flights and take advantage of reduced capacity throughout Mexico, aiming for stronger yields and unit revenues without compromising network defensibility. We're boosting TRASM and effectively managing CASM-ex. Our demand is distinct and more elastic, driven by appealing prices and safety for bus switching passengers, the convenience for growing adopters and frequent passengers, and the resilience of our VFR network. We anticipate ancillaries to constitute more than 50% of our total revenues. We expect this to further enhance our profit profile with attractive margins. The labor market in our regions varies significantly from that in the United States. Additionally, we distinguish ourselves by maintaining a healthy balance sheet. Here's where Volaris stands out from the U.S. industry and low-cost carriers in South America. Notably, for example, we recently agreed to a mutually satisfactory 5% wage increase in Mexican pesos for 2024, effective February 1. All costs remain controlled, with the lower ASMs expected to be the primary constraint on cost performance this year. Important to note that once the capacity is reinstated, our cost advantage will increase versus our competitors. Pillar number three, elevating passenger experience and cultivating talent for future growth. In previous disruptions, we've navigated challenges while laying foundations for long-term growth, and this time is no exception. During this pause in our growth, our focus on differentiating Volaris includes renewing the customer promise to foster a positive brand perception; offering a new, optimized, and reliable schedule with no need for further cancellation; investing in technology as a growth platform; and balancing short-term efficiency with long-term talent needs. Before I turn the call over to Holger, I want to highlight that our valued ambassadors consistently demonstrate exceptional dedication and work ethic. I am optimistic about our market guidance. Supported by positive trends in TRASM, our successful execution of the capacity reduction and itinerary realignment further strengthens this confidence. Moving forward, we will continue to prioritize profitability and will maintain a conservative approach to managing our balance sheet. I would now like to turn the call over to Holger, who will cover our fourth quarter operational performance and commercial plan for 2024.

Thank you, and good morning, everyone. Overall, we had a very dynamic 2023 that featured strong headwinds and robust demand throughout our network. During the last year, we navigated the prolonged recovery of Category 1, government-related capacity reductions at Mexico City International Airport, and the announcement of GTF engine-related accelerated inspections leading to aircraft groundings. Despite these challenges, we grew, increasing ASMs by 10% compared to 2022 and expanding our fleet by 12 aircraft. Our full-year 2023 results included a robust fourth quarter, which benefited from strong demand over the holiday season, our excellent operational execution, and steps to address the impact of the aircraft on ground. For 2023 as a whole, ancillary revenues represented 49% of total revenues, an increase of approximately 8 percentage points compared to 2022. Throughout the year, we implemented initiatives contributing to this increase. In spring, we introduced the annual pass, allowing Volaris customers to fly as much as they want, only paying airport fees. We are approaching 30,000 annual pass flyers in under a year. Our v.club membership, featuring the new zero-fare ticket, continues to attract strongly, contributing to 15% of our ticket sales. The unbundled fare is gaining traction with smaller businesses, and we are tailoring it more to cater to this segment. Now, double-clicking on the fourth quarter. Our network-wide load factor rose to a strong 88.1%, including a 91.8% load in our Mexican domestic market. We managed capacity so that RPM growth was flat despite a decrease of 1% in ASMs, highlighting demand remains especially strong in our core markets and stations. However, in the fourth quarter, we had to reduce domestic ASMs by 11.2% year-over-year while growing international ASMs by 21.7% due to the accelerated inspections required by Pratt & Whitney. Our capacity focus was on adding frequencies to the U.S. transporter market, capitalizing on the restoration of Mexico's Category 1 to strengthen our presence in the U.S./Mexico market. This not only allowed us to reallocate capacity from concentrated domestic markets, such as Tijuana and Guadalajara, but we also addressed dilutions in the Central American market caused by the accelerated capacity we added last year. Notably, fourth quarter TRASM increased to $0.096, marking a 10.7% rise compared to last year, an achievement ranking among the best in our history. It's important to highlight that despite witnessing strong fare trends in the domestic market, including a 17.4% increase in December, our average base share in the fourth quarter was actually 2% lower than last year. Instead, unit revenue was primarily driven by effectively capturing demand and by robust growth in our ancillary offerings. We have now achieved our target of over 50% of our total operating revenues. In summary, our revenues per passenger continue to be very strong, while we observe unit revenue pressures reported by our U.S. peers. Ancillary per passenger reached $55 in the fourth quarter, a 33% increase, and registered $61 in December as holiday flyers increasingly chose our ancillary offering. Looking ahead to 2024, we believe ancillaries will reach 50% of total revenues for the entire year for the first time. Our initiatives to evolve our offerings this year include continuously optimizing pricing through personalized and advanced pricing strategies, launching new products and services, including insurance options designed to offer flexibility, and increasing the presence of our co-branded credit card, leveraging recurring revenue streams through initiatives like v.club membership services to encourage repeat service and customer affinity, creating a new mobile app that will improve the overall passenger experience. On a different note, our transporter traffic between Mexico and the U.S. demonstrates consistent growth propelled by the positive impact of nearshoring and the need for mobility. We believe that any potential new restrictions to land border crossings will have no negative impact on our transporter air traffic. It is crucial to emphasize that the foundation of our traffic between the U.S. and Mexico, particularly along the border regions is rooted in our robust network strength in the Northern part of Mexico, and it has proven resilient through several cycles. Our leisure traffic to the Mexican beaches continues to thrive. Unlike the challenges faced by U.S. carriers, our leisure network predominantly caters to the domestic market. None of the domestic Mexican carriers have allocated surplus capacity to these markets, contributing to the robust and sustainable nature of our operations in this segment. Optimizing our international revenue mix is a key driver of our enhanced financial performance. The inclusion of longer flight sectors not only ensures the more efficient utilization of our fleet but also holds the potential for other substantial benefits. We estimate to reach around 50% of our collections in U.S. dollars in 2024, reducing foreign exchange exposure on our P&L. The positive trajectory extends further with the increasing adoption of the ancillary offerings, particularly popular among passengers on extended journeys, combined with improved domestic yield, attributed to lower industry capacity. We are poised for robust TRASM results in 2024. This encouraging trend, initiated in the fourth quarter of 2023, is already evident, and booking curves indicate a continuation of this favorable trend in the coming months aligned with our 2024 guidance. Passenger experience remains a priority; however, in the second half of last year, our passengers experienced an unfortunate number of cancellations due to the mentioned challenges earlier on. We are committed to reversing this trend in 2024, completing a more reliable schedule. Our priority will be delivering the Volaris promise to our customers and flying them reliably, safely, and on time. We are doubling down on making all interactions with Volaris self-serviceable, especially for the day of departure. This will enhance customer satisfaction with an increasing mobile affinity. This effort remains crucial for fostering strong and recurring demand for the Volaris products. Regarding the network, this year we will generate a more balanced ASM production with a split of around 55% in our Mexican domestic markets and 45% international. The restoration of Category 1 will further support capacity allocation to the United States, enabling us to increase frequencies on historically profitable routes. We are excited about our partnership with Frontier Airlines despite the disappointment of Mexico's downgrade to Category 2 in the past two years, which impeded us from fully capitalizing on this collaboration. We are keen to revive our engagement this year and anticipate achieving significant outcomes. We are well positioned with our enhanced brand presence and greater distribution power. Concurrently, we've witnessed Frontier's growth in their market position. It's important to highlight that our partnership with Frontier remains genuine, featuring a codeshare and an overarching marketing collaboration. The absence of an ATI with Frontier underscores the authenticity of our relationship. As we move forward with reactivating this partnership, we eagerly anticipate operating on a more level playing field. In Central and South America, we are also planning capacity adjustments and a smaller footprint where markets are demonstrating sufficient capacity. In summary, we see the opportunity to have a positive 2024 by delivering on our ongoing commitments, increased TRASM through better fares, improved loads, a strong network and ancillary growth, ensuring cost leadership and simplicity, delivering exceptional passenger experience, and extracting value from our network, and ultimately becoming the preferred carrier in our markets. I will now turn the call over to Jaime to discuss our financial performance for the fourth quarter and full-year 2023.

Thank you, Holger. We are pleased to report that despite the external challenges discussed earlier, our fourth quarter performance allows us to turn an accumulated loss in the first nine months into a positive net income. Compared to the same period last year, our fourth quarter 2023 results are total operating revenues of $899 million, a 10% increase notwithstanding the 1% year-over-year reduction in ASMs due to the continued strong demand and outstanding ancillary revenue improvement. CASM was $0.0731, decelerating 2% year-over-year. Fuel was a driver of the decrease with our average economic fuel cost falling by 16% to $3.13 per gallon, while CASM-ex fuel increased 11% and totaled $0.0486. Before discussing profits, it is important to note that during the fourth quarter, compensation from Pratt & Whitney is included in the P&L, mainly as part of the other operating income. This accounting item also includes aircraft sale and leaseback gains and other accrual cancellations. As part of the mitigation plan for the engine inspections, we extended aircraft leases not only for 2024 but also for 2025. EBIT totaled $164 million, an increase of 173%, reflecting the improvement in TRASM, the benefit of aircraft lease extensions, and favorable fuel costs. This resulted in a margin of 18 percentage points and an 11 percentage point increase. EBITDAR totaled $281 million, a 35% increase. EBITDAR margin was 31%, an improvement of 6 percentage points. This is a significant shift from our performance in the first nine months of the year. Net income rose to $212 million, translating into earnings per ADS of $0.96. The cash flow provided by operating activities in the fourth quarter was $218 million. Cash outflows using investing and financing activities were $113 million and $82 million, respectively. Now moving to our full 2023 results. Our normal financial performance stands out compared to 2022. Total operating revenues of $3.3 billion, an increase of 14%; CASM of $0.0781, a 1.7% decrease over 2022. The average economic fuel cost for the full-year decreased by 18% to $3.11 per gallon. CASM-ex fuel was $0.0481, reflecting a 12.8% increase. I want to emphasize that both total operating revenues and CASM ex fuel results align with our annual outlook even as we initiated the aircraft groundings in the third quarter. EBIT was $223 million, up from $44 million for 2022, with an EBIT margin of 7%, up 5.3 percentage points. EBITDAR came in at $823 million, an increase of 40%, while EBITDAR margin was 25%, an increase of 4.7 percentage points. Net income was $8 million, translating into earnings per ADS of $0.07. Volaris finished the year with a total liquidity position of $789 million representing 24% of the last 12 months operating revenue. Our net debt-to-EBITDAR ratio decreased to 3.4 times from 3.9 times at the end of 2022. The short-term maturities of our financial debt are attributed to pre-delivery payments, which will eventually return upon aircraft delivery. In other words, Volaris has low and manageable refinancing exposure in the short to medium term. Our CapEx net of fleet per delivery payments amounted to $252 million. As of December 31, our fleet comprised 129 aircraft, up from 117 aircraft a year ago, since the departures were 197 in the fourth quarter, and our fleet had an average age of 5.7 years. Looking forward, we are working diligently on our fleet plan with Airbus and are maintaining our near-term aircraft delivery schedule. We expect 17 scheduled aircraft deliveries in 2024 and 2025, all with PDP financing and sale and leaseback commitments. We are entering this year with important financial tailwinds that put us in a good position to meet our yearly goals. Therefore, our outlook continues as follows: For the first quarter of 2024, we expect ASM reduction of 16% to 18% year-over-year, TRASM of $0.085 to $0.087, CASM ex fuel in the range of $0.055 to $0.057. Please note the primary cost of CASM ex fuel increase is due to the capacity reduction and specific fixed costs linked to the grounded fleet not fully compensated at Pratt's AOG relief. Finally, we expect an EBITDAR margin of 25% to 27%. For the period, this outlook assumes an average foreign exchange rate of MXN17 to MXN17.20 per U.S. dollar and an average economic fuel price of approximately $2.55 to $2.65 per gallon. For the full-year 2024, we expect ASM reduction of 16% to 18% year-over-year, EBITDAR margin in the range of 31% to 33%, CapEx net of financed fleet pre-delivery payments of approximately $300 million. Our full-year 2024 outlook assumes an average exchange rate of MXN17.70 to MXN17.90 per U.S. dollar and an average economic fuel price of approximately $2.50 to $2.60 per gallon for the year. Now, I will turn the call over to Enrique for closing remarks.

Thank you very much, Jaime. Before we begin the Q&A session, I want to emphasize that Volaris is dedicated to our ambassadors and customer safety and well-being. As airlines play a crucial role in connecting communities, we must exemplify safety, reliability, and humanity. In practice, this philosophy encompasses the safety-first mindset discussed today and our participation in relief efforts. Last October, we provided free transportation for emergency responders, volunteers, stranded tourists and transported humanitarian cargo from the Acapulco region after the devastation of Hurricane Otis. In January, we hosted an event discussing the role of air transportation in preventing child and adolescent trafficking. Additionally, in commemorating 10 years of Volaris joining ECPAT, a non-government organization dedicated to fighting child exploitation and trafficking, we signed an addendum to expand the protocol to our operations in countries of Central and South America. We will continue to reaffirm our commitment to the people in the communities we serve. We are confident that our corporate sustainability initiatives will foster long-term commitments from our stakeholders. As we discussed today, we have spent the past 18 years creating advantages for Volaris that make us different. We primarily serve the resilient VFR market and attract first-time flyers. Our controllable costs remain in check. Our network has been planned to capitalize on the return of CAT 1, and our codeshare with Frontier is not threatened. Volaris' balance sheet is strong and our fleet plan is flexible. Our strategies have proven effective and resilient. These unprecedented market conditions represent an opportunity to shift our focus from establishing our industry profile to prioritizing profitability and shareholder returns. Moving forward, shareholder value creation remains as important to us as ever before. Thank you very much for listening. Operator, please open the line for questions.

Thank you. The floor is now open for questions.

Hey, thanks. Good morning. So, I wanted to ask you about your international mix. Before the GTF issues showed up, you had a plan to increase international when Category 1 came back. And now, given the fleet constraints, you're redeploying to international, but also cutting back domestic, something like 25% in the first-half of this year. So, I guess, the question is, what do you think is the ideal mix of domestic versus international? Is there anything about how your network is being reconfigured today that's sort of surprising you positively? Maybe 45 or 50 is the right mix.

So, Duane, for the full-year, as we said in the call, we are planning to get to 45% international, 55% domestic, and that is very much in line with what we had planned. We will add more flying lines to the U.S. So, we will see an increase in capacity despite a full-year reduction of overall network capacity. Most of the reduction will come from the domestic market. So, we're not planning any decline in the U.S. And if you look at the first quarter, the domestic reductions in ASMs will be in the high 20 percentage points, and the international will actually increase by 9%, approximately 9% to 10%. But clearly, I need to underline that we will not abandon any of our core domestic markets. So, we will continue to defend them and be very present in those core domestic markets.

Okay. I guess, just to follow up there, Holger, do you think this 45% mix is closer to optimal, or if you had a blank sheet of paper, would it be back to the 30% that you were doing historically?

I believe we had excess capacity in the domestic market, as we noted throughout last year, and we needed to reallocatесome of that capacity to the U.S. Currently, the mix is appropriate. Additionally, it provides us with foreign exchange protection. With nearly 50% of our collections in U.S. dollars, we are safeguarding the 62% exposure we have on foreign exchange related to costs. Everything is balanced nicely at the moment, and I think the target for this year is very optimal.

Could you provide an update on the GTF grounding? What insights have you gained from Pratt over the last quarter? How should we consider the timing for resolving these issues? Is it in line with your previous expectations, or is it taking longer or shorter? Also, regarding Volaris, I know it's early, but how should we view growth for 2025? I understand there are various potential outcomes, but is there a chance capacity could decrease again next year? Thank you for your insights.

We continue to manage our operations one day at a time, which is crucial. As mentioned earlier, our tools for predicting engine performance have shown to be accurate, and we've successfully utilized them. However, Pratt is experiencing delays due to material shortages, but we observe that they are speeding up repairs across various areas. We believe that in 2024, shop times will still range between 350 to 400 days. By around February or March of next year, we may observe a reduction that could impact next year's figures, but this is just a projection based on our current outlook. I don't want to commit to a shorter timeline just yet; I think we are on the right path toward a solution.

Okay. Thank you for the thoughts.

Thank you very much, gentlemen, and good morning. Can you hear me okay, by the way?

Yes, we hear you well.

Oh, great. Thanks very much, Enrique. Just one or two quick ones for me. I think, first, as a follow-up to Duane's question, when we think about the greater emphasis on northbound U.S. routes, is it fair to say, kind of near to medium term, there should be less expansion on these domestic interstate bus routes in Mexico?

Yes, that's correct, Stephen. We accelerated our expansion into the U.S. So, we're going to have a higher percentage of our business in the international this year, and we will shrink capacity in the domestic market, absolutely.

Great. Thank you, Holger. And just another related question. If you could refresh my memory. Very helpful color on domestic versus international. But within that, could you unpack a little bit how you're thinking now about Central America to U.S. non-stop or Central America to Mexico?

Yes, Stephen. So, last year, we accelerated our expansion in the Central American market to the U.S. Given the restrictions in Mexico with CAT 2 status of Mexico, this year, we have right-sized the Central American capacity. We're reshifting some of the capacity back to the domestic market in Mexico and to the Mexico/U.S. market. So, we will see a slowdown of the accelerated growth that we saw last year. However, Central America continues to be a cornerstone of our growth strategy, and we believe in the long-term opportunities in Central and South America.

If I may, Holger, I think it's really important to understand that the whole move that we're doing remains within our core practice of shifting passengers from the buses into the aviation market. And the markets that we are tackling are also bus markets, and the capacity is being reinforced in those markets all over the place, in Central America, in Mexico, in Mexico to the U.S.

Hi, good morning, guys. This is actually Shannon Doherty on for Mike. Just my first question. Mexicana has been up and running for about two months now. Are you seeing any notable competitive impact thus far?

As we all know, Mexicana is flying with very small traffic volumes, and I think that's basically where we are. And they are only operating out of Aeropuerto Felipe Angeles, the new airport. And those are the facts. I cannot comment on anything further.

That's fair. And maybe to elaborate a little bit on Steve's question, how are your Costa Rica and El Salvador operations doing? Can you remind us how many aircraft are under these certificates today and maybe how this has been impacted by the GTF groundings versus your original plan for 2024? Thank you.

Thank you, Shannon. Currently, we are planning to operate six aircraft in the region this year. We have two Air Operator Certificates in Costa Rica and El Salvador. The traffic primarily focuses on routes from the U.S. to Central America, which extends our core business of VFR operations between Mexico and the U.S. We do not anticipate any impact on our Central American business due to the GTF engine issues. We have successfully adjusted our capacity to ensure there is no effect on our operations in Central America. As mentioned, we remain optimistic about the opportunities in this region.

Thank you. Hi, guys, thank you very much for the opportunity. I have a couple here. One is on costs. If you could please provide some incremental information on the aircraft and engine variable lease expenses? This line became positive this quarter. What can we attribute it to? And also, the other operating expenses line came much above what we were seeing in past quarters. What could explain that? Any one-off impact? And what is the recurring level going forward? This is the first one. And then I can make the second one later. Thank you.

Sure. If you look at the aircraft and engine variable lease expenses, it accounts for the reimbursement due to the extensions of the planes that we took and also the redelivery reimbursements. Remember, as part of the mitigation plan of the AOGs, we extended planes, we bought planes, and also canceled some redelivery provisions.

Sorry, I think I missed the other operating expenses explanation. Sorry about that.

It's basically as a result of the growth of the business. Consider that we have added 12 aircraft into the business that we shifted capacity into the U.S. markets in the 4Q. So, the line is not any specific one-time effect. It's just as part of the natural growth that shifts up the mix within the domestic and international.

Okay. Pretty clear. Thank you. My second question is regarding margins. So, the 31% to 33% margin guidance for this year, is it negatively impacted by a lack of scale and all the SG&A costs that are not being diluted into more capacity, but at the same time, it has a positive effect on the compensation from Pratt and also the higher yields that this capacity constraint is causing. Any guess on what is going to be a normalized margin when aircraft are back to operate? In terms of you having a positive effect on cost dilution, but at the same time a negative one on margins and the compensation already done. What would be your best guess on a normalized margin level going forward? Thank you.

I think our target is to be profitable and our goal mid-term will be to consistently deliver a low to mid-30s EBITDAR margin. That's the goal.

Thanks very much, operator. Hi guys. Can you just comment, I have two questions. One on how we should think about the maintenance credits? And my second question is how are bookings looking for Holy Week?

Helane, the maintenance credit is something which is contained in a confidentiality agreement between Pratt & Whitney and Volaris. So I cannot give that many details on it. But having said that, Jaime explained where it is accounted for. That's the first line on the P&L, and that's that credit that you see. And I think it's compensating the vast majority of our fixed costs and it's not covering all of that, and it's not recovering the revenues that we are losing.

Right.

It is difficult, given the confidentiality agreement, to give more details, but we're planning to give a forecast of our numbers, especially the CASM number and EBITDAR, on a quarterly basis. And we'll provide for the second quarter a guideline right at the beginning of the following quarter.

And Helane, the booking curve for the Spring break and the Easter high season, just to remind everyone that Easter falls into the last week of March, so just touches the first quarter and then most of it in the second quarter in April. And I can tell you that bookings for the first quarter look solid across our network and are very much in line with the quarterly guidance that we provided to you. We're expecting a TRASM between $0.085 to $0.087, which is up 11% to 13% versus the previous year. And if I break that down between domestic and international, we're seeing quite solid demand in the domestic, obviously also helped by the reduction in capacity that we put through in the network. And international remains strong despite the capacity increases that we put in the network, taking advantage of the renewed Category 1 status. So, in both markets, really quite solid bookings throughout the first quarter and into the Easter high season.

That's very helpful, Holger. Thank you very much.

Thank you, Helane.

Thanks, Helane.

Yes. Good morning, everybody. So I have two questions. The first one, it's a follow-up on margins. You delivered 31% in the fourth quarter. If we adjust for seasonality, this implies on a run rate on an analyzed basis of around 28%, and you are guiding for improvement between the fourth quarter of last year and what you expect for the full-year 2024. Can you help us understand where the improvement comes from? Is it better pricing more than offsetting less fixed cost dilution, or something else? And the second question, you have alluded to that to a certain extent, but can you clarify in terms of point of sale, roughly how much of sales do you expect to come from the U.S. versus Mexico? You mentioned at some point international versus domestic routes with the breakdown of revenues from that perspective. But it will be interesting to hear from you where you expect for the breakdown in terms of point of sale will land with this new configuration of the network more tilted towards international. Thank you.

Okay. So, I'll start out with answering your question from the revenue perspective. Clearly, this year we're seeing an improved unit revenue that is driven by the solid demand we see in the domestic market and international market despite the reduction in capacity. We're seeing also a very solid fare environment, and we are pushing ancillary revenues further. So, the unit revenue improvement comes from load, fares, and ancillaries in 2024. And obviously, we right-sized our network and re-shifted the capacity into the most profitable markets, as Enrique already mentioned. In terms of point of sale, the ASM split that we expect towards the end of the year is going to be 45-55. And then if you look at U.S. dollar collections and point of sale, it's actually more balanced. It's going to be somewhere around 50-50. And that should result in an EBITDAR margin guidance that we gave you for the full-year of 31% to 33% for 2024. And that's from the revenue perspective.

Thank you.

Hi, good morning. I don't know if you can hear me.

Yes, we can.

Thanks. I have a question on labor. What are you seeing in terms of labor increases for your operations in Mexico?

As I stated in my presentation, the company was able to close a negotiation with the union with a base salary increase for the year of 5%.

Hey, good morning. If I could ask two questions, please. The first one, just following on from the last question on labor. You're obviously reducing capacity 16% to 18%. And headcount came down in the fourth quarter, I think you mentioned. Can you confirm what kind of magnitude headcount should fall in 2024 versus 2023 in the context of that capacity cut? And then the second question, ancillaries has clearly been a big focus within this call. Can you give us a sense today how much higher international routes are relative to domestic in terms of the ancillary proportion of total revenue? I guess, if the total is 49% across the overall network, you must be hitting 60% or so on international routes. Thank you.

So, answering your first question, it's going to be a little bit higher than what it was last year. There's two reasons for that. The first one is because of the variable capacity that we have during the year; sometimes we go up and sometimes we go down in terms of the aircraft that we are sending or putting down because of the anticipated revisions. And then it's going to be a little bit higher also because in terms of technical professionals, we need to continue preparing people and we have this growth for next year or we need to be prepared for some growth during next year, and especially the following year. So, we preserve the technical capacity. That's why it's going to be maybe 1% higher, 1.5% higher than what we had last year. Referring to the second question, Holger will answer you.

Yeah. So, clearly, the international portion in the ancillary pieces is higher than the domestic portion, mostly driven by higher bag revenues and things like seat assignments for the longer stage length itineraries. We don't provide the exact breakdown, but I can tell you that the U.S. and international portion is higher than domestic. And thus, the ancillary percentage as a total for the 2024 will be helped by a shift of capacity to international itineraries.

Thank you. Excuse me. This concludes today's question-and-answer session. I would like to invite Mr. Beltranena to proceed with his closing remarks. Please go ahead, sir.

Thank you, operator. Thank you, everyone. Like the past several months, the year ahead will be challenging and rewarding. I want to thank you, our family of ambassadors, the Board of Directors, our investors, the bankers, the lessors, and suppliers for their unwavering support and commitment to Volaris. I look forward to addressing you all next quarter and seeing you in the upcoming conferences over the next couple of months. Thank you very much.

This concludes the Volaris conference call for today. Thank you very much for your participation, and have a nice day.