Financial Data and Key Metrics Changes - Adjusted EBITDA margin reached 31%, the highest on record, while operating margin was 17%, representing the second strongest annual performance in the company's history [7] - Total revenue for 2025 was $5.4 billion, a 2% increase over 2024, excluding extraordinary non-recurring items [19] - Adjusted EBITDA for the full year reached $1.7 billion with a 31% margin, the highest margin in the company's history [20] - Full year operating income was $928 million, with a 17% margin, the second-best annual performance in the company's history [21] Business Line Data and Key Metrics Changes - Passenger revenue declined 4.4% year-over-year for the full year 2025, but increased by 4.3% year-over-year in the fourth quarter [13][14] - Premium revenue now represents approximately 42% of total revenues, nearly 17 points above pre-pandemic levels [10] - Premium unit revenue growth was 6 points above the main cabin on a year-over-year basis in the fourth quarter [15] Market Data and Key Metrics Changes - Demand strengthened in the second half of 2025, particularly in the last quarter, supported by improving traffic trends across both domestic and international markets [7] - The U.S. market saw passenger unit revenue up 5% year-over-year in the fourth quarter [14] - Corporate and high-income leisure segments continued to perform strongly, contributing to the overall revenue growth [10] Company Strategy and Development Direction - The company plans to grow capacity around 4% with a disciplined approach, focusing on resilient markets and prioritizing profitability [10] - Aeroméxico is selectively expanding its long-haul network, launching new routes to Barcelona and Paris [10] - The company aims to enhance customer experience through investments in technology and infrastructure, including a new app and improved check-in models [8][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changes and capture opportunities, expecting to build on the momentum generated in the second half of 2025 [9] - The Mexican economy is expected to grow between 1.2% and 1.5% in 2026, which supports the company's growth expectations [24] - The company anticipates revenue growth in the range of 7.5%-9.5% for 2026, with adjusted EBITDA margins expected between 28.5% and 30.5% [24] Other Important Information - Aeroméxico was recognized as the world's most on-time airline for the second consecutive year [8] - The company returned over $200 million to shareholders through capital disbursements in 2025 [23] - Cash and cash equivalents totaled $1 billion as of December 31, with total liquidity standing at approximately $1.2 billion [23] Q&A Session Summary Question: Demand impacts related to FX and purchasing power dynamics in Mexico - Management noted that a stronger Mexican peso typically leads to increased demand for travel, with historical trends showing a quick response in bookings [29][31] Question: Opportunities for deleveraging the business - Management indicated that the main opportunity for deleveraging comes from the present value of leases, with expectations of lower leverage through higher EBITDA and amortization of lease debt [33][35] Question: Sale of MRO joint venture and its impact on P&L - The MRO facility was sold to a third party, resulting in a profit of $71 million in the P&L, with maintenance operations continuing under a commercial agreement [40][42] Question: Regulatory situation regarding U.S. routes from Mexico City - Management confirmed that new routes cannot be added until the U.S. government lifts restrictions, but noted that existing capacity has grown significantly in recent years [65] Question: Guidance assumptions for FX and jet fuel prices - The company assumes an average exchange rate of around 18.3 pesos per dollar and a fuel price of approximately $69 per barrel for guidance [58] Question: Premium revenue growth expectations - Management expects continued growth in premium revenue, driven by consumer demand for better experiences and improved sales strategies [79]
Grupo Aeromexico(AERO) - 2025 Q4 - Earnings Call Transcript