Grupo Aeromexico, S.A.B. de C.V. American Depositary Shares (each representing ten (10) Common Shares) 2026 Q3 Earnings Call

Good morning, everyone. Joining me today to discuss our results are Andrés Conesa, Chief Executive Officer, Aaron Murray, Chief Commercial Officer, and Ricardo Sánchez 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 any plans and expectations expressed in this call, including the risk factors disclosed in our SEC filings. During this 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 IFRS measures in earnings release. Both our call and the earnings release are available on our website. It is now my great pleasure to turn the call over to Andrés Conesa.

Thank you, Lucero, and good morning, everyone. I appreciate you joining us today to discuss our third quarter 2026 results. We delivered strong third-quarter results, reflecting once again the resilience and unique strengths of Aeromexico's business model. These results also demonstrate the significant progress we have made in recent years to build a stronger and more flexible company, better positioned to navigate periods of uncertainty, including today's high fuel cost environments. I would like to thank the entire Aeromexico team for their commitment and discipline in executing through a challenging environment. By putting our customer first, while maintaining strong cost control, the team continues to protect the quality of our service and capitalize on attractive revenue opportunities. EBIT margin reached a strong 12%, supported by record quarterly revenue that came in above the midpoint of the June guidance range.

In a quarter defined by higher-than-expected and volatile fuel prices, delivering a double-digit EBIT margin is a significant achievement. It demonstrates the strength of our business, our ability to capture premium revenues, and the disciplined execution of our teams. Demand remained healthy, supported by a successful peak season that extended through September and delivered outstanding load factors. We also continue to see strong contributions from our premium products and loyalty programs, which enhance our offering and reinforce customer preference for Aeromexico. Premium revenue represented 42% of total revenue, up one percentage point year over year, while loyalty penetration reached 40%, an eight-point increase versus last year. Total revenue grew 14% year over year, driven by premium and other revenue streams, including cargo and loyalty. Together, these factors, along with focused revenue management initiatives, supported our performance during the quarter.

Capacity increased by around 1% year over year in the third Q, and as the temporary negative impact of the World Cup in June and July normalized, we saw a clear improvement in load factors. August reached 90%, and September recorded 87%, which is a very strong level for a shoulder season month following the summer peak. More importantly, forward bookings remain strong, supporting a constructive outlook for the remainder of the year. This gives us confidence that underlying demand trends remain solid and that our capacity is well aligned with market conditions. Revenue growth more than offset the year-over-year increase in fuel costs, despite jet fuel prices being generally above our guidance. Fuel costs increased by approximately MXN 170 million year over year in the third Q, including nearly MXN 93 million above the guidance we shared with you in early July.

However, revenue growth was not enough to offset the combined increase in fuel and non-fuel costs. In addition to the higher-than-expected fuel expense, we experienced an anticipated increase in non-fuel costs derived from inflationary pressures and unexpected cost pressures resulting from the appreciation of the Mexican peso. Even so, our teams responded through revenue initiatives, fuel recapture actions, and disciplined capacity deployment, enabling us to deliver a very strong level of profitability in the quarter. This third Q also showed early signs of a better cost ex-fuel trajectory. Some pressures, including FX, started to normalize, and our teams continued to manage the cost base with discipline. Looking ahead, as operating leverage builds, CASM, excluding fuel, is expected to continue to improve.

This is important because it demonstrates that beyond the temporary impact of fuel, we believe that the underlying business is moving decisively in the right direction, with improving cost momentum and a stronger foundation for sustainable profitability. As a result of this structural resilience, we ended the quarter with a cash position above the level reported in the third quarter of 2025. Financial debt, including leases, continued on a downward trajectory, while we maintain our investment program without raising additional debt. Our focus remains on investing for the future while protecting liquidity and preserving the financial strength of the business. Our network will continue to grow through the recently announced routes launching in 2027, including Mexico City to Milan, Guadalajara to Paris, Nassau, and Montego Bay.

This expansion reflects our confidence in the long-term demand outlook and our disciplined approach to growth, adding capacity selectively in markets where we see attractive opportunities to generate profitable returns. The U.S. Department of Transportation decision to immediately revoke its prior order disapproving certain scheduled Mexican carriers marks a very positive development for Aeromexico. It removes an important restriction on our ability to add frequencies and launch new scheduled services between Mexico City and the United States, subject to applicable regulatory requirements. This gives us greater flexibility to capture attractive growth opportunities, strengthen our transborder network, and offer our customers more connectivity between Mexico and the United States. Taking care of our customers also means delivering a reliable operation every day in every market we serve. This is something our teams have been focused on, and the results are clear.

Cirium once again recognized Aeromexico as the most on-time airline in the world during the third quarter. Together with our performance in the first and second quarters, this positions us very strongly to receive this recognition for the third consecutive year, a feat that no other airline has achieved in history. Building on our strong third quarter results and solid outlook, we plan to remain focused on operating reliably, protecting revenue performance, managing costs with discipline, and further strengthening our balance sheet. Ricardo will provide more detail on our full Q and full year outlook shortly. Before that, I want to highlight the positive opportunities ahead with resilient demand and a favorable fare environment supporting continued revenue momentum. We also see meaningful operating leverage embedded in our existing fleet.

At the same time, we anticipate continuing to invest selectively in customer experience and in the network that makes Aeromexico the preferred choice for travelers. We are confident that this combination of strong execution, disciplined growth, and a resilient business model will continue to differentiate Aeromexico and create long-term value for our customers, employees, and shareholders. With that, I will turn it over to Aaron to discuss our commercial performance in more detail.

Thank you very much. Thank you, Andrés, and good morning, everyone.

I want to thank the entire Aeromexico team for their hard work and dedication and our customers for their continued loyalty. As Andrés mentioned, we delivered the strongest quarterly revenue performance in Aeromexico's history, with total revenue of $1.62 billion, up 13.6% year over year. This performance reflects strong demand across the network and the benefits of the commercial initiatives we are executing. International revenue showed strength across all entities, increasing 17.4% year over year, led by long-haul markets in the U.S. region. Growth in the U.S. region was especially notable given the high comparison base, as last year's third quarter marked the inflection point in U.S. demand recovery. Regarding domestic, performance strengthened throughout the quarter as we distanced ourselves from the World Cup, resulting in domestic revenue growing 6.7% year over year.

Turning to commercial initiatives, Aeroméxico Rewards continues to be an important driver of customer engagement and revenue quality. As Andrés mentioned, program participation reached a new record in the third quarter of 40%, up 8 points year-over-year and 19 points since the program's reacquisition and rebranding in 2023. Redemption revenue grew 27% year-over-year, 2 times more than total revenue growth for the quarter, as investments in the program continue to bring value to customers. Regarding modern airline retailing, our redesigned branded fare structure is driving significant incremental revenue by better aligning our product offering with different customer needs and willingness to pay. This enables us to more effectively position our premium offering while expanding our ability to compete for more price-sensitive demand.