Felipe Neves

Felipe Neves asked about the expected evolution of CASK ex-fuel throughout 2026, considering the impact of FX on wages and maintenance, given strong top-line growth but stable margins. He also inquired about the future trajectory of premium revenue share, following its significant growth.

Answer

CFO Ricardo Sánchez Baker and CEO Andrés Conesa explained that CASK ex-fuel will be influenced by peso appreciation (increasing peso-denominated costs like labor) and the annualization of ownership costs from new MAX aircraft. They noted a mathematical impact on margins due to a higher revenue base from FX appreciation, alongside operational leverage from existing aircraft. Chief Commercial Officer Aaron Murray stated that premium revenue share (42% in 2025) has grown due to consumer demand and improved retailing, expecting it to continue growing slightly faster than main cabin revenue.

Felipe Neves asked about the expected evolution of CASK (cost per available seat kilometer) excluding fuel throughout 2026, including the impact of FX on wages and maintenance, and how this contributes to margin stability. He also inquired about future expectations for the share of premium revenue, given its significant growth.

Answer

CFO Ricardo Sánchez Baker explained that 2026 costs include labor increases in line with inflation (peso-denominated, thus impacted by a stronger peso) and the annualization of ownership costs from 17 MAX aircraft, leading to some pressure on the cost side and relatively stable margins. He also noted a mathematical impact on margins from FX appreciation. CEO Andrés Conesa added that operational leverage from existing aircraft capacity should lead to good CASK ex-fuel numbers in the next two to three years. CCO Aaron Murray highlighted that while premium cabin margins are slightly higher, both main and premium cabins are profitable. He noted that premium products now represent 42% of passenger revenue, up from mid-twenties pre-pandemic, driven by consumer appetite and improved retailing capabilities. He expects premium revenue to continue growing at a slightly faster clip than main cabin revenue.