🧾 What This Document Is

This is a 6-K filing, which is a current report U.S.-listed foreign companies must file with the SEC to share material news. This specific filing contains Grupo Aeroméxico's first-quarter 2026 earnings release (Exhibit 99.1), plus their monthly traffic reports for February and March 2026 (Exhibits 99.3 & 99.4). Think of it as the company's official quarterly report card and operational update for investors.

🏢 What The Company Does

👉 In simple terms, Grupo Aeroméxico is Mexico's flagship airline. It's a holding company whose subsidiaries run commercial passenger flights and manage a loyalty program. They operate out of Mexico City, flying a network across Mexico, the Americas, Europe, and Asia. They're a founding member of the SkyTeam alliance (partnering with airlines like Delta and Air France). Their fleet includes modern Boeing 787s, Boeing 737s, and Embraer 190 jets.

💰 Financial Highlights: A Mixed Picture

The first quarter of 2026 showed strong top-line growth but pressure on profitability.

Revenue is Soaring 🚀

• Total Revenue: $1.34 billion, up 13.3% from the same quarter last year.
• Why it grew: Demand for travel remained strong, and they earned more per passenger by focusing on premium cabin seats and services. The strengthening of the Mexican peso also helped when converting revenue to U.S. dollars.
• Premium Revenue: Sales from first/business class and premium economy made up 42% of all passenger revenue, showing their high-end strategy is working.

Profit Margins are Under Pressure ⚠️

• Adjusted EBITDAR: A key profit measure came in at $335.8 million. Its margin (EBITDAR as a % of revenue) was 25.0%, down 2 percentage points from last year.
• Operating Income: $141.8 million, with an operating margin of 10.6%, also down slightly from the prior year.
• The Main Culprit: Fuel costs. The price per liter of jet fuel jumped 13.1% year-over-year. At the same time, other costs like labor and aircraft ownership expenses also rose.

📊 The Cost Challenge: Fuel & The Peso

This section explains why profits didn't grow as fast as revenue.

• Fuel is Expensive: The average fuel cost was 77¢ per liter (up from 68¢). Global geopolitical events pushed prices higher.
• Cost Per Mile Rises: The cost to fly one seat one mile, excluding fuel (CASM-Ex), was 10.2¢, up 17.8%. This was driven by:
  • A stronger Mexican peso (which makes local costs like salaries more expensive in USD).
  • Higher labor costs from inflation adjustments.
  • More depreciation from adding new planes to their fleet in 2025.

💸 Cash & Debt: A Solid Foundation

Despite the cost pressures, the company's financial health looks stable.

• Cash on Hand: They had $1.0 billion in cash and short-term investments.
• Total Liquidity: Including a credit facility, total liquidity reached $1.2 billion. This is equal to 23% of their last twelve months of revenue—a healthy cushion.
• Debt Management: Their net debt-to-profit (EBITDAR) ratio improved slightly to 1.7x from 1.8x last quarter. They generated $200.6 million in cash from operations and used it to repay some debt.

✈️ Operations & Traffic: Smaller but More Efficient

The airline flew slightly less but filled its planes better.

• Capacity (ASMs): Decreased 1.2% year-over-year. They are intentionally managing capacity carefully, especially on domestic routes.
• Load Factor: The percentage of seats filled with paying passengers increased to 84.4% for Q1 (up from 82.3%). This shows strong demand relative to the seats offered.
• Fleet: They ended March with 166 aircraft after receiving one new Boeing 787-9.

🔮 What's Next: Guidance for Q2 2026

Management provided a forecast for the next quarter (April-June 2026), signaling they expect continued growth but also ongoing cost challenges.

• Capacity: They plan to increase flights slightly (~1.5% to 2.5%).
• Revenue: They expect $1.47 billion to $1.52 billion, which would be 12.5% to 15.5% growth year-over-year.
• Profitability: They guide for an Adjusted EBITDAR margin between 17.0% and 20.0%, which is lower than Q1's 25%. This suggests they anticipate fuel costs and other expenses to remain a significant headwind.

⚖️ Big Picture: Strengths & Risks

👍 Strengths:

• Strong Brand & Demand: As Mexico's flagship carrier, they command premium pricing and have resilient demand, especially in international markets.
• Operational Excellence: They were recognized by Cirium as the world's most on-time airline for Q1 2026.
• Flexible Model: Management emphasizes their ability to quickly adjust capacity and network to match demand volatility.

⚠️ Risks:

• Fuel Price Volatility: This is the biggest and most immediate threat to profitability, directly impacted by global events.
• Currency Fluctuations: As a Mexican company with USD reporting, a stronger peso hurts their cost structure when translated to dollars.
• Geopolitical & Local Disruptions: The CEO mentioned "localized disruptions" in February that affected demand in some Mexican regions and U.S. transborder markets.

🧠 The Analogy

Running Aeroméxico right now is like managing a popular, high-end restaurant. More customers are coming in and ordering the expensive chef's tasting menu (higher revenue & premium mix). But the cost of key ingredients like prime steak and truffles has skyrocketed (fuel costs). The restaurant is also paying its skilled chefs more (labor inflation). So, even though the dining room is full and bustling, the owner's take-home profit margin is being squeezed. They're responding by carefully managing the number of tables open (capacity discipline) and hoping ingredient prices stabilize.

🧩 Final Takeaway

Aeroméxico delivered strong revenue growth in Q1 2026 thanks to robust travel demand and a successful premium strategy. However, surging fuel costs and other inflationary pressures significantly squeezed profit margins. The company remains operationally excellent and financially solvent with ample liquidity, but its near-term profitability is heavily tied to the volatile price of jet fuel.