Guilherme Mendes • J.P. Morgan Chase & Co.

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CFO Jorge Arruda explained that conversations with technical teams regarding the Argentine concession's economic equilibrium are ongoing and have never been interrupted. On the M&A front, he confirmed that CAAP is actively evaluating the former CCR airport assets as an interesting opportunity, noting the process is confidential, and the market will be updated as progress is made.

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CEO Pedro Heilbron acknowledged that yields have already declined from 2023 levels but emphasized that Copa has prepared for this by focusing on cost efficiencies, expressing confidence in delivering strong results even in a lower-yield environment. CFO Peter Donkersloot stated that approximately half of the $200 million share buyback program has been executed to date.

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CEO Pedro Heilbron provided a Q1 traffic breakdown of approximately 20% business and 45% leisure. He explained that RASM pressure comes from currency weakness in Brazil and increased competitive capacity in Mexico and Central America, while other regions remain solid.

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CEO Pedro Heilbron identified Brazil and Colombia as key markets where industry capacity has grown significantly, close to the 20% range, compared to a broader regional average of 6-7%. He noted that this includes some of Copa's own capacity growth but that the overall increase is impacting the competitive environment in those specific countries.

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CEO Ricardo Dueñas Espriu confirmed the MDP CapEx is similar to the previous plan in real terms and updated the traffic forecast to mid-to-high single-digit growth for the rest of the year. CFO Ruffo Pérez Pliego attributed strong traffic performance, especially in Monterrey, to robust industrial activity and economic performance linked to near-shoring.

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CEO Ricardo Duenas stated that the full-year 2024 traffic outlook is now projected to be in the 'mid- to low negative single digit' range, contingent on the Pratt & Whitney engine issues. He added that Acapulco is currently operating at approximately 50% of its pre-hurricane capacity, with its recovery dependent on the city's overall recuperation.

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CEO Roberto Alvo Milosawlewitsch projected high single-digit ASK growth for 2026, driven by a solid fleet plan and strong demand, noting particular strength in premium revenue and a stable situation in most markets. CFO Ricardo Bottas explained that shareholder returns are considered within a broader financial policy framework that includes liquidity, a leverage target at or below 1.5x, and achieving a BB+ rating. CEO Alvo added that growth opportunities are prioritized before decisions on further distributions are made.

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CEO Roberto Alvo Milosawlewitsch projected high single-digit ASK growth for 2026, driven by a solid demand environment and fleet additions, while noting the overcapacity in Colombia has balanced out. CFO Ricardo Bottas explained that shareholder returns are considered within a broader financial policy framework that includes liquidity, leverage targets (at or below 1.5x for 2025), and credit rating goals. Alvo added that growth opportunities are prioritized before further distributions.

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CEO Roberto Alvo Milosawlewitsch highlighted that flexibility comes from a fleet of older, low-capital-cost A319s, which allows capacity adjustments without altering new aircraft deliveries. Regarding the potential Azul-GOL merger, he stated it is premature to speculate on the non-binding agreement and that LATAM will react if the situation develops.

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CEO Roberto Alvo Milosawlewitsch explained that while the company's strong balance sheet provides options for growth investments, there was nothing specific to report at this time. On competition, he identified domestic Colombia as a market with overcapacity and noted some seasonal capacity intensity between the U.S. and Brazil, but stated that most other markets remain relatively balanced.

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CEO Adolfo Castro Rivas stated that domestic traffic should improve as the Pratt & Whitney engine issues have bottomed out. He noted FX impacts duty-free sales directly and indirectly influences spending behavior in other commercial areas. On his follow-up, Mr. Castro acknowledged that the sargassum situation is particularly severe this year, calling it a 'very tough situation'.

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CEO Adolfo Castro Rivas projected that domestic traffic should improve as engine-related issues have bottomed out. He noted the FX impact on commercial revenue is indirect, affecting tourist spending power. He acknowledged that sargassum levels are very high this year, which presents a challenge, particularly during the summer season.

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Adolfo Castro Rivas stated he expects the Mexico City airport capacity restrictions to be eased by Q3 2025, from 43 to at least 52 operations per hour, which is crucial as the region generates 50% of the group's domestic traffic. He confirmed that the 2.9 million passenger projection for Tulum this year is very close to the original MDP expectation of approximately 3 million.

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Executive Adolfo Castro Rivas stated that Tulum's traffic is performing largely as expected, projecting 2.9 million passengers for the year. He confirmed the legal process for the Dominican Republic asset is ongoing with no new updates, and while the company reviews all opportunities, there are no significant new projects in the short term.

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CEO Raúl Revuelta Musalem responded that based on their analysis, an acquisition of CCR would not require a capital injection due to GAP's healthy balance sheet. He also stated that the unbundling of fees by airlines is not a new practice and is not expected to impact traffic trends.

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Executive Raul Musalem expressed continued confidence in the full-year traffic guidance, citing strong load factors and unmet domestic demand due to aircraft engine issues. He also stated that a final determination on the Turks and Caicos bidding process is expected from the government during May.

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Executive Raul Musalem responded that while it's based on public information, an increase in capacity at Mexico City Airport would be good news for the entire Mexican airport industry. He reasoned that more slots in Mexico City would allow for more efficient airline operations and turnarounds, which could in turn lead to additional operations at GAP's airports.

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Holger Blankenstein, EVP of Airline Commercial & Operations, confirmed that demand patterns have stabilized and improved since Q1, with the second half of the year tracking stronger. He described the competitive environment as rational, noting that the industry has adjusted capacity downwards to align with current demand, a move Volaris initiated.

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Airline Executive Vice President Holger Blankenstein clarified that VFR traffic is the most affected segment, while leisure demand remains relatively strong, especially for domestic beach routes. He attributed the Q1 TRASM decline primarily to the 20% depreciation of the peso, noting that in constant currency, the decline would have been only about 7%.

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CFO Jaime Pous explained that the company has a natural hedge against foreign exchange fluctuations, aiming to increase U.S. dollar collections to 50% to align with its 60% USD-denominated cost base. CEO Enrique Beltranena stated that based on recent meetings, authorities do not expect to change the number of slots in Mexico City.

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