Copa Holdings SA (CPA) 2021 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

Welcome to Copa Holdings Third Quarter Earnings Call.

(Operator Instructions) As a reminder, this call is being webcast and recorded on 18th of November, 2021.

Now I will turn the conference call over to Daniel Tapia, Director of Investor Relations.

Sir, you may begin.

Thank you, Laurie, and welcome, everyone, to our Third Quarter Earnings Call.

Joining us today are Pedro Heilbron, CEO of Copa Holdings; and Jose Montero, our CFO.

First, Pedro will start by going over our third quarter highlights, followed by Jose, who will discuss our financial results.

Immediately after, we will open the call for questions from analysts.

Copa Holdings' financial reports have been prepared in accordance with International Financial Reporting Standards.

In today's call, we will discuss non-IFRS financial measures.

A reconciliation of the non-IFRS to IFRS financial measures can be found in our earnings release, which has been posted on the company's website, copa.com.

Our discussion today will also contain forward-looking statements, not limited to historical facts that reflect the company's current beliefs, expectations and/or intentions regarding future events and results.

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially and are based on assumptions subject to change.

Many of these are discussed in our annual report filed with the SEC.

Now I'd like to turn the call over to our CEO, Mr. Pedro Heilbron.

Thank you, Daniel.

Good morning to all, and thanks for participating in our third quarter earnings call.

Before we begin, I'd like to thank all our coworkers for their commitment to the company and recognize their continuous efforts and dedication to keep Copa at the forefront of Latin American aviation.

To them, as always, my utmost respect and admiration.

As you may have seen in our earnings release published yesterday, we're glad to report improved financial results for the third quarter.

The increase in vaccination rates and reduced travel restrictions in Latin America are positively affecting air travel demand in the region, enabling us to grow capacity quarter-over-quarter while improving load factors.

Since restarting operations in Q3 2020, we have increased flight from almost 0 to nearly 70% of our pre-pandemic capacity in Q3 '21.

Going forward, we expect further relaxation of travel restrictions and a continued demand recovery, which should allow us to deploy additional capacity in the fourth quarter and 2022.

But of course, COVID has not gone away.

And we've seen, in other parts of the world, additional (inaudible) of the virus could affect demand in the future.

So we will remain focused and flexible in terms of capacity adjusting our plans as needed.

Now I'll highlight some of our third quarter results.

In terms of capacity, we reached almost 70% of third quarter 2019 ASMs compared to [48%] of 2019 capacity in the second quarter.

Load factor came in at 79%, an improvement of 2 percentage points compared to the second quarter on an almost 50% quarter-over-quarter ASM growth.

Revenues increased by 46% over the previous quarter to $445 million.

Our ex-fuel CASM decreased from $0.076 in Q2 to $0.062 in Q3 and reaching 2019 unit cost levels at 70% of 2019 capacity.

We reported an operating profit of $59 million and an operating margin of 13.3% in the quarter.

Excluding $10.4 million passenger revenue adjustment, the company would have reported an operating profit of $48.6 million and an operating margin of 11.2%.

We had a cash buildup of $54 million and ended the quarter with a cash balance of $1.3 billion and a total liquidity of over $1.6 billion.

On the operational front, the company delivered an on-time performance of 89.4% and a completion factor of 99.8%, once again among the best in the industry.

These results are a true testament to our employees' continuous commitment to delivering a world-class product to our passengers.

With regards to our network, we're excited to start our first new destination since the beginning of the pandemic.

Beginning in December, we will offer service to 3 new cities: Armenia and Cucuta in Colombia and Atlanta in the U.S. By the end of the year, Copa will provide service to 72 destinations in North, Central, South America and the Caribbean, and we expect to recover service to the rest of our pre-pandemic network during 2022, strengthening our position as the most complete and convenient hub in Latin America.

During the quarter, we agreed with Boeing to accelerate the delivery of 12 737 MAX 9 that were originally intended to be delivered starting in 2025.

We will receive 2 of these aircraft in 2022 for a total of 7 MAX 9 deliveries next year and the other 10 aircraft will be added to Copa's deliveries from 2023 through 2025.

As to Wingo, during the fourth quarter, it expects to receive 2 aircraft from the Copa fleet to end the year with a total of 8 737-800.

In closing, I'd like to reaffirm that we have a proven and strong business model, which is based on operating the best and most convenient network for intra-Latin America travel from our Hub of the Americas, leveraging Panama's advantageous geographic position with the region's lowest unit cost for a full-service carrier, best on-time performance and strongest balance sheet.

Going forward, the company expects that its Hub of the Americas will be an even more valuable source of strategic advantage.

Now I'll turn it over to Jose, who will go over our financial results in more detail.

Thank you, Pedro.

Good morning, everyone.

Thanks for being with us today.

Hope you are doing well.

I'd like to join Pedro in acknowledging our great Copa team for all their efforts and great spirit during these many months of the pandemic.

I will start by going over our third quarter results.

Our capacity came in at 4.4 billion available seat miles, which amounts to 69% of the capacity operated during the third quarter of 2019.

Load factor came in at an average of 79% for the quarter, an increase compared to Q2 while operating 49% more ASMs.

We reported a net profit of $8.2 million or $0.19 per share.

Excluding special items, we would have reported a net profit of $29.9 million or $0.70 per share.

Special items for the quarter are comprised mainly of an unrealized mark-to-market loss of $32.1 million related to the company's convertible notes issued in 2020 and $10.4 million in revenues related to unredeemed tickets, which we are not included in our underlying results as they correspond to sales made during 2019 and early in 2020.

We reported a quarterly operating profit, which came in at $59 million.

Excluding the $10.4 million in unredeemed ticket revenues, we had an adjusted operating profit of $48.6 million for the quarter.

Our operating margin was 13.3%.

Excluding the passenger revenue adjustments, we would have reported an operating margin of 11.2%.

Unit costs, excluding fuel, were better than in the second quarter at $0.062 per ASM, driven by quarter-over-quarter capacity growth of 49%.

We continue with our cost savings initiatives, and we are now targeting to achieve unit cost below $0.06, once we reach about 90% of our pre-COVID-19 capacity.

Our yields for the quarter came in at $0.12, a decrease of 3.4% compared to the second quarter, while operating more ASMs.

During the third quarter, we had a cash buildup of approximately $54 million, driven mainly by increased sales during the period.

As a reminder, for our cash buildup measure, we exclude all extraordinary proceeds from asset sales, but include CapEx and the payment of our leases and other financial obligations.

I'm going to spend some time now discussing our balance sheet and liquidity.

As of the end of the third quarter, we had assets of close to $4.2 billion, and our cash, short and long-term investments ended at $1.3 billion.

We also ended the quarter with an aggregate amount of $345 million in unutilized committed credit facilities, which added to our cash brought our total liquidity to more than $1.6 billion.

In terms of debt, we ended the quarter with $1.6 billion in debt and lease liabilities at similar levels to the ones reported for the end of the second quarter.

Turning now to our fleet in July, we finalized the sale and delivery of our last Embraer-190.

And during the quarter, we delivered 2 Boeing 737-700s to their new owner.

We ended the third quarter with 87 aircraft, [68] 737-800, 13 737 MAX 9s and 6 737-700s.

These figures will include aircraft currently in temporary storage that we plan to reactivate in the upcoming months.

During the fourth quarter, we expect to receive 2 more 737 MAX 9s to end the year with a total of 89 aircraft.

As for the remainder of the year, based on the current state of the demand environment and air trial restrictions, can provide the following outlook for the fourth quarter of 2021.

We expect capacity to be approximately 83% of Q4 2019 levels at about 5.1 billion ASMs, and we expect our operating margin to be approximately 12%.

Our Q4 2021 outlook is based on the following assumptions: revenues of approximately 80% of Q4 2019 levels at about $545 million; CASM ex-fuel of approximately $0.061 and an all-in price of $2.50 per gallon, an increment of approximately 17% quarter-over-quarter.

Given the uncertainty, it is still premature to give the full year 2022 guidance.

However, for the first half of the year, we preliminarily expect our capacity measuring ASMs to be approximately 92% of the capacity upgrade during the first half of 2019.

Thank you.

And with that, we'll open the call to some questions.

(Operator Instructions) And our first question is from Hunter Keay of Wolfe Research.

Pedro, what is your level of involvement around capacity and growth decisions?

Does every new market that you add or remove or add to need your approval?

Yes.

Definitely, we are a relatively small team, and we're all very involved in those kind of decisions.

Okay.

And what about spending money, Pedro?

What's your level of involvement in the budget process, not only setting it, but also monitoring spend?

And I know that's not a COVID question.

It was really how have you done things before COVID?

How are you planning in doing things after COVID?

I think if you ask the team, they'll tell you that I'm too involved.

And I have been very involved maybe to the point of obsession, and that really hasn't changed.

We haven't had to adjust because we've all always had that culture being very involved looking at the details, looking after every item in the budget.

Same with route planning and the whole thing.

Again, we're a small team, and we're all very involved in everything.

But Hunter, during the pandemic, the focus has even been stronger on these items.

And so we have been even more strict and careful in the way that we spend our money and how we track that.

And so there's quite a bit of involvement from all involved and, as Pedro mentioned, is on personal time on this.

Can you give me an example of maybe a lesson learned from a cost perspective that you're going to keep in place going forward even when things get better?

Well, I would say -- I think a good example is the fleet.

I think some of the great movements that we've made in fleet over the last several months in terms of just going to an (inaudible) fleet has been a very, very good move and that creates a lot of -- besides the gauge benefit that you get, you also get a lot of simplicity in terms of execution of cost through our many areas with flight operations, airports, maintenance, et cetera.

So that's one that I think has been very, very positive for us.

And our next question is from Savi Syth of Raymond James.

Just the cost execution has been pretty remarkable here.

And Jose, I missed if you said you would get to $0.06 or sub $0.06 and you got to 90% of 2019 capacity, if you can clarify that?

And then just along those lines, I was wondering if we can start thinking about maybe sub $0.058 as you get to 2019 capacity and what some of the tailwinds and headwinds that you might see over the next 2 years?

For example, I'm guessing performance bonuses will start up again next year, if the current trends hold.

So just kind of curious if you can give a little bit more color on how you're thinking about the unit cost.

Yes.

Savi, yes, our expectation as of now is that when we reach that 90% of 2019 capacity that we will be below the $0.06 mark.

So yes.

And in terms of what are some of the tailwinds that we have, I mean, we have a lot of projects ongoing.

I'll go back to the fleet itself in terms of the uniformity in the fleet and as we put in additional MAX, there will be a good improvement.

I think that there's always contract renegotiations and savings that we've performed that I think we'll -- we shared a lot quite a bit over the last several months in terms of our overall cost.

And there's more there.

There are certainly -- we're working on this every day, and there's an opportunity, I think, for -- as we grow to bring it probably even further down.

But at this stage, we'll reserve that to 2022 when we get closer to the figure, and we'll -- but I think we're on good track to bring it down below $0.06, anywhere below there, as you mentioned.

And Savi, you're right, there will be expenses that maybe we haven't had to the same level during the pandemic like performance bonuses, but those are always based on surpassing our targets and on much better performance and results.

So they pay for themselves.

Is there a level that you think is [twofold] that you can't reach?

Like well, what's the (inaudible), I guess, in terms of what you can hit?

Yes.

I would say for now, we'll keep it at a sub-6 -- somewhere in the high $0.05 range is something -- that is very doable.

(Operator Instructions) And our next question is from Mike Linenberg of Deutsche Bank.

Yes.

Maybe we could just start on the cost side.

Jose, you were guiding to $0.066.

You came in at $0.062.

Congratulations on being flat to 2019 on slightly less than 70% capacity, which obviously underscores the operating leverage tailwind of your story.

Where did you make up like what were the positive surprises on the cost side?

And are these timing that maybe dissipate over the next couple of quarters?

Or are these things more permanent?

Can you just run through because it was a pretty [sensible] cost beat?

Absolutely, Mike.

Yes.

And I have to start by saying that we've been in this company-wide effort to keep our cost down.

That was -- it's always been part of [Copa DNA], but we improved on that over the past 1.5 years.

I would say, specifically for Q3, there were a set of restart-related expenses that actually came in lower than what we thought.

So it was -- it was a little bit of timing, and we thought that there were some expenses that we're going to be somewhat higher than what we thought initially.

And looking forward, we gained a guide now for Q4 of $0.061.

So I think that will be sort of in that level, at least, for Q4.

Okay.

Great.

And then just my second question, and this is probably Jose or Pedro.

Now that you have 13 737 MAX 9s and the fact that like you're going to get 2 more and then another 7, so it's going to become a much bigger part of your fleet.

It does have a product that historically -- that is very unique to Copa from a historical perspective.

And I'm getting at the fact that you have the lie-flat seat when you think about all the service that has been withdrawn in the region, even connecting over Panama, if you can say, fly from San Fran to Sao Paulo and lie flat to a lie flat, I haven't asked this question in previous quarters because I didn't think you had enough shells really give a good answer.

But when we think about the uptake in the premium cabin, what are you seeing?

Are you getting better pricing?

Are you at or levels similar to maybe some of the U.S. competitors?

Or is the pricing on par with some of the nonstop service because this is your flagship product.

And I feel like you can really roll this out and take advantage of those who are willing to pay up for it.

So any color that you can provide on that product because I think it's a fantastic product.

Yes.

Thank you, Michael.

A few comments.

So we need to have enough shells, as you well said, to guarantee the service on a given market.

So for example, a San Francisco and a Sao Paulo will have a guaranteed dreams as we call our product -- guaranteed dream service.

So once it's guaranteed, we can price it better consistently.

And so far, we've been getting a premium for the (inaudible) product.

And also, I should say, that our costs are better than options through other hubs or nonstop option they are.

They are usually not that many.

So we can do well, even pricing it below what was available before for a similar product.

And our next question is from Alejandro Zamacona of Credit Suisse.

Just a question on yields.

What can we expect for 2022?

I mean considering that on one side, you are expecting a further significant progress on capacity, and this could put yields lower but also the business traffic hasn't recovered, and this could help to have a better yield environment.

So any thoughts or color around this may be useful?

Yes, Alejandro.

So it's too early.

We haven't provided full year guidance for 2022.

But I would say that system-wide, the yield environment has been improving.

And as we put in capacity, there's -- but I would say that at least initially for the first part of the year, it could be offers to the 2019 base in the kind of mid-single-digit range.

So that's kind of the first kind of look into the early part of 2022 in terms of the yield compared to 2019.

So it will still be offered but at a lower rate than where we were during -- throughout most of 2021.

And our next question is from Duane Pfennigwerth of Evercore ISI.

It's nice to see that [sandbaggers don't die].

They just take a little break.

So just on restart, right?

Can you give us some examples of like what's ahead of you, kind of what you're considering?

Are there any pockets where labor availability is more strained or -- and maybe you could just kind of qualitatively talk about pilots, for example.

Yes.

Okay.

So your first comment I had to like pause and think about it.

And I should say that we're not trying to [sandbag].

Honestly, this pandemic has been very difficult to predict.

Even 3 months ahead, it's like 2 years in normal times.

So demand came back at least in this quarter and what we're seeing in the next few quarters, much faster and stronger than what we would have expected some months ago.

So I think that's important to keep in mind that times are very different.

In (inaudible) days, we could predict things, but we grew capacity quarter-over-quarter, 50%.

And it was hard to tell then how the man was going to react.

Back in November of 2020, which seems like 10 years ago, we grew capacity quite a bit from Q4 2020 to Q1 2021, and demand did not show up.

It's not materialized.

So we had to pull back.

So that's kind of the things we're dealing with in this pandemic.

So it's always good for demand to remain strong, and that's kind of what we're hoping or what we're seeing right now.

In terms of labor, we think we're okay.

We are about in the next maybe 1.5 months or 2 months, we would have brought back, from furlough, all of our pilots.

We have already brought back all of our flight attendants, and we're even rehiring a flight attendants that took voluntary programs.

And after that, group will start hiring new flight attendants.

So in pilots, we will soon bring back everyone that was in furlough.

We have pilots that (inaudible) volumes are relieved.

We've contacted them and a high percent of them is willing to come back.

And we're also strengthening our own in-house pilot academy.

So we're growing that also.

So right now, we feel we're fine in that respect.

But again, we're always cautious and always alert because this pandemic is always full of surprises.

Duane, flexibility is key in all aspects.

That's the way that we've been managing it for the last 12 months.

That's all very fair.

And if I could just ask maybe a little follow-up on the folks that are coming back from voluntary leave.

When you reach out, when you call them, when you e-mail them and say, "Hey, let's get back, demand is recovering," is the rate at which they are productive, consistent with your expectations?

Yes, totally.

And we have a very, very strong training center, and we have very good instructors and they're dedicated and committed.

And if someone is not up to par, then that person won't pass the filters.

So the people that joined the company are always at the highest levels.

And our next question is from Bruno Amorim of Goldman Sachs.

Congratulations on the performance this quarter.

So I just have a very quick follow-up on the cost performance.

We saw wage salaries down by 40% versus the third quarter of 2019, which implies that on a per ASM basis, this number is around 13% below precrisis levels.

So considering everything that was discussed, the potential increase in bonuses and everything going forward, do you still expect for this cost line on a per ASM basis should be below pre-crisis levels on a sustainable basis or not?

Yes.

Our expectation is that it would remain below pre-pandemic levels.

It mostly -- will mostly come from overhead adjustments and operational efficiencies.

As we grow ASMs and flights, we will increase overhead but we hope that we will increase capacity by a higher percentage so we can keep that relation we have right now.

And again, even if it changes somewhat and it will probably change with the performance bonuses and some of the people we need to bring back, it will still be below pre-pandemic levels.

And if I may just a follow-up on the competitive environment, what can you comment on what are you seeing from your competitors, maybe new initiatives from players who were maybe not direct competitors in the past?

I know you don't comment on a specific case, but if you can comment broadly what are you seeing from a competitive landscape perspective, that would be great.

Okay.

There's quite a bit of action, I would say.

We try not to advertise our competitors, but there is action in the region from -- especially from either new entrants or not new entrants, but new entrants to the region, to some of the markets (inaudible).

So there's quite a bit of activity.

That's -- it's a reason why we've always been so focused on our unit cost, and we always bet that having our unit costs as low as possible and below any full service (inaudible) very close to low-cost carriers is the key to future success.

And that combined with our strong network which we're keeping strong and growing.

And everything else we do in terms of having world-leading on-time performance and a strong product, we think that's the key to our success.

We have a very strong hub in the best geographic position.

And if we do all the other things or if we continue to do everything else correctly, we should be able to succeed in the future even under new competition, which is something that we've always had to deal with.

And our next question is from Pablo Monsivais of Barclays.

I have kind of a follow-up question on the revenue side.

I am very curious to learn what type of passengers or the demand segment is driving such strong performance?

Is it your leisure-driven?

It's perhaps vaccine tourism or corporate is coming back quicker than expected?

What is driving this result?

And also going forward, do you think that, for example, if you're thinking about leisure, how leisure would look like when we return to normal, perhaps in the first half of next year?

Yes.

Pablo, I would say that the big drivers are our leisure and VFR traffic more so in business.

Before the pandemic, you could argue that the breakdown of traffic for us was about 1/3 each segment, and that's it now.

There's probably more of a 40% leisure, 40% VFR and about 20% business.

So the business is off versus where it was before.

But it isn't a vaccine tourism anymore.

Vaccine tourism, at least, in our region, occurred, I want to say, back in the second quarter.

Today, it's more just real leisure of people wanting to go on a vacation after being locked up for a long period of time.

So that's kind of what we're seeing in terms of the patterns.

And for example, thinking about that leisure market driving demand, if we take into consideration a higher inflation in the region and weaker currencies, should we expect that this demand from mature market is sustainable for 2022?

It is what we're seeing right now.

We are seeing no signs of demand slowing down, and we think we're going to stay on this path, at least, that's how we're seeing it right now when we look at future bookings.

And our next question is from Josh Milberg of Morgan Stanley.

I had a follow-up on the issue of competition and wanted to ask if you could comment on how much your yields have been helped by either U.S. carriers or regional ones bringing capacity back at a slower pace than you guys on overlapping routes?

And then a related one is also, I believe that Avianca's new CEO made comments in the press recently that, that airline is shifting to a point-to-point strategy.

And just wanted to hear your views on the relevance of that announcement for Copa?

Yes.

So they have announced -- I mean U.S. carriers have brought up -- have brought back capacity to a higher level than pre pandemic.

So most, if not all, U.S. carriers are offering more ASMs now than what they offered in 2019.

I'm talking in Latin America.

Some of the major hub and spoke carriers that went -- or are going through Chapter 11 procedure, so they are below but then everyone else is above 2019.

So it's a mixture there.

Yes, Avianca, as you mentioned, made declarations and I think they even kind of publish their Chapter 11 exit plan or something.

And it's going to be more of a low-cost strategy with densified planes, point-to-point service and lower yields.

So yes, we've heard that, and we're confident that we will be able to maintain our cost advantage and be able to compete under any scenario, and we are prepared for that.

And we're preparing further for that kind of competitive environment.

And our next question is from Stephen Trent of Citi.

The first one is actually kind of a follow-up to Pablo's question.

When we think about the stickiness on the fare side, especially, let's say, on some of your low-density routes, is there -- is it fair to say that there's still so much pent-up demand that you are seeing very good fare pass-through even on non-business travelers?

What we're seeing right now, I'm not sure I would call it pent-up demand.

What we're seeing is that people want to fly and travel like they did before the pandemic.

And in a way, it's been surprising to the degree that this is going on.

But we are not seeing the fear of traveling that we expected maybe a 1 year ago or 9 months ago, and I think it's just regular demand.

It's just people going about their business, going about their lives and just getting out and traveling as much as they can afford or they want to or so I will not call it pent-up demand right now.

Okay.

Very helpful, Pedro.

And as my follow-up, just very quickly.

I appreciate the color on 2022.

Any high-level view for next year how many flight banks you guys might be running out of (inaudible)?

Or it's still too early to say?

Well, we run 6 flight banks, and I don't think that's going to change.

We've been doing it for a while.

We're still not all the way back to the number of flights we had pre-pandemic.

We still have to restart a number of destinations, and that will happen throughout the year 2022.

So I think 2022 is a year where we need to get back to what we were in 2019 in terms of the size of the hub, the connectivity, the number of flights.

So that kind of what we'll be doing most of the year.

And always looking for new opportunities from the hub as well.

As we mentioned in this quarter as well, we're adding cities into the network that are interesting and unique.

And our last question is from Dan McKenzie of Seaport Global.

Just following up on that last question on pent-up demand, I think the rule of thumb historically in Latin America has been 2x GDP.

And are you thinking that once things normalize, it might still be 2x or could pent-up demand drive it something higher to, like, say, 3x or even higher than 3x?

So it's -- I think, an it's early to say where it lined up.

But I think if you look at the macroeconomic factors, the economies are in a particular level where, yes, I think air travel demand will grow eventually at 2x to 3x GDP growth.

I think that level where the Latin American economies are still maintains itself after COVID.

So yes, in the longer term, I think that -- I believe that's going to be the case.

COVID is not over yet.

That's the thing, right?

You have to be mindful that it's still an environment that might have some movement or volatility over the next several months.

Yes.

And that actually gets to my next question here, and it just sort of ties to operations for the current quarter and how you've been managing operations over the pandemic.

And with respect to the current quarter, I'm just wondering how the network plans have evolved?

So I'm looking at Brazil, I've seen some cuts to Brazil, for example.

So it looks like you're managing flights based on demand, trimming when you need to adding where you can.

So again, it doesn't look like it's new to the quarter, but where I'm going with this is, do the changes weigh on profitability?

Or do they actually help with profitability?

I would say that we're looking at it very carefully, almost constantly.

But I think that we are always looking for the opportunities to improve on our profitability, (inaudible) building back the network.

I think the key factor here is ensuring that we build a network as quickly and as effectively as we can.

That's -- to get to a point where the sort of capacity of the network is as close to where it was prior to the pandemic.

That's, I think, the driving factor that we're looking at.

And then what we're saying is, which is true.

It's also a result of what I was saying earlier about the difficulty in predicting what's ahead during this time.

So we've had to make more changes and adjustments along the way that we're used to.

Hopefully, in the next few quarters, we'll be able to have a more predictable and stable operation and just stick to it.

Yes.

Understood.

If I could just squeeze one last one in here.

Mike, and I actually had the same question on [Dream seats] here.

And so I guess if I could just elaborate on that question.

I'm just wondering if today, you're selling it as an actual lie-flat first class seat or just simply as a generic business class seat at this point?

And I guess, if you're not really selling it as a flagship product, what is the time frame for when you might feel like you're ready to go live with that?

No, we do sell it.

We do sell it for a premium when we can guarantee it in every flight in a given market.

So there's a few markets where we can already do that.

It all depends on the number of (inaudible) we're operating.

So as we get more MAX 9, we add a number of markets.

Right now, it's probably somewhere around 5 markets, I think.

Yes, like 4 or 5 markets where we guarantee the Dreams product.

And in those cases, there is a premium we charge for the product.

Yes, there are no further questions.

Do you have any closing remarks?

Okay.

Thank you, operator, and thank you all.

This concludes our earnings call.

Thank you for being with us.

Thank you for your continued support.

Have a great day, and we'll see you in the next one.

Thank you, all.

Thank you.

Ladies and gentlemen, thank you for your participation.

That concludes the presentation.

You may now disconnect, and have a wonderful day.