Greetings. Welcome to the Avianca Group's Q3 2024 performance call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Maria Cristina Ricardo, head of investor relations. You may begin. Thanks for being here. Good morning, everyone, and thank you for joining us today. With me today are Adrian Neuhauser, Chief Executive Officer of our group, Frederico Pedreira, Avianca's Chief Executive Officer, Rohit Philip, Avianca's Chief Financial Officer, Gabriel Oliva, Avianca's Chief Operating Officer and Avianca Cargo CEO, Matt Vincett, LifeMiles CEO, and Nicolas Alvear, Vice President of Treasury. Financial statements for the period ended September 30th, 2024, and the presentation that we will show you today are available on our investor site. Today's conference call is being broadcast, and the replay will be available at the same site shortly after the end of the call. Before we proceed, I would like to remind you that during this call, management will make statements or remarks that may be forward-looking statements and may include, but are not limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties that could cause actual results to differ materially from those projected or suggested. Today, Adrian and Fred will start our call with an overview of the state of the business, and then Rohit will walk you through our third quarter 2024 financial performance. As always, our prepared comments will be followed by a question-and-answer session. With that, let me turn the call over to Adrian. Thank you, Maria Cristina, and thank you, everybody, for joining us today and for the time that you spend on understanding us and covering us. Operator, if we could turn to slide two, please. So as is consistent with prior quarters, we continue to focus on delivering on our simplified customer promise, being punctual, reliable, and convenient, and maintaining the cost discipline that you have seen that we believe is a characteristic of the business that we're now running. We think that makes us one of the most competitive airlines in Latin America, not just because of our cost structure, but also because of our network. And we'll tell you a little bit about the changes that we're making in our network as the year rolls by. To kind of hit the highlights of what we've achieved during the quarter, EBITDA was now flat to last year at $358 million. That's a 26.2% margin. That compares to about 28% last year. So we're starting to converge back to last year's margins. Our CASK ex fuel remains stable at 3.9 cents despite inflation, despite a significantly lower stage length than last year, and highlighting our cost discipline. Our cash balance strengthened. There's been some pluses and minuses there, and Rohit will take you through that in detail to reach $1.1 billion at September 30th despite seasonal and timing impacts. And we used some favorable market conditions to raise additional liquidity in there. And our net debt to LTM EBITDAR just tipped up very slightly, largely as comparable quarters sort of moved along. That's in spite of pretty significant capacity growth, and we'll show you that. LifeMiles continued to generate solid results. Our cash EBITDA reached $44 million compared to $30 million last year. We plan to continue to invest in the loyalty program, and we believe we're going to drive it to boost its contribution to our passenger network, and we'll talk a little bit about that on the next slide, and cargo revenues were $138 million during the quarter, aligning with last year as we saw the markets in Latin America begin to recover, and also partially because we've started executing on our fleet renewal. Turning to the next slide, please, operator, slide three, so our transformation over the past three years, and you guys have seen this, was focused on ensuring cost-disciplined operation. We continue to maintain laser focus on that. You saw us holding to the 3.9 in spite of inflationary pressures, etc., but as we hold on to that cost advantage, we're now also adding in a drive to push up our yields and drive margin that way. So a couple of initiatives that I want to highlight. The first one is going back to capture premium revenue. So we relaunched a narrowbody business class service on 11 routes out of Bogotá. We have a pretty distinctive hard product. We talked about it, I think, not in the past couple of calls, but in prior calls. Our configuration creates three rows of premium seats in the front that are actual, similar to what you would expect in U.S. domestic first class in terms of hard product that we have been selling in sort of a big seat format. On these 11 routes, we moved back to selling it as a fully loaded business class with distinctive soft service and also being able to market it as a business class through not just our direct channels as a bundle, but really as a business class price ticket through GDSs. We've seen that to be very successful. We're now expanding that service into additional routes. We're going to be at 34 routes by the end of the year. We're also investing in our long-haul business class on widebodies. We're rebranding that long-haul business class to Insignia to distinguish it from this Americas Business Class on narrowbodies. That's coming soon in November, and we're driving up yielding there. All of that is tied, as I mentioned, to also how we're going to start redeploying the use of our loyalty program. It's very distinctive in Latin America because it is the only loyalty program, large loyalty program that's aligned with a major alliance as part of Star Alliance. We think that drives a pretty distinctive position there. The second part of this, and this will go to a theme that I'm sure you all will talk about more in Q&A, but we talked a lot about it in our last quarterly call, was the structural oversupply in Bogotá. When you look at what happened in Domestic Colombia over the last year as a result of a decision by the regulator to allocate more capacity in Bogotá and then consequential positions by us and by our competitors to each take our fair share of that additional capacity, there has been for at least the last three quarters a pretty significant oversupply, we believe, in Domestic Colombia, and that was the largest theme of our underperformance in the second quarter. What we are now doing to mitigate that is starting to redirect some of that capacity into international markets. That has several effects. Obviously, it deploys low-margin capacity into higher-yielding markets, which is good for us. It also takes capacity out of the domestic market, which is good for us with the remaining capacity that we have in the domestic market as we see supply and demand within that market start to align better. It also lengthens our stage length. So you'll see that the effects of that come through in the coming quarters. And it allows us to continue to retain our slot share, which we see as a very significant asset in Bogotá. The obvious question is, why did we not do that before? And the answer is because that requires flying more hours, and flying more hours requires more equipment than what we had available to us when this initial increased allocation of slots was announced. So as we've taken more aircraft and we're able to start moving them around, we're seeing that capacity redeployed. We've launched nine international routes through September, but we're announcing another 14 that will start during the winter. So pretty significant network reallocation there. And then finally, in other highlights, we announced and finally closed in October a strategic investment in Wamos Air. Wamos Air is about a dozen 330s operated in ACMI out of Madrid. It's an airline that has a consistent track record of profitability. It has been net income profitable every year of its existence, except through COVID. It gives us a European certificate that we can align with. It gives us increased exposure to wide bodies. And we think it's a very interesting play as we think about continuing to grow connectivity between Latin America and Europe, not only from Colombia, but from the rest of our bases. So that's it for my highlights. And with that, I'm going to turn it over to Fred, and I'll be around for Q&A. Thank you so much. Thank you, Adrian. Operator, slide four. On top of what Adrian just mentioned, a couple of things that are worth talking about, about the third quarter. Number one, we had our all-time record passengers carried in the quarter with 9.7 million. And two, as Adrian was saying, this redeployment of capacity out of Colombia with our original plans for the year are consolidating our network and making it the most extensive network in our history. We opened 26 new routes in 2024. And by the end of the year, we'll be flying to 167 routes to 81 destinations. That is by far the largest network in terms of connectivity that we had in our history. Also mentioning, and worth mentioning in Q3, we went back to some of our most iconic routes like Paris and reconnected Latin America with Paris that will go to a daily service starting in December now. The second point that I want to mention is the fact that in line with our vision of focusing in our core competencies, we are partnering with MRO Holdings. MRO Holdings is a leading MRO operator in the world and one of the biggest in the world. And they will become the operator of our Medellín-based MRO. For us, that's subject to some regulatory approvals, but that will, on one hand, give us a high-quality service and ensure us a high-quality service from one of the best operators in the world while ensuring long-term competitive costs. Other point worth mentioning, we are extending our code-share agreement with Clic Air, a domestic carrier in Colombia. We started working with Clic Air in 2022. It's working really well. We're now extending to more routes and to more connectivity to our international flights that allow us to have a better reach and better connectivity in domestic Colombia towards our international flights. Last but not the least, worth mentioning that the team is doing an incredible job delivering on over 150 cost-saving initiatives that have allowed us to maintain one of the most competitive cost structures in the region. And as Adrian said, we're very proud of the 3.9, especially when you consider that our stage length this year is smaller than last year. And with that, operator, if you can move to slide number five. In terms of operation, we continue to be committed to deliver a solid operational performance. That despite the ramp-up of flights and capacity in Bogotá that Adrian mentioned at the beginning of the call, our Q3 OTP was 85%, which is a world-class result, scheduled completion of 98%. Our mishandling baggage indicator continues to be one of the best in the region. If we can move to slide six, operator. Now, starting to talk about our revenue and our revenue metrics. Our PRASM for the third quarter was 6.5. That represents a drop of 10% versus Q3 last year. But we've seen an improvement from Q2. The improvement from Q2 was in part driven by seasonality, as we explained before, but also by this capacity redeployment that we start at the end of Q2 and impacted Q3. Worth mentioning that we've seen some markets behaving better than others. We're seeing, for instance, North America for us behaving better than last year, but we continue to see markets like domestic Colombia that they are underperforming versus last year, what Adrian was mentioning a couple of slides ago. Our average fare for the quarter at $114 and our load factor at 83%. And with that, I will pass on to Rohit. Rohit, go ahead. Thank you, Fred, and good morning, everyone. On slide seven, starting with the cost metrics, as Adrian mentioned, we had a passenger CASK ex-fuel of 3.9 cents despite lower stage length and inflationary pressures. We maintained 3.9 as we did in Q1 and Q2 as well. In terms of fuel CASK, we have a 1.9-cent fuel CASK, which is a 13% reduction year-over-year. And you can see while we've significantly helped by our lower price per gallon. So our average price per gallon in the third quarter was $2.3 versus $2.9 a year ago. We've also made improvements in fuel efficiency. So we were at fuel efficiency in terms of gallons per 1,000 ASKs, whereas it was at 7 versus 7.3 last year. And that comes from a couple of things. One is we have now densified most of our wide bodies. Some of our wide bodies will have them all densified, most of them densified by the end of the year. But those extra seats give you more fuel efficiency. So it also benefits fuel CASK. And in addition, the team has a number of fuel burn efficiency savings that we're doing. And we do have a mix of a few more Neos in our fleet than we had last year. Those are the drivers that give us fuel efficiency, but as a result, we have a 13% reduction in fuel CASK. So our total passenger CASK is at 5.8 cents. As we move to the next slide eight, and moving to cargo, as Adrian mentioned, we saw for the first time this year a year-over-year where our cargo revenues for the year were flat compared to last year. So the first half of the year, you saw sort of a worse than last year. And now we've seen sort of the market turn. We've seen overall the market sort of dynamics improve. And in particular, we've seen increased demand on southbound cargo, especially electronics going from North America to South America. So those trends have helped us and overall improved yields. And so in spite of the fact that we actually have a little less freighter capacity than we had a year ago, because what we did, in spite of the fact that we had a lower freighter capacity, we've generated similar revenue trends. In terms of the refleeting initiatives that we talked about as well, the company, in addition to the six dedicated freighters we have in our Colombian operation, we had five older aircraft in our Mexican operation, which were A300s and 767s. They have all been grounded, and we're in the process of getting three A330 converted freighters into that operation. We only have one flying today. That's why you see slightly lower capacity. That'll ramp up over time. And also the Mexican operation has been restructured significantly from a cost perspective, which helps overall with profitability as well. So overall, we've seen, and we're very pleased with the direction with the cargo business. If we go to slide nine and talk about LifeMiles, LifeMiles generated sort of solid results. In terms of gross billings, in the middle of the page, you see $65 million gross billings for the quarter compared to $50 million a year ago, and cash EBITDA at $44 million compared to $30 million. Also, an important trend on the right you see in redemptions: the teams have worked really hard to make excess availability within the Avianca network available to LifeMiles. You see that 68% of the redemptions in the quarter were on Avianca, which does two things. One is obviously it lowers the cost of redemptions for us, which because if there's excess seats on Avianca, it certainly is the lowest cost redemption for us. But also by making available more redemption opportunities at attractive pricing levels, we get the engagement and the value proposition of LifeMiles to be improved. So a lot of work has gone into making that 61%-68% sort of redemptions on LifeMiles. If you go to the next slide now on slide 10 to talk about consolidated financial results, as Adrian mentioned, we were at $358 million EBITDA for the quarter at a 26.2% margin compared to 363 last year, which 363 million last year. In terms of net income, with $58 million versus $82 million a year ago, obviously the extra similar EBITDA with a slightly bigger operation, we have roughly about $20 million more of lease rent expense in the quarter. So we definitely need to generate at least $20 million more year-over-year in EBITDA to sort of be in line with last year in terms of covering the increased sort of fleet cost. So we're not quite where we were last year, but certainly the trend line is a lot better than 2Q and a lot closer to a year ago's trend line a year ago. With that, if I go to slide 11 and go to cash, you'll see that we ended the quarter at $1.122 billion, which was an increase of $194 million of total cash during the quarter. That does include $260 million of net new issuances. In particular, we issued a $200 million credit card receivables backed facility. We had sort of prepaid that a year ago, and we reissued that facility as well as we upsized LifeMiles by $100 million, the LifeMiles term loan B by $100 million. That was netted off by some prepayments on some other engine-based facilities. So it was a net issuance of $260 million. You'll note that this was done also by the end of the quarter. Early in the first week of October, we did pay $140 million to consummate the acquisition of Wamos. So this was before the Wamos acquisition. But overall, at the quarter, we ended at 1.22. You can see a couple points that I'd like to mention. The CAPEX number in the quarter is a little high because of timing. You see a little bit of CAPEX, especially wide body engine CAPEX, sort of got sort of delayed and moved into the third quarter. So there was both on the 787 Trent 1000 engines as well as some events on the I mean, these are all scheduled sort of maintenance overhauls on the Trent 700 engines on the freighters, on the A330 freighters, got squeezed into this quarter. But you'll see $42 million will be reimbursed through lesser contributions in subsequent periods. And then the third quarter, also in the working capital line, you'll see is seasonally the third quarter is a seasonal burn quarter. Even last year, you'll see that we had sort of a cash burn on the ATL. That's just a seasonality issue. So those are the key highlights on the cash page. And then if we move to slide 12 on debt, you can see we had net debt at the end of the quarter at $4 billion compared to $3.7 billion at the end of the last quarter. I mean, at $3.7 billion a year ago. Now, you can see that we are with the ASKs, we're a 17% larger airline. So while we've added $300 million of net debt, we're a 17% larger airline. However, since EBITDA has remained roughly flat, you'll see that our leverage has ticked up modestly. So we've gone from 3.3 times to 3.4 times. As we see EBITDA sort of go up, we would expect the leverage to start to tick down again. With that, I think that brings us to the end of the prepared remarks. Operator, if you can now begin the Q&A session, please. Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star one to ask a question. One moment, please, while we poll for questions. Your first question for today is from Mike Linenberg with Deutsche Bank. Oh, hey, good morning, everyone. All things considered, these are very strong results. I have a few here. Just on the Wamos acquisition, what is your stake from an economic perspective versus voting, since I know there are EU restrictions? And how are you running that through the P&L then? That's my first question. Let me take the stake question and then Rohit will explain the accounting analysis to you. On the stake side, and thanks, Mike, for the question. On the stake, we basically have 100% of the economics. There's a piece that's retained by management. It's an incentive program, etc. But it's basically 100%. There is a structure where basically we have a management plus some European stakeholders that effectively boast the majority of the board, and that allows us to be compliant with EU rules. It's frankly not inconsistent with the way some other major carriers currently, or major airline holding companies, if you will, hold their assets in Europe. And we believe it's completely compliant. So we're comfortable with it. With that, Rohit? Yes. And Mike, in terms of accounting, we'll finalize sort of the accounting in the fourth quarter, but we expect to fully consolidate Wamos results into Avianca Group International Limited in the fourth quarter. When I think about the size of that airline, I mean, you told us what you paid for it. We know the number of airplanes. The ACMI business has actually been quite profitable. Can you give us a sense of the margin uplift from consolidating this into your business, given that it is a profitable company? I mean, are we looking at a couple points of margin here? Maybe any rough sense of what the potential uplift is? I'd rather sort of wait until we sort of consolidate the results and talk about it in the fourth quarter. But directionally, it's definitely slightly accretive. But when you look at sort of the volume and overall, it's not going to materially move the needle, but it's marginally accretive. But on the margin, it's accretive. Okay, great. And then just my second question, this is more of a big picture. Just the headlines coming out of GOL and their restructuring, it does seem like that we're getting to the end of the road here, the end of the process. I know that you do some cooperative-type activity with GOL, but it's been pretty minor. I suspect that you're waiting for them to finalize the restructuring before you decide to do more interesting things, whether it's code-sharing, marketing, frequent flyer reciprocity. It does seem like there's a lot of opportunity. When should we anticipate that some of the more robust cooperative elements of Avianca and GOL? When do they roll out? Presumably, it's a 2025 event. What should we look for? What's the potential upside? Thanks for taking my questions. Yeah, I'll take that one, Mike. You read it exactly right, right? I think one of the challenges that we've been dealing with through the bankruptcy there is Abra Group's position as both a creditor but also a significant equity holder in GOL, and just making sure that there's no perception by any of the other stakeholders, right, that we're unduly influencing the company. So what we've been able to do so far with GOL is be supportive on a lot of things that you're not seeing behind the scenes, but that have been helpful to us in terms of, for example, purchasing of certain things, trying negotiations with certain suppliers and OEMs. The client-facing side started with a soft launch of reciprocity a couple of weeks back on the frequent flyer program. We're going to obviously significantly strengthen that going forward. And then as we look to integrate the networks more, you'll see more of that come on. You should start seeing more announcements around that very, very soon, right, as we now announce that we intend to kind of support, as Abra, as we intend to support GOL's plan of emergence. And we have the agreement from both the UCC and the independent committee of the board to do that. We think most of the people's sensibility around potential conflict there is starting to clear out. So you'll see a lot of that, more of that come through over the next few months and certainly, like you said, into 2025. Great. Thanks, Adrian. Thanks, Robert. Excellent. Your next question for today is from Chris Raedy with BNP. Chris, I think you're on mute. Hey, guys. Sorry about that. Appreciate your time. Thanks for telling me I was on mute. I didn't know at all. So with the quarter, you had a really good quarter. You're now starting to work on improving yields and cutting costs and continuing to cut costs. Could you give us a sense of the scope of the cost-saving initiatives still to come that you have cited on page four? Yes, sure. I'll take that question. Last year, we finished the big initiatives in terms of transformation of the company. And once that was over, we start looking on a line-by-line approach to where we still have opportunities within the company. That was essential this year to, on one hand, offset the inflationary pressure, but also, as you know, we're running on a lower stage length. So that long list of initiatives that I can tell you that there are over 150 were essential to ensure that at the end, we got to that 3.9. What do those initiatives cover? A wide range since airport negotiations, ground operations, IT, the way that we manage our IT costs. So the way that we look at efficiency in our front line, headcount per aircraft. So they're really across the board. Of course, some of the ones with the higher yield I've just mentioned, but they're really across the company. We believe that there's still a little bit more to come. We don't want to be overly optimistic, but we believe that we're already at a very good cost position, and we are pretty confident that we will continue, if not to improve, but to maintain a really competitive cost position in the region with all the future opportunities to come. And just to add to that, Chris, from my perspective, I think the really important thing that we're trying to do here is to build sort of a cost-focused culture. And so I think one of the great things Fred's done is to sort of make everyone accountable for the cost. So it's not really me as the CFO or the finance team sort of driving the cost. It's like we're more just the coordinator, and everyone in every group is sort of looking at what they can do to contribute to the overall mission. So I think that's really the important message here, and that's why there's lots of different line items that we're managing, and we expect this to be a continuous process, not a one-time process. You're totally right. You're totally right. Rohit, again, it was coordinated by finance, but I think the biggest change was a cultural change and a mindset that we believe that will continue and will really transform the way that our company and our people look at cost. Great. Thank you. The second question I have is, I guess it's around Bogotá and Colombia and then yields. So last quarter, the government opened up all the capacity. Everybody ran in. I guess people realized it was just very destructive for yields. Now you are moving some aircraft out to higher yielding areas. Could you give us a little bit of an insight into your strategy and the competition in Bogotá, and then how that sort of speaks to your yields in other geographies? And where are things performing better? Where are things performing worse? And how that will impact what we're looking at a quarter or two from now from a route structure? Sure. Chris, let me take a first stab at this, and then I'll ask Rohit to complement. This didn't happen last quarter, right? This happened in the middle of year-end, right? The biggest growth was into kind of December, etc., right, when the holiday season was announced and then kicked in. What you need to basically, the government allocated 15% more slots in Bogotá, right? That has a bunch of consequences, right? You can see Fred alluded to it when he was talking about operations. You can see that our OTP is still very good. It's not as outstanding as we'd like it to be because the airport gets more complicated. We think that the capacity that is allocated today in Bogotá is the highest capacity that has ever been allocated historically. And there's been no change to the airport. There's no additional infrastructure. There's no additional air traffic controllers or air traffic control strategy, right? And so you're seeing the consequences of that. So the reason I'm highlighting that is because this is, we think, it's more capacity than the airport can hold physically and still be reliable. But it's certainly the most that it's ever given, and I don't think there's a strategy from the government to give more. So when you think about the decision from the government to do that, and not just us, but our competition saying, "Hey, Bogotá, Colombia, was performing really, really well last year. It was an attractive market. All of a sudden, there's an additional allocation of slots." Those slots are valuable. They may not be valuable day one because it is very rapid growth into a market that is not consuming that. But ultimately, 15% growth is not something that takes 10 years to consume, right? It's something that takes one, two, three years to consume, right? So not just us, but our competitors basically said, "We're going to grab those slots. And if it's going to, and because they are usable or lose them, we're going to use those slots. And if that means we're going to overallocate capacity in Colombia for a while, so be it, because on the other side of it, we're going to have a very solid position in a market that has structural limitations for more capacity to come in. And at that point, it becomes very valuable." And so that sort of speaks to why the capacity went in, why everybody took up their slots instead of just saying, "You don't take them up," right? Then the question is, "Okay, well, how do you use slots and grow from 600 operations a day to 750 without taking a lot of additional planes?" Well, you do it by shortening stage length, which means you use the planes you have to fly shorter distances so that the plane can go and come back several times in a day and use several slot pairs. And that basically means you allocate a lot of your capacity into the domestic market. And that's what we did, and that's what a lot of our competitors did. Now, what has happened now, that is not a long-term strategy, right? That is a way to say, "We want our slots. We have the right to our slots. We're using our slots." Now is when you see us sort of start to say, "Okay, well, what do we do with those slots?" Right? That's where, as we take delivery of a few additional planes and we're able to sort of go back to where we would like to put the choosing where we put the capacity, but also going back to stage lengths that are more reasonable for our networks, you've seen those over 20 international routes that we've added. Those, in many cases, add spokes as well to Bogotá, which creates a nice virtual circle of creating more feed for flights going in other directions, etc. They make the network more robust, but they take a slot that is currently deployed in a place that has overcapacity and puts them into places that we think have better margins. But that also means that you are reducing the overcapacity. As you take a slot that you've directed into the Colombia market and you direct it internationally, you get two benefits, right? One, that aircraft that was in an overcapacity situation and it was hard to fill. It goes into a market where it's more attractive, it's easier to fill, etc. But also, you took capacity out of domestic Colombia where it's overallocated. And so the remaining aircraft in Colombia have increased demand for or are more aligned with demand, right, over time. And so there's a tipping point, right? We haven't reached it yet, but we think there's a tipping point where between the natural growth of the domestic Colombia market, between the reduced allocation of our capacity and hopefully our competitors' capacity to that excess supply market and into others, you get not only the benefit of the direct benefit of the redeployment, but also a more balanced supply-demand situation in domestic Colombia, which also benefits the capacity that you leave in that market. So that's what we're working towards. Our strategy is we believe we are the best carrier for Colombia. In Colombia, we offer the best network, the most frequencies, we think the best and most suited service, and a very, very cost-competitive and therefore price-competitive offer. And we intend to remain and retain that position. We think we are Colombia's airline. Internationally, we benefit from being the most important operator in one of Latin America's most important markets and from the geographic position that gives us to be able to build a robust international network that allows us to connect not just Colombia, but all of the Caribbean, South America, and Central America to North America and to Europe, and we continue to build on that. Oh, great. Thanks for that explanation. And then just with regard to different markets, are you seeing certain markets with more robust yield structures and others with, I guess, much worse ones? Yes, we are. And I've mentioned a couple already, but let me give you two examples. One is a positive trend. We're seeing a positive trend on North America markets. And when I say a positive trend, both North America to Central America and North America to South America. And in part, it's driven by the fact that we've seen several players, several U.S. carriers reducing capacity. And we've taken advantage of that. Some of them are reducing capacity in markets that we operated. And we believe that if it happens, it's because we do have a better cost structure than they have. And that has benefited us. So the first one is positive trend in North America. And then smaller markets, but with a positive result. I will tell you, for instance, that Mexico, Caribbean, and Ecuador, although they represent a smaller share of our network, but they've been performing pretty well this year. Okay, great. And so is really. But to complement Adrian's, it will take time for domestic Colombia to absorb the capacity, but we're seeing some smaller trends. For instance, you'll see that the capacity growth for the fourth quarter domestic Colombia will be significantly reduced compared to the third and the second. And moreover, we're also seeing that the number of passengers increasing, the number of our passengers in domestic Colombia increasing on a quarter-to-quarter basis. So again, it will take time, but we're seeing these smaller trends. Okay, great. Thank you for your time. I really appreciate it. Thank you. Thank you, Chris. Thank you. Thanks, Chris. Your next question for today is from Ken Monaghan with Amundi. Hey, Adrian. There's obviously a lot going on, but I didn't know if you could care to comment at all about thoughts still on an IPO having filed for Avianca itself. I recognize that since then, LATAM is not a transaction, but Mexico, when Mexico, our friends here in Mexico, delayed. Obviously, you're looking at the exit of GOL at the same time, but I didn't know if you wanted to update us on what your thoughts are because you're kind of reading tea leaves here on the market opportunity. Yeah. Look, I mean, because we have paperwork on file, we are limited in what we can comment. But the answer is we haven't changed in our strategy. We continue to believe that it is important for us to create liquidity for the complex to be able to raise equity. And as we see the markets turn and remain constructive, we continue to monitor them. You've seen a significant re-rating of the U.S. carriers, which for us is heartening, right? And you have not seen that in our region yet. We hope that when people start trying to figure out where there's value in the market today, right, with all of the movements in upward movements in the stock market, right, we think hopefully people will start looking in this direction. So we're monitoring it. Thanks. Once again, if there are any questions, please press star one. Your next question for today is from Michael Kaufman with Redwood Capital. Hey, everyone. Thank you for the time and congratulations on the quarter. A couple of housekeeping questions. The first one is on the CapEx side with the reimbursements that you show. Take this quarter, for example. It's $153 million, and $42 million expected to be reimbursed. Is the right way for us to think about that, that the $42 million is the reimbursed component is tied to upgauging or cabin refreshes as opposed to true maintenance CapEx, meaning like engine overhauls and C and D checks? So when we look at the aggregate CapEx number, we should take out the reimbursements, and that number is the way to think about maintenance CapEx? That's correct. So I think what you're speculating is correct. In the first year and a half after the emergence of Chapter 11, we had negotiated with a bunch of lessors to pay for the first engine event, but that was in that period. Now, you don't see any reimbursements for that. The reimbursements are tied to the cabin densification projects, and so that's what you see, and there's both the cabin densification as well as we have the three aircraft that we took, the three 787s that we took from Norwegian, which required a bunch of CapEx to get them sort of ready to fly, and some of that CapEx is reimbursable, so it's a combination of cabin densification plus the 787 CapEx that is reimbursable. But yes, that's how I would look at it. I think. Just to complement that, Michael, sorry, just to clarify one more thing, right? Because what both of you have said is correct, but there's one more piece of lumpiness that you need to be aware of, right? And the lumpiness is the narrow-body engine events are pretty smooth kind of through our operational cycle, and there's a lot of them, right? So averages sort of average out, right? The 787 engine costs we've got on a kind of fully loaded cash pay PBH. So you're seeing the cash go out, and you're seeing the expense accrue. And both of those things are pretty smooth, and they're kind of properly reflected, right? Where is their lumpiness? And some of it hits this quarter, which is why I think it's worth remarking on, right? There's some residual lumpiness in the 787 engines because of the way we changed the deal during Chapter 11. There were some payouts that we had to do to sort of move to the new deal when the first engine event happened. So you'll see some of that lumpiness happen because in our old deal, it was pay-as-you-shop visit. Now it's pay-as-you-go, right? So at that first shop visit, we're paying the pay-as-you-go, but when the first shop visit happens, we're also making up some of the last piece of the pay-as-you-shop visit, right? So we're paying the pay-as-you-go, but some residual piece of the old shop visit happens in that first one post the bankruptcy. And then the other piece is that the Trent 700s are still on a pay-as-you-shop visit kind of cycle. So when the A330 engine events happen, those are lumpy because they're big and because we don't have enough of them. Then you can say that they just sort of average out like the A320s do, right? So it's nuanced, but it's not unimportant because you actually see it in this quarter's cash flow. Sorry. I don't know if you disagree with anything I said there, but just okay. Thanks. No, no. I think you summarized it well. Yes. Okay. Thanks. Great. Thank you. That's very helpful. And so when we look at the full year number and we take out the reimbursement amount, should we use that as a proxy for I appreciate the lumpiness that you talked about, but is that a reasonably good proxy for go forward annual maintenance CapEx spend? I think so. Yes, it is, and like we did for this year, we'll give you more guidance of sort of this consolidated fixed payments, including lease payments, CapEx, and debt payments that will be still trending for the full year to the guidance I gave at the beginning of the year, but yes, I think there is a little bit of lumpiness, but you will see a little bit of that on an annual basis still there, so I think if you look at the annual numbers this year and you sort of use that as a proxy for going forward, it'll be pretty close. Great, and then the second question I had is. Excluding the last. Sorry, what did you say, Rohit? If you look at annual spend and you back out the lessor reimbursements, that would be a good proxy for what you would expect going forward CAPEX to be. Great. Thank you. And the second question I had is, I want to go back to some of the yield differences that you're seeing across geography. If you can comment directionally outside of the domestic Colombia market, were yields up or down? And if you have any comments on market by market, that'd be helpful. I can give you an overview. So on a year-by-year basis, I've mentioned that, for instance, Caribbean, Mexico, Ecuador, we had a pretty good performance on year versus year. We have other markets that are negative, as we discussed Colombia. And then I will tell you that North America positive, as I mentioned, and some other markets that have remained more or less stable. I will tell you that also a little bit on the negative side, we have South America to South America. And that's that overall. Again, if I have to summarize, I'll tell you positive, we've seen North America, Caribbean, and Mexico and Ecuador. Negative, we've seen domestic Colombia being the most. And then we've seen also negative South America to South America and Central America to South America as well as negative. That's kind of high level. Great. Thank you. And in that intra-South America or Central America to South America market, which I think is a big chunk of the, correct me if I'm wrong, but I think that's a material part of the capacity, how do you see that yield trending over the next couple of quarters based on the visibility you have? Is that supply-demand improving or yeah? I think it changes a lot from country to country. It's not the largest chunk of our network. It represents about 15% of our network, give or take, right? And it's been very different from a country-to-country basis. We've seen, as Adrian was mentioning in the beginning, the fact of adding more spokes gives us also a better connectivity through our hub and more options to connect passengers from South America to Bogotá and then Caribbean, Europe, or North America. So I'll give you a couple of ballpark figures. We have markets that continue to behave very, very strong, like Argentina or Brazil, right? Other markets that we've seen, Santiago, yes, you're right, Rohit. So yes, good point, Rohit. So Chile that we've seen a drop on a year-on-year basis, right? Another market that we've seen that is South America to Central America that we've seen a drop is from Ecuador to Central America. So it's a mix. But I'll tell you that we've seen the 80/20 is some really good performance on Brazil, on Argentina, some drop in Chile. Very good. Thank you very much. We have reached the end of the question and answer session, and I will now turn the call over to Adrian for closing remarks. Thank you, everyone, for joining us again. Thank you for the time you spend thinking about us, analyzing us, investing in us, trusting you with your money and with your investment. We're much happier with this quarter than we were with last quarter. Obviously, some work still to get back to the margins that we want, but as we told you, we have a bunch of initiatives that are working on that. I don't want to finish this call without highlighting the massive contribution that Rohit has been to us. We asked him over three years ago to agree to commit three years of his professional career to us. He's committed significantly more than that. It's an emotional and physical challenge, obviously, with a lot of travel, etc. And so as he begins this orderly transition that he's leading, and as we go into this role, you'll continue to see and hear from Rohit, and he will be around to help us through this for the next few months. But we could not be where we are without him, and we're tremendously grateful for the effort and thought leadership that he's brought to us over the last few years. So I did not want to end today's call without pointing that out. So with that, we hope to see you again. Sorry, go ahead, Fred. No, I was just saying to Adrian on my side, I would like to make your words mine as well in the name of Avianca. A big thanks to Rohit. He will not go away right now. He will stay with us a couple of months, but yes, just to reinforce your words. And Rohit, a big thank you. A lot of this wouldn't be possible if you were not around. And thank you, Adrian and Fred, for the kind words. I obviously, it's been an extremely fulfilling part of my professional career to be part of this part of this journey with the team here. It's been an incredible sort of ride. If I think about when we started some years ago and where we've come, and I think there's a very sort of solid path now going forward. So I feel very proud of the work I've been able to do with the team. But I also feel very good about leaving a very solid finance team and a very good successor with Nico taking over. I think we'll have a seamless transition, and I've committed to Adrian and the team to be around several months to help make sure the transition goes smoothly. So with that, thank you, and thank you all to all of you on the call for all your support with the business. So thank you. Thank you all, and we'll see you again in a few months to go over this quarter's results. Thanks again. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.