Good morning, everyone. Thank you for standing by. Welcome to Volaris second quarter 2022 financial results conference call. All lines are in listen-only mode. Following the company's presentation, we will open the call for your questions and answers. Please note that we are recording this event. This event is also being broadcast live via webcast, and may be accessed through the Volaris website. Those following the presentation via the webcast may post their questions on the platform, and they will be either answered by the management during this call or by the Volaris investor relations team after the conference is finished. To send your questions via the webcast platform, you need to click on the question mark just below the video area in the upper left corner and type in your inquiry. At this point, I would like to turn the call over to Renato Salomone, Volaris' Senior Director, Corporate Finance & Investor Relations. Please go ahead, Renato. Good morning, everyone, and thank you for joining the call. With us is our President and CEO, Enrique Beltranena, our Executive Vice President, Holger Blankenstein, and our Chief Financial Officer, Jaime Pous. They will be discussing the company's second quarter 2022 results. Afterward, we will move on to your questions. Please note that this call is for investors and analysts only. Before we begin, please let me 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's actual results to differ materially from expectations as described in the company's filings with the U.S. SEC and Mexico CNBV. These statements speak only as to the date that they were made, and Volaris undertakes no obligation to update or revise any forward-looking statement. As in our earnings press release, all our numbers are in U.S. dollars and compared to the second quarter of 2021, unless otherwise noted. With that, I'll turn the call over to Enrique. Thank you very much, Renato, and thank you everyone for joining us today. The second quarter was again a very challenging one. The impact from exogenous forces and rapidly increasing fuel costs and other inflationary pressures were high. As a result, we prioritized our efforts on costs we could control. We were successful since CASM ex-fuel reported for this quarter closed at $0.042, which is below the first quarter 2022 level. The company created more than 2,000 new jobs in the last 18 months to execute our strategy to fill the void left by some of our competitors. Volaris today is fully operating its 113 aircraft at our industry-leading utilization rates and flying more than 80 hours per month per crew, all while delivering high schedule reliability and on-time performance. We were prepared for this growth. As a result, we have not incurred additional costs from overtime or premium pay for our people. This is a tribute to our operation and recruiting areas that planned and executed this strategy. Having said that, the company today remains at a ratio of 59 full-time equivalents per aircraft. Fuel price impact in the quarter was an incremental cost of $150 million versus second quarter 2019 or $185 million versus the same period of 2021. Offsetting the hit from this highest economic fuel price was quite a challenge. Nevertheless, the company did pass through $160 million or 75% of this impact to the customers versus 2019. Our average revenue passenger was $93, 21% higher than 2019, and up from $81 in the first quarter of 2022. Our remarkable performance in 2021 proved to be a difficult basis for comparison when we were the fastest-recovering and best-performing publicly listed airline in the world. In 2021, the demand for travel in Mexico began to recover in March, well ahead of the other geographic regions. Mexico led the global air travel rebound. This strong recovery drove out of the ordinary volume that allowed us to post a very strong TRASM. Volaris also benefited in the second quarter of 2021 from vacation travel from Mexico to the U.S. These trends led to a 36% growth of our EBITDAR during the first half of 2021 compared to 2019. Second quarter EBITDAR was $107 million, down 54% year-over-year, pressured by the high fuel prices. To illustrate the company's efforts at cost control and revenue management during this recent quarter, assuming an economic fuel price equal to the second quarter 2021, Volaris will have produced an EBITDAR of $292 million or 42% margin. During the second quarter, Volaris filled up its additional capacity, reported double-digit revenue, and our load factor closed at 85.6%. TRASM was at record levels for a second quarter at 8.26 cents. During the second quarter, total revenue was $691 million, an increase of 20% compared to the same period of 2021, and 59% versus 2019. During the quarter, we experienced several reactions from our airports to pass through fuel prices. On U.S. routes, passengers absorbed higher prices at a slightly lower load factor. On our exclusive routes, competed only with the buses, which account for 46% of our routes, we were also able to price more aggressively with little impact on volumes. Finally, Central America's demand is coming back very strongly. Holger will dive deeper into this, but I want to emphasize that despite passing through much of our higher fuel costs, we have seen strong demand and no pullback, thus demonstrating the VFR market resilience. For the second half of 2022, we'll be more sensitive to stimulating low fares on our trunk routes while pushing for pass-through in markets that are sustaining volumes at higher prices. We will leverage our market leadership positions in Tijuana, Guadalajara, and Cancun. The key reasons behind our strong performance since the beginning of the pandemic and success story haven't changed. First, Volaris has demonstrated its ability to adapt to changing environment, meeting the growing demand while gradually passing through the impact of the rise in fuel prices. Second, despite the pressures caused by the increase in fuel prices, Volaris has plenty of market opportunities, both at home and abroad. Volaris' strength continues with our VFR customers who value our schedule reliability and our leisure customers attracted to our many point-to-point leisure destinations. Third, our growth plans remain flexible. Our mission remains to create long-term value for our shareholders. Fourth, our ultra-low cost and strong balance sheet allow us to absorb volatility better than our competitors and position Volaris well for the future. Speaking about market opportunities, throughout this quarter, we took a bold step in our strategy to stimulate air travel demand in the Mexico City metropolitan area by returning to Toluca Airport and inaugurating new routes at the Felipe Ángeles Airport. At both of these airports, newly negotiated low-cost airport contracts will expand our capacity to service the roughly 30 million people who live in the Mexico City metropolitan area. We also opened new routes in Central America and increased the number of flights within and to and from the region. The U.S. market also saw demand higher than pre-COVID-19 levels. However, our growth has been limited in this market due to Mexico's Category 2 rating, which disappointingly did not progress in the last FAA audit of our aviation authority. For the second half of the year, we still have space for 2 additional aircraft to operate from Mexico to the US. In the medium term, we are adjusting our network growth plans to the US given the recent Cat Two results. Long-term growth opportunities are not in jeopardy. Volaris has more than 300 potential new routes not yet serviced. In turbulent times, one of the most important functions must be focused on strengthening the balance sheet. Volaris took several important achievements during the quarter. We generated positive cash flow. We firmed up financing for our fleet growth through the end of 2025 through sale and leasebacks and PDP financing of more than $500 million. We finished the quarter with net debt to EBITDA ratio of 2.9x with no refinancing risk in the foreseeable future. We have more favorable financing conditions compared to our Latin American peers and have not taken on the debt incurred by our North American competitors. Volaris achieved terms and conditions for a spare part pool contract, which provides the company a 10-year deal at a lower cost than our previous contract despite inflationary pressures. This is an important part of the effective cost control measures we implemented to offset inflationary pressures and commodity incremental costs. We have grown quickly over the last two years to fill the void left by some of our competitors, and we have now met these objectives. Therefore, we will return to a measured growth rate in the upcoming years, most likely moderating our capacity growth rate to a single-digit level in 2023. Our focus is to achieve a healthy balance between growth and profitability, maintaining a strong balance sheet and our competitive cost advantage. Now, I'd like to hand it over to Holger, who will talk more about our quarterly operating results and cover our mitigation strategy for rising fuel costs. Thank you, Enrique. I would like to provide some more color on our quarterly operational results. On the revenue side, as Enrique pointed out, demand remains strong in both our domestic and international markets, accommodating increases in fares as we sought to mitigate the impact of fuel costs that rose throughout the quarter. Fuel costs were $26 per passenger higher than in the same period of 2021. Our loads continued to demonstrate sustained strength in VFR and leisure travel. Although close-in bookings moderated slightly in June, likely in part reflecting the fifth wave of the pandemic in our markets. Nonetheless, overall strong traffic and higher fares resulted in strong TRASM performance. Throughout the quarter, we reported a healthy traffic performance, both in April, with loads slightly better than in 2021, and in May, with bookings improving sequentially and falling in line with the strong 2021 performance. In June, close-in bookings contracted slightly as we attempted to accelerate fare increases. We expect that concerns of an upcoming downturn in the global economy may newly constrain travel decisions, and we will carefully monitor booking trends to set fares as we manage elevated jet fuel prices. Keep in mind that we faced a difficult comparison basis from the second quarter of 2021, as Enrique described. To that point, the surge in fuel prices during the second quarter was ultimately too high to offset by passing the costs on to passengers without impairing demand. We were able to recoup significantly less of our fuel costs this quarter than in the recent quarters. As economic fuel price we paid soared to $4.40, up more than 105% year-on-year and exceeding the highest levels in the company's history for the entirety of the quarter. We see these elevated fuel prices as transitory, and while we do not have a line of sight on potential relief, we are focused on stimulating demands for our routes. We will continue to push fares, but not to the detriment of our long-term strategy of demand creation. One last note on the impact of fuel. NEOs already account for 50% of our fleet, and these models are up to 15% more fuel efficient, helping us offset fuel cost pressure. We have a unique network that is flexible to add or reduce capacity. We have 46% of routes without air competition and leadership positions in key Mexican cities. That gives us more resilience on pricing than some of our competitors, but we still need to remain competitive versus the buses. We attribute our continued stable performance this quarter to our unique position of taking advantage of the bus switching momentum while expanding our capacity to serve this market. While we are cautious about economic pressures heading into the second half of the year, both leisure and VFR markets have continued to show strength. Volaris, as a reminder, has very little business traffic. Therefore, we are still able to maintain demand and fare increases, especially in international market, despite elevated fuel costs. Speaking about capacity, our ASMs rose by 4% from the first quarter, or by 19% versus the second quarter of 2021. Turning to our geographic breakdown, the second quarter domestic network, representing 70% of ASMs, grew by 17% year-over-year. While most of this growth continued to be on existing routes out of Mexico City International Airport, due to the government-led reduction in capacity, we have reassigned 4 out of our 40 aircraft there, 2 each to Toluca and Felipe Ángeles airports. International capacity grew by 25% year-over-year, with the greatest contribution coming from the Mexico to U.S. market, where we also saw healthy growth despite the vaccine-related surge in travel to the U.S. last summer. We also grew in Central and South America, where we have initiated several interregional routes where we are the only low-cost carrier. We finished the quarter with five aircraft domiciled in our Central American operating certificates. Ancillary revenues continue to be a large part of our overall revenue mix. These consist mainly of baggage, seat selection, and bundles, like the Flexibility Combo. We also further drove growth in ancillary revenues this year by adding members to our discount programs and expanding the number of co-branded credit card members. 40% of our overall revenues were from ancillaries for the quarter, and we reported ancillary revenues of $37 per passenger. We remain committed to our medium-term target of 50% of revenues from ancillaries. We are also focusing on increasing our intra-Mexico flight options and undertaking a plan to increase and better balance our flights in the Mexico City area. To this end. In addition to our flights from Mexico City International Airport, we have opened flights in Toluca as well as the Felipe Ángeles Airport, becoming the first airline to operate at all three airports that service the Mexico City Valley. The decision to operate from all the airports of Metro Mexico City was made considering the current context. The Mexico City International Airport is saturated, and there will be little growth opportunities in the future as pre-pandemic capacity has been backfilled. Additionally, we reached a highly favorable cost agreement with the administrators of Toluca Airport, which in addition to being the station where Volaris started operations in 2006, will also now help us keep our costs low for travelers going to and from Mexico City. Moving some of our flights to Felipe Ángeles Airport will also help us keep prices down. Toluca and Felipe Ángeles are cheaper for Volaris and our customers compared to Mexico City International Airport. This is in line with our customer segment and the ULCC business model of offering point-to-point flights. All of this equates to an exciting opportunity for increased customer demand for our routes as there are significant room to grow at both secondary airports in the years to come and at the right operating cost levels for the Volaris business model. These additions, however, do not mean that we are abandoning Mexico City International Airport. We will continue to offer the same routes to and from this airport, but at slightly reduced frequencies, which will allow us to provide flight service to the other airports. Overall, we will increase our total seat offering by 1 million seats per year in the Mexico City metropolitan area with better frequencies and schedule reliability, serving the most important market in Mexico, a region with approximately 30 million inhabitants. Moving on to fleet, we ended the second quarter with 113 aircraft. For the same period last year, Volaris had 92 aircraft, making for a 23% fleet growth. We maintained high aircraft utilization during the quarter with 13.2 hours per day for our productive fleet. Importantly, Volaris has one of the highest utilizations globally when measured against other airlines with similar aircraft types and business models. Again, even though ASM growth remains strong at 20%, we continue to stimulate demand and maintained healthy load factors. We constantly monitor and adjust capacity based on market dynamics. In May, we decided to cancel 9 underperforming routes effective July 31st. Looking ahead to the third quarter and the second half of the year, summer travel and the ongoing demand in VFR and leisure should help drive traffic performance, particularly in the international markets. While our international capacity growth is constrained by Category 2, we still have levers available to improve our current U.S. capacity, including increasing frequencies and deploying 2 additional aircraft that we are still allowed under the FAA's limit. Our presence remains strong in the U.S. as we are the third-largest non-U.S. operator in the L.A. and Chicago markets. Additionally, we will continue to seek expansion in Central and South America, where we are currently under-penetrated, especially as middle classes emerge there similar to Mexico. We are introducing the ultra-low-cost low-fare model to many of those markets. Furthermore, for the second half of 2022, we are closely monitoring 2%-3% of our capacity. Should fuel cost pressures remain for the third quarter 2022, we have a contingency plan in place to reduce capacity by up to 5% during the traditionally lean months of September and October to protect our profitability. We grew quickly since the pandemic to build our position in Mexico. Now, we have met our objectives, and we will return to our historic growth rate. Looking ahead at 2023, we are planning a single-digit ASM growth versus 2022. This number will of course be dependent on Airbus delivery schedules. Volaris currently operates at all but 9 of the 45 commercial airports in Mexico, and we see promise for increasing our 98 daily flights from Guadalajara and our 95 daily flights from Tijuana, markets with metro populations of 5.3 and 2 million respectively. Our priority for network growth is to deepen frequencies on existing routes. In the last decade, Volaris has cheaply, efficiently, and safely flown over 10 million first-time domestic flyers, and we expect that the new passengers we reach will join them in switching from the bus once experiencing the advantages Volaris offers. Over the next 5 years, the 4 main pillars of Volaris investment thesis that Enrique mentioned earlier still stand. We will continue to benefit from organic GDP growth, population growth, a large and growing middle class in Mexico, and the continued switch from long-haul bus to air travel, an exciting story that we will continue to capitalize upon. I will now turn the call over to Jaime to discuss our financial performance for the quarter. Thanks, Holger. Now I would like to discuss our second quarter 2022 financial results. As detailed by Enrique, total operating revenues for the second quarter were $691 million, a 20% increase compared to 2021 due to higher capacity, healthy load factors, and a solid unit revenue. CASM ex-fuel decreased 1% compared to the same period of 2021, closing at 4.2 cents due to our discipline and efficient cost control and higher aircraft utilization, which offset inflationary pressures. It is important to reiterate that we operate with one of the lowest CASM ex-fuel levels in the world, which allow us to remain confident in our strategies in the face of high fuel prices and an inflationary environment. During the quarter, we booked sale and leaseback gains for a total amount of $12.8 million and redelivery accruals of $25 million. Higher fuel costs drove total CASM to 8.5 cents for the second quarter, a 35% increase compared to the second quarter of 2021. The average economic fuel cost increased by 107% to $4.4 per gallon in the second quarter. All of Volaris' ambassadors receiving the second quarter, a well-deserved and meaningful profit share payout due to the last year's performance. We thank them for their commitment and excellent work. In this environment of high fuel prices, we believe that the renewal of our fleet with neo aircraft and high-density seating strategy is an effective hedge against rising fuel prices, meaning that our fares need to move up less than our competitors. Equally important, they are key elements of our 2030 goal of reducing carbon emissions over revenue passenger kilometers by 35.4% compared with 2015. Net loss was $49 million in the second quarter, which translates into a loss per share of $0.04 and a loss per ADS of $0.42. Higher fuel costs cause a contraction in our EBITDA margin. EBITDA decreased 54% to $107 million, and the EBITDA margin diminished by 25.3 percentage points to 15.5%. Net cash flow generated by operating and investing activities in the second quarter were $158 million and $30 million, respectively. The cash flow used in financing activities was $183 million. Volaris delivered cash generation of $9 million for the second quarter, closing with $759 million in cash and cash equivalents, representing 30% of the last twelve months operating revenue. Volaris has one of the most robust balance sheets among Latin American carriers and our global peers. At the end of the second quarter, our net debt to EBITDA ratio was 2.9x, compared to 4.5x in the same period of 2021, and 2.3x in the first quarter of 2022. Around 93% of our total debt is made up of leasing liabilities, and we do not have the refinancing pressure that many of our peers globally will face in the upcoming years. Equally important, we have signed sale and leaseback agreements for all the aircraft deliveries from our book orders with Airbus through the end of 2025 and have financed predelivery payments of more than $500 million for that period on competitive conditions. We incorporated 9 new A320 neo aircraft in our fleet during the second quarter. As of June 30, Volaris' fleet was composed of 113 aircraft with an average age of 5.4 years. Volaris' fleet had an average of 190 seats per aircraft. 84% of its aircraft are Sharklet equipped, and 50% are new engine option or neo models. We expect to end 2022 with approximately 115 aircraft, depending on Airbus delivery schedule compliance, which will increase the neos to 54% of our fleet. This includes the redelivery of 2 A319ceos in the month of September. Despite the global macroeconomic and geopolitical challenges, demand remains robust throughout the network. Given a higher than expected increase in fuel prices compared to our prior forecast, we are updating our full-year 2022 guidance. We are adjusting downward capacity guidance in terms of ASMs from mid-20s% to a range of 23%-25% compared to 2021. We hold our revenue guidance in the range of $2.8-$3 billion. We continue to expect a full-year CASM ex-fuel to increase between 1%-3% compared to 2021. We are updating our EBITDA margin guidance from the high 20s% to the low 20s%, fully explained by the higher average fuel price. Finally, we confirm our CapEx outlook in the range of $140 million-$145 million. Our outlook assumes a full-year average exchange rate between 20.5-20.7 MXN per dollar and an average economic fuel price between $3.7-$3.9 per gallon. Also, it assumes no significant unexpected disruptions related to COVID, macroeconomic factors, or other negative impacts on our business. For the third quarter, we are budgeting an exchange rate of 20.1-20.2 MXN per dollar and an economic fuel price of $3.8-$3.9 per gallon for the quarter. Therefore, we expect an EBITDA margin in the range of 19%-21%. We are returning to a balance of growth and profitability with focus on maintaining a strong balance sheet. We will continue to execute a disciplined growth strategy with the flexibility to adapt to macroeconomic volatility brought by geopolitical events, relying on our ultra-low-cost model. Now, I will turn the call over to Enrique for closing remarks. Thank you very much, Jaime. Our mission remains to create long-term value for our shareholders. We have a resilient and effective ultra-low-cost business model with CASM ex fuel under control, a solid operational performance, a strong balance sheet with healthy leverage, and most importantly, the commitment of an experienced management team to navigate our airline through this challenging environment. Finally, we invite you to read our 2021 integrated annual report detailing our ESG progress and commitments. The report is available on our investor relations website. Thank you very much for listening. Operator, please open the line for questions. Thank you. The floor is now open for questions. If you have a question, please press star then one on your touch-tone phone at this time or at any time. If at any point your question is answered, you may remove yourself from the queue by pressing the star key followed by two. Questions will be taken in the order they were received. We ask that when you pose your question, that you pick up your handset to provide optimum sound quality. Participants can also send questions via the webcast platform. You need to click on the question mark just below the video area in the upper left corner and type in your question. Please hold while we poll the questions. Our first question will come from Stephen Trent from Citi. You may now go ahead. Good morning, gentlemen, and thanks very much for the time. Just one or two quick ones for me. The first, I think you mentioned you are servicing, I think you said all but 9 of 45 commercial airports in Mexico. When you think about the ones you're not servicing, you know, are the main issues regarding exorbitant landing fees or just, you know, maybe the routes don't make sense at the moment? Just curious about that. Stephen, yeah, those are smaller airports and smaller markets that we have prioritized for later in time. Right now they are not that attractive for us. Great. Speaking about the other issues, Steve, good morning, and thanks for the questions. I think the Category 2 is probably one of the things that concerns us, and we are working very strongly to try to support our authorities. I think that's something really important. Other than that, we don't have any major issues. Great. Thank you, Enrique and Holger. Just super quickly, I'd love to hear on a high level, you know, what sort of body language you're seeing from, you know, your domestic competitors on pricing and capacity deployment. That's it for me. Thanks, guys. Well, the pricing environment has still been quite healthy throughout the year. We are seeing discipline from most of our competitors. Growth and capacity have been focused on the Mexico City metropolitan area with Aeroméxico and Viva also growing in these markets. We have taken the approach to diversify our presence in the market by growing at two new airports in the Mexico City metropolitan area. Okay, let me leave it there. Many thanks, guys. Thank you, Stephen. Thank you. Our next question will come from Duane Pfennigwerth with Evercore ISI. You may now go ahead. Hey, guys. Good morning. How are you? Very good, Duane. Thank you very much. Morning, Duane. Just on the single-digit% growth in 2023, you know, the growth rate was gonna come down next year. I think, you know, the company was kind of messaging low teens%. Just in terms of the difference, what is the driver? Is it delivery rates? In other words, would that single digits be low double digits if you could get more planes or if your confidence in getting those planes was higher? Is it the shift in the Category 2 timing, or is it something else? No, I think the company, I mean, during the last two years, Duane, we have been filling the hole that the reduction of capacity of some of the competitors had during this couple of years. That's why our growth last year was 29% ASM. We are guiding a growth of 23%-25% for this year. Something which is really important is we are concerned about the capacity that is in place. We are concerned about the cap, too, that capacity might be forced to stay in Mexico and might produce a little bit of a pricing pressure. We are absolutely being, I would say, conservative in our growth. Having said that, I want to remind everybody, I mean, when we had this issue during the pandemic, and we decided to freeze the fleet at 86 aircraft back then, and then we grew up from 87 aircraft to 100 aircraft very fast. This company has the possibility of growing or shrinking in a very, very flexible way, and that's one of the beauties of our model. Okay. I don't wanna put words in your mouth. I don't wanna lead the witness, but is it fair to say that you feel like the margin outcomes in 2023 will be higher with a single-digit% growth rate relative to a, you know, a mid-teens% growth rate? That you need to sort of let some of this capacity growth mature? Hello? No, Duane, I don't see that happening. Could you clarify the question please, Duane? Yeah, I guess the simple answer, one answer to the question I'm asking is, you know, we feel like our margins will be higher in a scenario where we slow down our growth rate, right? I think investors appreciate all the growth opportunities that Volaris has. I don't think that's the issue. I think the concern has been the rate of capacity growth while you're posting margin degradation. You know, is this lower growth rate a function of margin focus or just, you know, delivery rates or something else? Duane, basically what we are doing is now, after we have a really high growth over the past two years, we are gonna balance growth with profitability. The way to go, that's what we are signaling, a single-digit growth next year because we are taking that approach. Obviously, if we see a strong demand, we can increase growth rates very fast. Next year we have six deliveries of aircraft we could extend if the demand is there. We don't see it right now, so we plan to return them. That's basically the game plan that we are looking for next year. Yep. Okay. I would add to Jaime's response, Duane, that our scheduled delivery with Airbus has been pretty good. We're expecting probably a 2-month delay on A320s and 4 months delay on A321s, but that's it. I mean, it's not driven by the fact that we're seeing a problem with deliveries with Airbus. When we programmed the deliveries, we included these delays in our schedule and the way Holger was scheduling the aircraft. So it has nothing to do with that. It's mostly driven by where we see the capacity in the domestic market, where we see inflation, where we see demand contraction, if something really happens. We keep our flexibility in the back of our minds. Okay. That's good. Then, look, you touched on operational performance, but it's probably worth repeating. Have you... Can you just replay, you know, your completion factors and your on-time performance? How has that trended over the course of the second quarter? Are there any airports, you know, in the U.S. or otherwise where you're seeing staffing constraints impact your reliability? Duane, we have not seen the operational issues that many international airlines in the U.S. and Europe are facing. Our on-time performance has been on target and our schedule completion as well. The labor shortage issues regarding pilots and ground staff has not been a major factor here in Mexico, nor in our U.S. operations. We didn't have any delays in the U.S. operation driven by staffing constraints in the airports. Okay. Very good. Thank you. Our next question will come from Helane Becker with Cowen. You may now go ahead. Thanks very much, operator. Hi, everybody, and thank you very much for the time. Just a couple of questions from me. My first question is with respect to the strong traffic, the fares and TRASM. Do you think that demand relative to your will continue, and how are you going to maintain your high load factors in an environment where customers may push back against that? Let me elaborate a little bit on the fare environment and the passthrough. Lately, in June, I would say the last half of June, we've seen some more difficulties to raise fares in some of our trunk routes. We see that we're reaching a ceiling of the passthrough in some of our main trunk routes here in Mexico. However, in exclusive routes, in US routes and in Central America, those markets are absorbing those fare increases much better. Also, we have to note that we are seeing robustness in advance purchase behavior that we did not see in 2021 for the second half of the year. The booking curves for the rest of the months of 2022 are ahead of 2021 levels, as of today. That indicates to us that the demand continues to be quite strong. We are happy to see more advanced bookings than we saw in 2021. I think. Okay. That's really helpful. I think Holger's response is perfect. Helane, I think you guys need probably to think a little bit of what's going on here. We analyzed our second quarter of last year, and obviously the summer of last year, we lived what you guys are living in the U.S., in Mexico, okay? We already did that ramp-up of, I mean, in general fares and ancillaries during the second and third quarter of last year. Then our TRASM despite it has been high because of the pass-through of the fares, but it's not having that phenomena that you guys are living in the U.S. We feel that our market in Mexico is now much more stabilized. It's a year later than what you are living in the U.S. and the concerns that you are having in the U.S. in the domestic market. We are seeing our transborder traffic kind of healthy and stable, but not with those huge incremental fares that you have all over the place in the international markets from the U.S. and outside of the U.S. Okay. All right. That is hugely helpful. Thank you. Then my other question is with respect to operating at the three Mexican Mexico City airports, rather. I get the reason, and I think Holger, you were talking about the fact that they're less expensive to operate than Mexico City is at Toluca and Felipe Ángeles. Like what's the catchment area, and when people fly into those two airports, where are they going? And what does it cost to get from those two airports to, like, the center of Mexico City? Is the savings on the airfare kind of offset by higher ground transportation costs, or is it just that they're less expensive to operate and the ground is the same? Do you know? I mean, I might be saying that not really well, but that's kind of my question. Yes, yes. I understand your question, Helane. The nice thing about Yeah. The Mexico City metro area is that it's a very large market. It has 30 million inhabitants in total, very similar to big metropolitan areas around the world. We have three distinct catchment areas for the three airports. Toluca, the city west of Mexico City with a large population in itself, and Toluca captures the market of the western part of Mexico City. That's one. Then we have Felipe Ángeles in the north of Mexico City, with some large cities around that area as well, with about 5-6 million inhabitants living closer to Felipe Ángeles than to Mexico City International Airport. Then we have the large Mexico City International Airport that serves as more the center of Mexico City. It's very comparable to other metro areas around the world, with three airports servicing distinct catchment areas. That's great. Thanks, Holger. Okay, team. Thank you for your help. I think, Helane, yes. I mean, the problem we are having is people are still thinking about those secondary airports like they would be a replacement of AICM. In our minds, those two airports are complementary to the main airport. I think the most important thing of the whole strategy, Helane, is for the last 10 years, when we basically left Toluca, and the government made it impossible to operate Toluca because we couldn't afford the costs of that airport, okay? The beauty of now that that's going on now is, yes, since 2014, Mexico City has been basically capped, and our possibility of growing in the metropolitan area was basically impossible because of those costs. Now that we have negotiated those lower costs in those airports and dramatic reductions on TUA and dramatic reductions on costs, it allows Volaris to play its strategy of growing in this 30 million inhabitant population, but we're not playing around moving people from very far away from those airports. We are playing around the catchment areas, which is what Holger explained, and that's probably the most important thing to understand. Guys, when we compare the number of operations that we have in Guadalajara for a market which is about 8 million inhabitants around Guadalajara, 8 million inhabitants, and we have 100 operations per day. When we compare 2.8 million inhabitants around Tijuana, and we have almost 100 operations there. When we compare it versus Mexico and the metropolitan area operations that we have, we only have 200 flights for a 30 million inhabitant population. We think we can multiply our structure around the metropolitan area in 4-5 times and still be profitable and viable with segments that are VFR segments, which are really important for us. That's really helpful. Thanks, Enrique. Our next question will come from Josh Milberg with Morgan Stanley. You may now go ahead. Hey, everyone. Thank you very much for the call. My first question is just a clarification on the situation with the Mexico City airports. You all commented at length, but I understood that with the favorable airport agreements and, you know, that you are, you know, expecting to be able to significantly expand your seat offering there, but I was interested in hearing about how, you know, the situation there is gonna affect your near-term capacity levels in that market in Mexico City. Just because I think not so long ago you were contemplating the possibility of needing to scale back on a near-term basis. I just wanted to clarify that. You know, you're not just talking about the longer term, you're also talking about near term, no impact on capacity in Mexico City. Let me go from broad to a specific, okay? In the last two years, Josh, we did build our position at AICM because of Interjet's disappearance. Now we have met our objective, okay? The airport is again, after the pandemic, very saturated. That's the first thing, okay. The second thing is, I strongly need to remind you guys that we are an ultra-low cost carrier. Typically, the ultra-low cost carriers do not operate from main hub airports, since these airports tend to become very high cost and high fare. I think what is going to happen in Mexico City because of the saturation going forward, it's going to be like a boutique airport, okay? It's going to be very expensive. That's not the traffic from Volaris, okay? Having said that, the secondary airports in Mexico are in a very early moment, okay? Volaris thinks that saturation at AICM is real, and our main concern within that saturation also is about safety, okay. Volaris thinks that we need to maintain a decent number of operations at AICM since it is the most important traffic airport today, provided that we make profits and that we do not jeopardize safety. Volaris is working with airport, demanding the application of IATA Worldwide Airport Slot Guidelines, the WASG set of rules for slot allocation and best practices to achieve transparency and certainty for all players. Again, we will not jeopardize safety. The proximate population around this Toluca Airport has been mentioned, and our ability to serve this population was limited by focusing only in Mexico City. Now we can do it differently, okay? That's pretty much what we're planning. Having said that, it is very important to tell everybody we will not be reducing further capacity from where we are at the end of September fifteenth, which is the second re-reduction. We have a 10% reduction in August and a 10% in September. We are planning to stay there and have the right participation, but taking care about safety, which is probably one of the most important things. Guys, we cannot lose safety from our side, and one of the most important things that the investors of this company have are relying on me, is that I take care about safety, and I will not jeopardize that. Okay. That's great, Enrique. Thanks for that clarification. Very helpful. Then my second question was on the Category 2 issue. You just talked about the lack of progress with the FAA, and how we could expect things to evolve from here. In June, the FAA conducted a technical revision, which was part of the steps that we had to go through in the process of recovering. Obviously, I'm talking about the Mexican federal agency. I still hear a lot of people thinking that this is an airline problem. This is everything is about our agency of aviation, and it has nothing to do with airlines, okay. The problem we had is they didn't manage well, and they didn't defend in the right ways. I mean, originally we had 28 points that were raised a year ago, and those 28 points, in reality, when you open them, it takes you to about 100. The way they defended those points was very unfortunate. It was unfortunate because they had the documentation, they had the support, they had everything, but they didn't prepare themselves to answer even to the level of answering things that were not the things that they had deposited as evidences in the depository files. As a result of that, they raised another 38-39 points, which was very unfortunate. I don't think the points are very different from the others. That's my perspective. I don't think they did defend in the right way the legal basis that they have and authorities that they have from the legal perspective. We are re-preparing ourselves. I mean, we moved back. We are helping them to defend themselves in a much better way and trying to organize themselves around the right issues and the right things to be defended, okay? It is unfortunate. Yes. It is unfortunate. But it's not something that is unfixable, okay? Having said that, it's gonna take us at least six months more and that's the challenge. I think from Volaris perspective, what is very important is that for the second half of the year, as Holger said, we still have space for two additional aircraft to operate from Mexico to the U.S. In the medium term, we're adjusting obviously our network growth plans to the U.S., given these results. Long term, I mean, growth opportunities are not in jeopardy, and Volaris has more than 300 potential new routes, not yet serviced, where we can continue growing and sustaining our operation in a profitable way going forward. Wonderful. Great color, Enrique, as always. Have a nice day. Thank you very much, Josh, and thanks for your questions. Our next question will come from Michael Linenberg with Deutsche Bank. You may now go ahead. Good morning, everyone. I guess my first one, just, to Jaime. Can you remind us about seasonality, what your strongest quarters are from a demand perspective, and presumably profitability follows demand? Or maybe Holger can answer this as well. Yeah. The third quarter is typically seasonally the strongest, followed by the fourth quarter. We're looking at the second half of the year being the stronger part of the year. That sort of brings me to my next question because when we think about the guidance for the third quarter, that EBITDA margin, you know, is 500 basis points better than what it was in the second. I guess there's seasonality there. Is it only seasonality there, or are you know, I guess you're assuming a lower fuel price, right? You're looking at where the fuel curve is because you're not hedged. Then presumably the fourth quarter, just to get the math of the low 20s% on the EBITDA margin, you're assuming an even better margin, a better step up from the third quarter. Is that the right way to think about it? That's correct, Michael. Okay. Is there anything else? It's straight up, you're just looking at revenue growth and demand trends, and I realize it's hard to get an early read on bookings, and you're sort of looking at where the fuel curve is. But it's nothing else. There's no other cost savings or cost tailwinds or credits that you think you'll get in the back part of the year? Yeah. We always focus on cost, Michael. It's something that we are watching every single day. We are not exempt from the inflationary pressures that everyone is in, particularly in our U.S. operations. We stick to that guidance on the CASM ex-fuel growth for the year, which is challenging. Mm-hmm. It's something that we constantly monitor and constantly look at. If we find something, we will do it. The company, Michael, has a permanent action on costs, and we do have a program with targets of specific things that we need to reduce during the year, and Jaime executes in an amazing way on top of those issues, okay? I think what is important to consider is when you look at our unit cost without fuel from the first quarter and then you compare it versus the second quarter, we have a reduction of that, an effective reduction of that unit cost. Even if you take away the profits that we did on the sale-leaseback, our unit cost is still lower than in the first quarter, okay? Mm-hmm. That shows you, I mean, how we are managing in an active way our unit cost. Having said that, if we calculate our effective inflation since 2019, we're talking that we've been through a process that has been somewhere around 18% of inflation cost. The company has been managing and reducing costs during every quarter. Every quarter we report a better performance here. Other than when we had a capacity issue during the pandemic, okay? What you need to look at it is we will eventually have at least a 2-3% impact, okay? I mean, despite Holger and all his team and the operations and maintenance teams that report to Holger manage this in a very aggressive way, and Jaime is controlling it. I mean, I have to accept that despite after 18% inflation accumulated during the last two, three years. I mean, I cannot expect at least a 2%-3% growth on cost. We are planning a little bit of that for the following quarters. We're being conservative from that perspective. Having said that, we'll keep on working on every item that we can manage. Yeah, yeah, Enrique, I was gonna say you're preaching to the choir here because in the U.S., we had many of the airlines put up very, very strong revenue, but miss on their costs and the stocks traded down. As reported thus far, you are the best cost story. Your revenue was probably lighter than what we, you know, would have had, and your stock's down. I'm not sure if it's cost or revenue. I wanna hit you on fuel or maybe it's Jaime. Can you just remind us why is that so high, the $4.40? Is it the Mexican local taxes? That just seems much, much higher than what we're seeing from any carrier, not just in North America, but around the world. What's going on there? Is that a local issue? It's an airport and the storage and the into-plane extra cost that we get that maybe it's around $0.30 additional to the price you will get in other countries. That's the difference that you are looking at. Yeah. Remember, Michael, Mexico doesn't produce jet fuel, okay? Yeah. No, that makes sense. Okay. Just lastly, I wanna Holger, on ancillary, you know, I know the goal is to get to 50%- Michael. Oh. Michael, before we move forward, I think it's really important. I mean, guys, I mean, when we analyze the reports from the U.S. carriers in the last couple weeks, I mean, I want to stress again that those pressures that they are having from the labor perspective are not happening in Volaris. I mean, I strongly want to repeat to everybody here how well we prepared for our growth and how well we are operating in terms of performance. I think you guys need to understand this because that makes a structural difference, which is tremendously important when you evaluate the Volaris stock. Yeah. No, that's a big differentiating point. No, thanks for that, Enrique. Then just lastly, on ancillary, Holger, I mean, you talked about 40% and aspirationally wanting to get to 50%, but it was down per passenger. I realize, you know, you talked about 2021 being a tough year, but you did call out lower baggage revenue. I just was curious, is that the new rules going into effect and it's actually adversely impacting your ability on the baggage side? Or is that just less uptake? Like, what's driving that? Because to see ancillary go down per passenger in this type of environment, you know, it was a little surprising. Yeah, Michael. A couple of things happening there. Yes, clearly, the new rules on, or the new interpretation of the rules from PROFECO regarding carry-on bag charges- Mm-hmm. I would say that's one of the larger impacts. We also had some other impacts, which was in the second quarter of last year, we had one-off effects due to coupons expiring that we gave during the pandemic. Mm-hmm. That pushed down the revenues. We did have a boom in vaccination traffic in the second quarter last year. Mm-hmm. International travel typically has more ancillary revenue per passenger. Oh, good point. If you look at the blended average, just because of a lower international share this quarter, we had slightly lower ancillary revenues. Holger Blankenstein, when the new rules came into effect or the interpretation of the baggage rules, I had heard from sort of maybe it was you guys or others saying that the thinking was that you could offset those with just, you know, the way that you could approach different types of bundles, et cetera. Is that still possible that, you know, whatever you lose from the new interpretation, will you be able to offset, do you think, in the longer term? It just takes some time, you know, sort of getting, you know, sort of a reinduction or, you know, people sort of, you know, understanding the rules and the rest of the industry implementing it. Is that thinking right, or am I off on that? Yes, Michael, that's correct. We still target 50% of revenues from ancillaries, and we have multiple initiatives in place that just, you know, need time to get executed and trickle through the system. All right, great. Thanks, everyone. Thank you, Michael. Our next and final question will come from Alejandro Zamacona with Credit Suisse. You may now go ahead. Hi, Enrique, Holger, Jaime, and Renato. Thank you for taking my questions. A couple of questions here. The first one, probably a follow-up on Helane's question regarding Santa Lucía and Toluca. The question is, how do these two airports have been performing versus your former expectations? I know that it's not the main source of growth as Holger mentioned in the presentation. Out of these two airports, which one do you think has a higher potential growth in the short term, considering that Toluca airport has been already improved? Just to remind everybody, we have two aircraft based in Santa Lucía Felipe Ángeles Airport, and two aircraft in Toluca. As you rightly point out, it's a small share of our capacity right now. Those routes are in ramp up. In Toluca, we started on the first of July, so it's very early days. We are seeing quite healthy loads in the leisure segment that is quite easily stimulatable. In Santa Lucía, we have a mix of customers. VFR routes are performing well in terms of volume and also leisure markets, the big leisure markets. It's certainly early days, and we're developing those markets also. The ramp up will be there for the next six months, I would say. Yeah. Maybe to add to Holger's response. We started operating Toluca July 1, and we still haven't started in Felipe Ángeles, okay? I mean, we had the two routes that we started on March 21. But the additional capacity only starts on August 15 and September 15, okay? I mean, routes are selling okay-ish, but we're still too early to say. Okay. Got it. The second question in terms of the capacity. Can you provide any more details on what's behind the slight decrease in the expected capacity on the updated guidance? I mean, is this something related to the safety rating, recovery or perhaps due to the Mexico City Airport plan to reduce the slots? I mean, any thoughts around this might be useful. Thank you. Yeah. There's two main reasons. Number one, there are some aircraft delivery delays from Airbus that are gonna impact us in the overall growth rate for the second half. Number two, given the higher fuel costs, we are constantly tracking capacity in terms of marginal contribution. We have identified some frequencies on some markets in the low season of September and October that we would like to cut back to focus on profitability. It's a slight reduction in our growth. But we're instead of guiding to 25%, we're now guiding to 23%-25%. Great. Thank you, Holger. 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 very much to everybody. I mean, thank you very much for participating. I just want to remind everybody again my sincere gratitude to our family of ambassadors, to the board of directors, to you guys as investors, our bankers, our resources, our suppliers, for their commitment and support that has driven Volaris to this moment. I think one of the most important things that I need to remind everybody here is that the fundamentals of this company remain very clear, and our investment thesis for the future is absolutely transparent and clear and solid, and I think it is really important for you guys to consider these things for the future. Thank you very much. Thanks for your support. Thanks for all your calls and everything. It's been a nasty couple of months and we have received a lot of direct calls from everybody, and we've been trying to take care of them. Here we are to serve you if you need more information, and we're always available for everybody. Thank you very much. This concludes the Volaris conference call for today. Thank you very much for your participation, and have a nice day.