Hello, everyone, and a warm welcome to the LATAM Airlines Group First Quarter 2025 Earnings Conference Call. Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives and expected performance or guidance are forward-looking statements. These statements are based on a range of assumptions that LATAM believes are reasonable, but are subject to uncertainties and risks that are discussed in detail in the published 20-F, 2025 updated guidance, earnings release, financial statements and related CMF and SEC filings. The company's actual results may differ significantly from those projected or suggested and any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. And if there are any members of the press on the call, please note that for the media, this is a listen-only call. I will now hand over to CFO, Ricardo Bottas. Please go ahead.

Thank you. Hello, everyone, and good morning. Welcome to our first quarter 2025 conference call and thank you all for joining us today. My name is Ricardo Bottas and I am the CFO of LATAM Airlines Group. Here with me is Roberto Alvo, our CEO; Andres Valle, Corporate Finance Director; and Tori Creighton, Head of Investor Relations. And we will present our highlights and results for this first quarter. I will hand it over to Roberto to share opening remarks about the quarter's highlights. Once finished, I will present them in more detail alongside the financial results.

Good morning, everyone, and thank you for joining us today. This quarter marked a strong start to the year for LATAM Group. The group transported over 21 million passengers and expanded capacity by 7.3% year-over-year, all while maintaining healthy load factors across our network. On the financial front, we delivered record profitability with adjusted EBITDAR reaching nearly $1 billion, a record for the company and both operating and EBITDAR margins at the highest levels to date. Net income totaled $355 million, up 38% year-over-year and the strongest first quarter result in LATAM's history. Behind these results, it's a commitment to our customers. The group has continued to invest in elevating the travel experience from modernizing cabins and expanding WiFi connectivity across the fleet to enhancing digital services and operational reliability. These are not one-off improvements, but part of a consistent strategy to offer a better, more connected and more personalized journey. This is the core of our value proposition to be the airline of choice in South America not only because of the breadth of our network, but because the LATAM Group delivers a superior experience across every step of the journey and it is in large part possible due to the hard work of all 39,000 LATAM Group employees that are committed to this shared purpose. Operationally, the group continued to execute with discipline, growing capacity while maintaining healthy load factors across all markets. Customer satisfaction reached record levels confirming the progress made in elevating our travel experience. On the financial side, LATAM delivered outstanding results supported by revenue growth, cost control and favorable fuel dynamics. Profitability reached record levels for our first quarter reflecting the strength of our business model. Furthermore, following continued cash generation, LATAM is in a position to carry out shareholder return focused capital allocation…

Thank you, Roberto. So let's move to the slide -- the next slide, Slide 4. In terms of operational performance, LATAM Group continues to show solid year-over-year growth across all segments. During the first quarter, as Roberto just mentioned, the group transported over 21 million passengers representing an increase of 3.6% versus the same period in 2024. Capacity in ASKs grew by 7.3% supported mainly by international operations, which expanded by 10.7% year-over-year confirming our ability to allocate capacity strategically in high demand markets. Load factors remained healthy across all segments with the consolidated load factor reaching 83.3%. In terms of consolidated revenues per ASK, we observed a 5.3% decrease year-over-year basically related with the currency depreciation in some of our key domestic markets and capacity increase in our international operations. In Brazil, although RASK decreased by 12.4% in dollar terms impacted by foreign exchange, when we look at the performance in local currency, we see a positive trend with domestic Brazil RASK increase by 3.9% reflecting resilient demand and stable pricing in these relevant markets. Spanish speaking countries posted an 11% RASK increase in local currency. This performance reinforced the strength of LATAM Group's diversified network and its ability to balance out localized volatility, maintaining profitability through strategic geographic exposure. Turning to the next slide, Slide 5. The financial results achieved, underscores the group's ongoing commitment to enhancing customer satisfaction. As of the end of the quarter, LATAM Pass, our loyalty program, reached a milestone having now over 50 million members. Revamped in 2025, LATAM Pass now offers an innovative experience with more options for earning and redeeming miles and greater ease of access to Elite status as well as the opportunity to customize rewards as members reach intermediate milestones. These enhancements are aiming at increasing engagement to reward…

[Operator Instructions] Our first question comes from Michael Linenberg with Deutsche Bank.

Two questions. Congrats on the really solid results. Roberto, I want to pose the first question to you. Just a few weeks ago, we had the IMF lower global GDP growth by 0.5% and I've -- in my professional career, I've never seen a revision of that magnitude. It's usually 0.1% to 0.2%. We've seen airlines all around the world withdraw guidance, many guide to a much more challenging outlook and yet you took your numbers up. You took margins up and you took guidance up. And I'm curious how much of that is just a function of your primary market and your competition and the fact that the pressure that we're going to see on the global economy will be much more impactful to some of the weaker carriers. And I'm curious if that may be you're thinking here is that if things do slow down, it will impact everybody, but it will impact the weaker carriers disproportionately more so creating more opportunities for someone like yourselves. The thinking that the rich get richer. Is that underlying as you think about your forecast that even if things slow that LATAM will be able to do even better than the competition? Because right now you're the only carrier out there who at least seems to be pointing to a better outlook versus most other carriers.

Michael, you said you had 2 questions. You want to ask the second one after I answer?

Yes, that's what I'll do. I'll do a quick second.

All right. And thanks for the question. I think it's a really good question. So a couple comments. First, we have not seen to date in our bookings or in our cargo revenues any relevant impact from all the announcements and the news that we have seen from the Northern Hemisphere coming. I believe that on the one hand, our markets are not following necessarily the dynamics that you see in the U.S. We don't have DOGE for example and I think in general we haven't seen those trends and we remain so far pretty isolated and relatively confident that even though this may impact us going forward and the world altogether, it doesn't look today and as per the bookings we have that it's something that we are overly concerned in the short term. Having said that, of course this can change and that's why we remain vigilant. And to your point, yes, I would agree with you in general. But let me say something important here, you see growth in our forecast there. But the important thing is we don't chase market share, we chase growth where we can win. So we are very specific and targeted in finding our strengths and investing where our strengths are. I do believe today that we have something I'd like to call relative advantage, which is the strength of our numbers vis-a-vis the rest of the industry and particularly in the region. So even though the uncertainty may affect the industry in general, I think that LATAM has positioned itself both from a financial perspective and from a network perspective in the right place to take advantage of volatility. So even though we remain cautious in terms of the overall impact that this may have, we have the ability today to be very targeted in where we grow and how we improve our network and our position further. And I believe that's one of the key advantages that we have created over the last 2 years, which we expect to exploit if the conditions are right.

Great. And then just my second question, this is just a little bit more nuanced. Across the region, I know in the past Colombia domestic had been one of the weaker markets. Maybe things are stabilizing there. As you look across your region, where are the strong points? Where are the weak points? I know we've sort of heard that Argentina now is maybe becoming one of the better if not the best performing markets in the region. Just any color on that. How things have sort of evolved since the last quarter?

Sure. Yes, in the last 2 quarters, we pointed out that we thought that domestic Colombia was under excess of capacity. I think that, that has stabilized in the last 2 months. Capacity for the whole industry has been negative in terms of growth in the last months and therefore, the market is in a slightly more healthy position than it was in the previous 6 months. Across the rest of the domestic market, in general we see good strong demand in a stable environment. I would say that the weakest point is today Ecuador, which is very small for us; but is basically related to the geopolitical issues or the political issues and safety issues they have there, but it's a very minor part of our operation even though it still remains healthy. International has been very strong particularly international travel within South America where most of our international growth has been focused, less so in the long haul the growth just because we don't have the fleet. But when we see long haul, we see good performance both in Transpacific, Europe and the U.S. being Europe and Transpacific slightly better than the U.S. So in general, I would say that the markets have remained stable and domestic Colombia, which was a little bit of a pain point, has relatively improved through the last 6 months. Lastly on cargo, we have seen a very strong end of 2024 albeit a very weaker first half of 2024. First half of 2025 has been stable in general, a little bit less active than the end of 2024. It's also very seasonal. The second half of the year is much better than the first half of the year in cargo. And we have seen so far no impact of the tariffs that are imposed basically in the U.S. with respect to cargo traffic. However, we're very mindful of the de minimis waiver that ends on May 2 and we're monitoring if that will have an effect on cargo traffic and particularly on capacity going forward. But so far, sales have remained in a good place.

Our next question comes from Gabriel Rezende with Itau BBA.

Regarding the guidance, it's actually a follow-up to the previous question. I was just wondering how much have you guys been positively surprised by the 4Q numbers as you have been? Just trying to understand whether the better guidance for the year reflects a better first quarter and the next 9 months should be pretty much the same as you guys were expecting or if you guys are seeing better than anticipated figures in the coming quarters as well? Just trying to understand what you have put into the guidance in that sense. And also regarding the guidance, you are posting a CASK ex-fuel that is already below what you are guiding for the full year. So the overall feeling is that your guidance might have some room to be upside. Am I correct? Those are my 2 questions.

So with respect to your first question, we have good visibility, good bookings visibility for the remainder of the second quarter and in general, we see positive trends and stable demand throughout most of our business units. And that gives us confidence that despite the uncertainty we've seen around the world, this has not made an impact to our demand trends in this part of the world. Having said that, and I probably forgot to mention this when Michael asked the question, I think that an important driver also of our improved numbers is that we are seeing a better share of premium traffic coming our way. We have devoted a significant amount of effort and time and investments to enhance our product, improve our product throughout the experience of the customer. And as Ricardo mentioned it in his words, premium revenue is increasing far faster than total passenger revenue has been increasing. Passenger revenue increased only 1.6% in the quarter, premium revenue increased over 7% and I think that's a distinctive change that we have made in the last few years. We're focusing more in a segment of the market where we believe there was willingness to pay that not necessarily we had understood as we are understanding it today and this is an important part of our focus going forward. And for the remainder of the year, we're following long-term trends. And as far as the information we have, again we feel confident on what we're seeing. But as I said on my script, on my remarks, we remain vigilant and if there's anything that merits any change in our guidance, we'll post it when appropriate if it happens. For the cost part, I'll turn it to Ricardo.

Okay. Thank you, Gabriel, for your question. I think we also disclosed for the updated guidance the assumptions that we have for jet fuel price, which is $90 per barrel. So yes, it will depend on the scenarios. We could have some upside, but also downside risks to this guidance considering this level of fuel price as well as the FX exchange rate that we also disclosed on this guidance at BRL 5.9 per $1. Okay.

Our next question comes from Jens Spiess with Morgan Stanley.

Congrats on the strong results. I just wanted to follow up on the previous question. Basically on the cost print you had this quarter and the guidance you're providing for the full year, I was looking that you had some benefit from like lower maintenance costs. You explained in your release that part of it is driven by a reversal of redelivery provisions due to acquisition of aircraft. I think it was like $32 million. That obviously is probably not sustainable, right? So are there any other items we need to adjust for? And also you had in other expenses apparently some FX benefits. If you could maybe elaborate on what percentage of those expenses are denominated in local currency, it would be quite useful.

Okay. Jens, it's Ricardo here. Thanks for your question. I think the maintenance adjustment that we have disclosed, it's related with the 6 aircraft acquisition and it's just a move from operational leasing structure to a next financial leasing structure. So we disclosed just to let you aware about, but we are still confident that we could also manage to control under efficiency, digitalization and other a lot of group of initiatives that we have inside the company to keep controlling the costs. But I think it's important to share with you that reversion in provisions. We are focused on continued cost savings initiatives. So we have a lot of initiatives not only for the back office and admin expenses costs, but also for maintenance and other relative operating costs inside the company. So we are adding to this forecast and our confidence for the guidance that yes, we still have a long journey to keep controlling and find alternatives to even reduce even more the costs. On this period of first quarter, we had an impact of $0.002 from the FX. So we also need to understand the real outcomes for the FX over the final ex-fuel cost, but I think it's also important to emphasize. And from the -- another relevant part of the cost which is fuel, we disclosed our performance in terms of the way that we could reduce the cost of fuel. But remember, we improved the CASK and the capacity 7%. So actually the consumption in barrels was up 5% and the average price was down close to 10%. So the average was a reduction that we have disclosed in our financials. And after all, we disclosed there is no specific figures for the exposure that we have for the U.S. denominated part of our costs. But together with fuel, we are talking about around 7% of our total costs could be denominated in U.S. dollars. But remember that we have from our mix of revenues, including international and the U.S. and Europe point of sales and also relevant part of revenues also denominated in hard currency, which could represent more than 60% of our total revenues. Okay?

Okay. Perfect. And the $0.002 you mentioned on your CASK ex-fuel benefit from the FX, that's year-over-year, right?

Yes.

The next question comes from Joao Frizo with Goldman Sachs. João Francisco Frizo: Congrats on the results. I had 2 quick questions and 1 follow-up. So on the guidance itself, you guys are expecting an even better than expected leverage ratio by the end of this year. So I just wanted to understand what would make you guys consider announcing an extraordinary dividend. I know this is a fluid situation, right, in the macro globally, but the leverage path seems to be on track and you guys guided for a below 2x leverage in your Investor Day. So this opens room for maybe an extraordinary dividend. I just wanted to get a sense on that. My second question is around the selling shareholders, right? If you guys could provide an update on their willingness and timing of those guys potentially selling more shares into the market. And finally, just a quick follow-up on the guidance. Your jet fuel expectations remain unchanged. I just wanted to double check if that accounts for the hedges you guys undertook in the period or that is excluding hedges? And then if you could provide what would be the adjusted jet fuel accounting for hedges, that would be nice as well.

Okay. Joao, thank you for your question. I think regarding our liquidity levels and the dividend decisions, actually remember that we are sharing with the market our discussions with the Board of Directors regarding the capital allocations, which could include additional dividends, but also other structures to have an additional repurchase of shares. So we are having that kind of discussions with the Board. And yes, we depend on the final decision from the Board and also the way that we are seeing our figures and the forecast figures complying with the financial policy and the guidance that we have provided. But yes, we are comfortable with the liquidity situation that we have to have that kind of discussions with our Board. Regarding the shareholder decisions to have a secondary or a follow-on, I think it's more on the shareholders' decision. So we have no information and if we got that information from shareholders, we will let the market aware. Okay? And your last question, just remind me was related with the share of the hedge that we have for fuel or for FX? João Francisco Frizo: Yes. It was just to double check whether the jet fuel price you guys provided in the guidance accounts for the hedges you guys took or if there might be some upside to that price as you guys maybe did hedges in the falling jet fuel environment?

What -- I cannot give you any specific price and the size that we have. Actually we have disclosed in the earnings release the average part of our consumptions forecasted for the next 4 quarters that are covered partially with a hedge. What I can tell you now is that this $90 per barrel is aligned with the strategy that we have for the forecast together with the impact from the hedge outcomes. So that's why we are confident to [ cite ] some range under a low level of volatility. We are committed to reach and to work with this guidance supported by this $90 a barrel.

The next question comes from Ewald Stark with BICE Investors.

Congratulations for the results. My first question is with regard to yields in the international segment, which were pretty strong. I would want to ask what do you expect going forward? Second question is about growth expectations from Brazil, which were listed against previous guidance. But up to this point, industry figures provided by ANAC and LATAM figures show modest growth in the first quarter. So when you could expect that RASK growth will converge to the guidance of LATAM Airlines?

So on the first question, so please remember that our International business segment is comprised both of long haul and international business in South America and you have to see those 2 segments separately in terms of their dynamics. But what we have put on the guidance is our expectation in general of, as I said, stable demand and a good growth environment particularly in regional. So we don't disclose going forward yields and RASK per business area or for the company, but they're embedded -- our expectations are embedded in the guidance altogether. And with respect to domestic Brazil, so first, the slight improved capacity that we have posted here is purely based on utilization and fleet usage. So we're not adding more assets to our fleet during 2025 vis-a-vis of what we had expected. This is simply a better utilization of the current assets we have. And looking at the environment in Brazil, which is on a demand perspective stable and on a capacity perspective as well stable, we see good opportunities to reinforce where we have strength. And what the guidance is reflecting is the opportunities that we see where we can improve the product and the network for our passengers.

Okay. Perfect. And just following up on that last answer. I want to know how do you see competition in Brazil as other competitors such as Gol or Azul are expecting higher growth rates in capacity for the passenger segment. I know that Gol and Azul don't disclose -- don't break down domestic and international air travel, but it seems like they are expecting to grow at higher rates than LATAM Airlines.

I don't like to comment on capacity growth of our competitors. That's their decision and their strategy. What I focus on is our own operation and particularly where we have strength. So what I think is important in terms of our strategy here is that we do invest where we know we can win and the focus that we have in growing in domestic Brazil is in the places where we believe we can enhance our network and bring a better product for our passengers. So we'll see how it develops during the year, but we're very confident in our position what we have built and developed over the last 2 years in domestic Brazil and we're looking forward to trying to have a better product and a better network for our passengers during the year.

The next question comes from Stephen Trent with Citigroup.

Actually the first question I have is maybe a follow-up to the gentleman that was just speaking. When we think about Brazil's domestic market and you look at your guidance -- asking another way, are you basically assuming that sort of the competitive environment stays steady state for the rest of the year vis-a-vis where it is today and no blowback from this ticket fraud stuff from Despegar or anything like that was just love to hear what you're thinking about that high level.

Stephen, I mean we see, as I said, a good demand environment in domestic Brazil and we see relatively good capacity discipline in general in the market. We see our strengths. We understand where we can improve our network and that's where we're focusing. You mentioned something on Despegar. I don't think -- I'm not going to refer to Despegar, but I don't think that those dynamics are relevant to the dynamic of the market, which is much bigger than the size of Despegar itself. So again very confident on what we have built over the last 2 or 3 years in domestic Brazil and investing basically where we have our strengths and taking advantage of our demand environment that has been stable.

Great, appreciate that. And just a quick follow-up. I definitely appreciate the color you gave on FX assuming it's going to be a bit weaker. Any view on why there was -- you didn't adjust fuel guide? I know you've got hedges there about $2.14 a gallon for the year. You did $2.80 in 1Q and the hedged versus unhedged difference was just $0.01 a gallon. Would sort of just love to hear high level sort of that $90 per barrel bogey that's included in the guide. Andrés Valle Eitel: Stephen, Andres here. Yes, the $90 a barrel is what we see here. If you look at the last year, I think fuel price was all over the map. We have been asked frequently whether this could be an upside. As Ricardo said, could be a downside too. But $90 a barrel, today is at the spot prices at $86 and the curve is around those levels. So we feel confident with that $90 a barrel for jet fuel for the full year.

Our next question comes from Pablo Monsivais with Barclays.

Just wanted to pick your brain on, it seems that U.S. carriers are pulling out capacity.

I'm sorry, Pablo, we cannot hear you.

Can you hear me now?

Okay. Much better.

Perfect. Okay. My question is regarding your read-through from U.S. airlines pulling out capacity in general. Have you seen any material impact on the international routes you operate? Is this an opportunity for you to increase capacity or how you plan to navigate on this condition? That's my first question. And my second question is if you can provide some color in terms of the demand from transatlantic routes and within each point of sale.

So I think 1 important thing to remember is that the Southern Cone is less -- has been historically less exposed to regulatory traffic to the U.S. as compared to the northern part of South America, Central America and Mexico. And therefore, I think that the impact that other countries further north have seen in terms of traffic to the U.S. are not as relevant to the Southern Cone as they are probably in the northern part of our subcontinent. We have seen fairly minor changes in demand generally to the U.S. from our home markets and even though it's something we're monitoring well, it's not something that today looks meaningful. And do remember that we have the joint venture with Delta as well, which provides a very good diversification in terms of point of sale with respect to what we sell in South America vis-a-vis what they sell in the U.S. So all in all, in general so far even though the U.S. is a little bit slower than transatlantic and transpacific, it has been still in a good position and the impact has been relatively low from all the news that have come into the U.S. And in the case of transatlantic, as you've asked, in general demand between South America and Europe has been strong in the last, I would say, 2 years and it has good components of strength from both European point of sale and South American point of sale. Nothing especially important to report with respect to how those 2 trends go. They're relatively stable on both sides.

Our next question comes from Guilherme Mendes with JPMorgan.

Two quick ones. The first one, you mentioned that demand remains good so the outlook overall remains pretty solid. But assuming some kind of demand deterioration, what kind of capacity and fleet flexibility would you have in terms of the delivery schedule from Airbus and Boeing? And the second one, a follow-up on Brazil domestic. A lot of talks on the potential M&A between Azul and Gol and if you have any preliminary views on how LATAM could be impacted?

On the first question, so remember that when we saw and we reported this last year when we saw delays on the Airbus side and also issues with the Pratt & Whitney engines, we took the decision of extending an important number of 319s and keep operating them. These are very low capital cost aircraft that run almost on 100% variable cost basis today and it's the flexibility we have decided to keep within the fleet to either compensate for slowdowns or increase speed in the case of us seeing better demand. So we have the ability to adjust our capacity with that fleet in particular and we don't expect that if there's a slowdown, we'll see or want to have any changes with respect to Airbus deliveries. What we would do eventually is decrease the utilization of those very low cost of capital assets to adjust if that was the case and was necessary. And we like very much this flexibility of having something between 5% and 10% of our capacity, which is running on almost 100% variable cost basis. That allows us to move in this way. And with respect to Gol and Azul, I mean we've seen the news on the nonbinding LOI for quite a while already and I don't think it's our position to speculate. If there's further news on that, we will react. At this point in time, we still believe it's premature to have a reaction on those potential nonbinding conversations for now.

Thank you. Those are all the questions we have and so I'll turn the call back over to Ricardo to conclude.

So thank you all for joining today. If you have any further questions, please reach out to our Investor Relations team and have a great day. Thank you.

Thank you, everyone, for joining us today. This concludes our call and you may now disconnect.