Good morning, everyone. Thank you for your availability today on our earnings call.

This morning, we publish our third quarter earnings release and a presentation on GOL’s Investor Relation websites. So, we will just make a few brief comments here and get straight to your questions.

The third quarter was another solid milestone to demonstrate that GOL’s, strategy and execution in adding profitable growth is generating consistent results as we expected. This has been achieved by the trust we have obtained from our customers, investors, suppliers, lessors, and in particular our teams who have done an impressive job and whose dedication has been the key factor that continues to drive us in this space of recovery.

Between July and September, GOL transported more than 8 million passengers in more than 57,000 departures. This represents a year-over-year increase of 16% and 13% respectively.

We continue to launch and inaugurate new base in the regional market such as cities as Uberaba, Minas Gerais and Araçatuba in São Paulo. In the international markets, we increase our ASK supply by 5% mainly in South American markets compared to the third quarter of 2022.

We continue on our discipline path to profitable capacity recover as can be seen, the 2.4 percentage point increase in our load factor while our aircraft utilization rate increased it by 2% to 11.3 hours per day. Yield grew 4.5% in the period while our PRASK is up by 7.6% and our RASK increased 10.7%.

This demonstrates the potential we have been achievement through the initiatives to diversify other revenues with Smiles and Gollog businesses. The first Smiles which has a directly relationship with the perception of a better flight experience expanded its customer base by more than 80% year-over-year and reached more than BRL1 billion in revenue.

Our Gollog cargo unit more than doubled its revenue even with our organic capacity still constraint by this lower pace supply of our passenger aircraft's fleet. We have further expanded our partnership with Mercado Libre, which has already provided Gollog with a leadership in cargo volume shares in tones per kilometer, and we have been exploring new opportunities for cargo synergies between the dedicated fleet of freighters and the space in the cargo pallet of the GOL’s aircraft.

In addition, this partnership has the option to expand up to 6 more incremental aircraft reaching a fleet of up to 12 aircraft in the coming years. This quarter, we also maintain the growth pace of our tour operator Smiles Viagens launched at last quarter, which at this moment in addition to expanding its portfolio of products and partnerships has also been expanding directly negotiations with hotels, which are already added to more than 800 distribution agents in the Brazilian and international segments.

Combine it, all the revenues represents a 65% year-over-year increase to BRL413 million. For another consecutive quarter, we achieve a record revenues for a third quarter of BRL4.7 billion with an EBIT operating margin of 17.7%, an increase of more than 11 percentage points comparing to the previous years, positioning GOL among the companies with the best operating performance in the sector.

The activities of our network and positioning in the main markets of high traffic and demand for leisure and business segments, has been the main differentiator for our revenue performance. As corporate demand speaks up, the number of takeoffs has increased it by 13% with a reduction in the average 10th length of 7.5%, and which has impact on our cost.

Our CASK field for passenger operation increased 4.9% comparing to third quarter 2022, mainly due to return of four aircraft this quarter, and lowered dilution of our fixed costs that are still impacted by a number of non-operating aircraft that remain temporarily and in our fleet. Without the aircraft returns in this quarter, our CASK would represent stability in the same comparison even so we managed through our discipline capacity management to preserve profitability with yields that also increase in the same proportion with higher occupancy rates, which grew 2.4 points comparing to the previous year.

While our ASKs increased by 5.2% comparing to last year, they are still 19.3% lower comparing to third quarter 2019. In terms of operating fleet, we operated 108 aircraft in the third quarter 2023, while in the third quarter in ‘19 we had 115 operation aircraft 7 more than this quarter.

We are committed to increase the productivity of our fleet while we operate with temporarily low capacity and to incur in higher costs for returning operating aircraft. We expect a transitory impact of our ex-field costs to the levels higher than 2019 levels.

We are focused on resuming CapEx discipline. The rightsizing of our fleet, we will allow to deliver even higher levels of profitability and to optimize its low cost business model supported by higher aircraft utilization.

We believe this is an opportunity to upside in cost efficiencies that does not existent for our competitors who are already pushing to the upper end of their historical fleet utilization. The industry has been impacted by uncertainties in the schedule of delivers of new aircraft by manufacturers.

In our case of a total of 15 aircraft schedules for the year of 2023, GOL has so far added only one Neo 737 MAX8 aircraft to our passenger fleet. On another side, as part of our fleet renewed plan and recovery of our productivity and operation efficiency, we returned four 737NGs aircraft in this quarter and seven since the beginning of the year.

We will continue with the plan to replace NGs with MAX over the next few quarters. As part of the exclusive agreement with Mercado Libre for cargo transportation, we received the fifth 737-800BCF aircraft this quarter, and in the month of October, we received the sixth greater aircraft completing the commitment of six aircraft for the year 2023.

We have invested in improving our digital channels, which have reached the highest level of self-services. As capacity increase our fleet returns to 2019 levels, we believe that our dedication to cost efficient and our team's commitment to provide the best customer experience will reinforce GOL’s already consolidated competitive position in the market.

In terms of discipline and commitment to execute by the GOL team, we will continue on the right track with our plans to continue to be the benchmark for the lowest unit cost in the region. Excluding the effects of the freighter fleet, our total unit cost decreased by 9.5% comparing to last year.

The consistent results we have presented in recent quarters are important for the recovery in our cash flow from operating activities, which reached BRL0.9 billion in the quarter. Finally, we would also like to highlight that this October we renewed for another 10 years our exclusive commercial agreement with Air France-KLM, which represents the expansion of the co-share that will provide better connectivity to more than 125 destinations in Europe and Brazil, and also in the future, new destinations through Latin America.

This is strengthening of the partnership also provides for the enhancement of joint sales and more benefits for customers of GOL, Smiles and Air France-KLM, Flying Blue loyalty programs as well an expansion of the Air France-KLM workshop existing engine maintenance support for GOL’s CFM56 and LEAP engines. We are sure that the sum of the initiatives we have taken to increase our productivity will be fundamental to take GOL to a new level in the coming months.

I will now turn the floor to Mario who will represent some other highlights.

Thanks, Celso. I want first to start to thank our entire GOL team for this very incredible hard work and dedication during this quarter.

They have been doing excellent and tireless work to improve our operational efficiency in our client's experience, which has been reflected in the achievement of record net revenue in this Q3 and consistency of margins quarter-over-quarter, and even the EBIT and EBITDA margins reaching a strong levels of 17.7% and 26.8% respectively. Our EBITDA for the quarter was BRL1.25 billion while operating profit was BRL825 million.

Our yields and RASK also reached a record levels growing 4.5% and 10.7% respectively to BRL47.43. We reached BRL5.4 billion in sales volume this quarter demonstrating that future booking curves remain strong, and we have continuously high load factors.

Our demand in domestic market continues to grow consistently and resiliency. We had the best our GOL ever reported to ANAC with 8.2 million passenger support in Brazil.

In addition, business travel saw also 17.3% increase compared to the previous quarter and continues to improve consistently as companies continue to show return to office initiatives, with a comprehensive and proven business strategy together with the most-qualified team in the industry have created a healthy combination of capacity recovery and yield growth. Our total unit cost was decreased by approximately 8% year-over-year helped by the decrease in the jet fuel prices during this quarter.

We are committed to continue to deliver the best cost performance in the industry. We also this quarter completed two major liability management transactions.

The first one was related to the refinancing of a BRL1 billion batteries with the residual local banks, which resulted in a 30 months extension, as the new term now is June 26. And we have the support of those local debenture banks and allowing us to better adjustment of the debt to the GOL's growing cash flow.

The second was the completion of the conversion of BRL1.2 billion of SSNs, senior secured notes, into a convertible debt instrument, the ESSN, maturing in 2028 so no change in terms of the terms and condition of the SSN. In the middle of this process, a total of 992 million of GOL's warrants has been subscribed and has been issued, which may be converted into shares in the future at an exercise price of BRL5.82 per share, which would result in a pro forma bill in a reduction of approximately BRL6 billion in gross total indebtedness, the total leverage.

Strengthening our balance sheet remains our top priority. Our fundamentals continue to improve as we reduced our leverage to 4x, as of September 30th this year, this third quarter from 9.5x by the end of last year.

So, it's almost 5x a reduction in terms of leverage. Many impacted or contributed by the recovery in our EBITDA, and the reduction of net debt in this period.

To conclude my highlights and in order to provide the usual transparency to our investors, we are predating our financial outlook for this year, 2023, reflecting the nine months results that has been already delivered with a more challenging scenario for fuel costs for 4Q ‘23 that practically offset the benefit generating throughout the second quarter ‘23 mostly, and also the impacts on capacity derived from the quarantine certainty in our fleet plan that generate a lower dilution in our fixed cost especially on the CASK ex-fuel impact for the four 4Q ‘23. Now I return the floor to Celso.

Thank you, Mario. We will maintain our dedication to initiatives that promote a broader diversification of revenue sources, and above all, those that lead to improvements in productivity and efficiency.

Our operation continues to build on the solid foundations we have established in the recent years and our commitment to provide reliability, profitability, and strengthening our balance sheet. Our business model has proven to be robust with a strong track records of execution and industry leadership.

We are confident in our ability to deliver significant improvements, particularly in capturing upsides for reduction of our ex-fuel CASK. So to conclude, I would like to thank our Eagles team for the new record on revenues that higher margins and the excellent experience they provide daily to our customers.

I'm extremely proud of this team's roles in rebuilding the best performing airline in the region. Their dedication is what continues to prop us to the top.

Carrey, you can start the Q&A cap question.

Just on the utilization front given that there's so much opportunity there. I was wondering if you could talk a little bit more about the biggest impediments to getting that utilization back to 12 hours and your kind of visibility on how you get there?

Hi, Savi. Good morning.

It's Celso. Thank you for your question.

And as you know, we are working hard to achieve, let's say, the numbers that we are -- we used to fly, 12 hours per day, and we are almost there with the existing fleet. We still have some planes more planes that we normally have in maintenance lines.

We used to have four maintenance lines. Now we have up to eight depending on the quarter.

And so, this is one of the hurdles we are facing as well. We are now focused in this quarter specifically the third quarter is where we reduce the extent length.

We concentrate a lot of the operation in the short haul to make sure we would be able to fly the customer, the corporate customer's traffic. But as we go to the fourth quarter, we start to increase the red-eye flights increase the strength length and especially now with the changes in Santos Dumont to Galeao that we are anticipating even though we need to change in January, but we are anticipating to November, December.

We want to increase the utilization of those planes for above 14 hours, which will drive our average to the 12 hours that you're mentioned.

And that explains why the ASKs are increased kind of unchanged there. If I may, just on your partnership with Air France-KLM, is there significant changes from the agreement that was there before and or tied to that, like what happens to some of the partnerships that you had to Europe such as with tap?

Does that kind of get excluded with the new partnership?

No, we are not explaining any additional curve out of what we already have. I mean, what we have with Air France-KLM is very special.

We have been building long-term projects together is not only a co-share. We are working for them to develop new gateways in Brazil, also making sure that we provide more connectivity.

Now in Rio, we are reinforcing this by growing the Beyonce in Rio International. One of the main difference, it's not on the commercial passenger side.

It's more on the MRO side that we increase, let's say, our contract with them for the next years to have more slots and also give access to maintenance for our NG CFM56 engines and also the Leap. I think that's a big change that we come in a good time for us.

So no kind of change to your other partnerships that are existing?

Not.

Hopefully, you can hear me. Just following-up on Savi's question here, if we're just kind of to approach that from a different perspective, what percent of the CASK ex-fuel eventually goes away when the structural overhead that you're carrying today normalizes?

So for example, the excess pilots versus what you can fly the eight lines of maintenance that eventually would potentially get to four. And then if you could just clarify sort of a timeline for when you might think this could normalize.

Is it sometime in 2024 or is it more realistic to assume that it's probably going to be closer to 2025 sometime?

Very good question. And as I was explaining here this morning, we expect to have a higher cost tax feel for temporarily and to address, I mean, all the fleet constraints we have on the engine side, but also on the delivery side and primarily on the delivery side.

Like you saw, we took delivered of one MAX out of the 15 and we may take… [Technical Difficulty]

I think we had a problem with our connection.

I can hear you now. Terrific.

Sorry. We had a problem with my connection here.

And so as I explained in my first comments here, we are going to face a temporal increase in our CASK ex-fuel for at least 12 months. So, we expect to reach the level of productivities only by half of next year.

As you said, we have this drag of fixed cost, which is not related to crew because in Brazil we have a variable payment and we have a good agreement with our crew. So, we can fly more or fly a little bit less, not too much less like in the pandemic, but we can fly a little bit less with our crew and we can accommodate this situation for let's say six to nine months.

We expect to have, let's say, the right ASKs production with our existing fleet by third quarter next year with the same levels of cost ex-fuel that we have in 2019. It is not only on the CASK that you see the inefficiencies it is also on the lease payments.

So, if you look at the lease payments, we still have 20 aircraft on the ground. This is the biggest drag that we have at this moment.

And let me add one point as well. Because of that constraints related to capacity, if you look what they have been doing especially in order to recover the efficiency of fleet, we are returning more, a higher number of aircraft in order to reduce that level of, let's say, aircraft that is currently not under operation.

So this number came from something around 30 to 40 aircraft, since by the end of pandemic and now is a number that is lower than 20, but it is still, as mentioned said, we have some inefficient on the cash flow because we are paying some of the leases that is either is not producing profit, right? So, that is something that we are planning to be able to reduce until the end of next year.

Potential is not going to be producing, let's say, all the revenue profitability, are ready within the next year, but that is going to be preparing the Company for entering 2025, without any leakage on that. And the constraint on the fleet as well is that, we are probably going to be acted by temporarily unique costs that's going to be a little bit higher given the causes associated to return on the on the aircraft.

And at the same time, we’re not extracting gains for potential new deliveries that used to have, if we receive all the deliveries according to the original plan. So basically, we have been very committed to drive the unit cost, the CASK in U.S.

dollars to a similar level 2019. If you look to this quarter, maybe it is about $0.5 in U.S.

dollar of CASK that is deviated, mostly related to that capacity constraint. If you remember in the first guidance that we provided, we are expecting to increase more towards to 15% to 20% of ASKs this year, and now we are reducing to maybe a low end of, low double-digits area.

So that's, of course, that impacts, most of that cost because there is some limitation on what we can do in terms of reducing the fixed cost. And given the uncertainty, of course, this is structural overhead.

It is something that's temporarily, but it is that there is no a lot of room to reduce until, we have a more clear view of what's going be happen in the future. And if you look to the baseline, the Company is generating a healthy profit a healthy EBITDA, that's why it means that for every aircraft that we are going to be adding back to the operation, we are going to be creating additional EBITDA, additional cash flow that can help, of course, the next coming year cash flow in order to address higher CapEx going forward.

Thank you for that answer. And just following up on that last point, Mario, as we think about 2024, as we think about some of these structural costs going away, what is the level of EBITDA next year that gets you to say free cash flow breakeven just based on the CapEx that you are looking at?

So I am not asking for a forecast, I am just trying to get a sense the hurdle rate for generating cash next year. And then, just kind of as a follow on to that to what extent is GOL's loyalty program, unencumbered currently and could it be used as a source of refinancing future debt that comes due in 2025?

Sure. For your first question, if you look this year, even with the EBITDA margin that we are providing, now GOL is reaching a neutral cash flow for the ongoing operations arrive.

So for the current obligation, we can cover not only all the necessity related to the P&L, but also the CapEx for the ongoing operation. Of course, one of the main challenges right now is how we can address the balance sheet issues, right, and also, the CapEx that has been remained from the previous years.

So some of the engines that you need to cover also this lack of new aircraft that was going to be supposed to be delivered, that that's the impact on the cash flow. And the main problem, especially in this year was not the level of what GOL can generate in terms of digital, but also the lack of credit of availability, especially during the first half of the year.

That is something that we are working in order to establish that credit capacity, especially for the CapEx. That has been one of the important sources that we have been able to create as financing support in the previous years.

So the point is that, going forward, if you can consider that the recovering capacity can help the Company in order to start to dilute fix the cost and also to drive the CASK ex-fuel going down. At the same time, the market is still very aligned in terms of the discipline of continue to keep yields and fares in a sustainable way.

That's going to be a natural expansion in terms of EBITDA. If you look prior to 2018 was a number that's much closer to 28%, 29% to 30%.

So, we don't expect that the death recovery is going to be taken so fast. So maybe 1 percentage point every single year is something that is reasonable, if you think that we can add capacity in conjunction to yield preservation going forward, and that definitely, if we resolve thatabout15 to 20 idle aircraft in our fleet and put that back on operation producing that EBITDA the level that it has been healthy definitely that can add as additional source in order to handle the CapEx going forward.

Yes. If I had to squeeze one last quick one in here that the 15 MAXs that we're planned for this year, the final expectation for 2023, if you could just remind us, and are those all going to get bunched into 2024?

Or are there additional discussions with Boeing at this point for either additional compensation or for a kind of a re-pacing of the order book?

Yes. Hey, Dan, sorry, I was answering your question and I had a connectivity problem.

I was answering exactly this, and we had -- we took delivery of one plane and we expect to take delivery of at least additional four until the end of the year. That's what we are working really close to Boeing now to -- it's like a kind of a -- almost every day call to make sure that we take this capacity, which is now a little bit to the right of what we were expecting on the fourth quarter.

And our main discussion today is how can we make sure that we, I mean, we catch up, as soon as possible next year on the delivers because today the MAX -- the best case scenario today is to take five out of 15. So, we need the extra 10 sooner than later at the beginning of the year.

And this is what we are discussing with Dan. No answer yet.

I have two from our side. The first one relates to the guidance you guys updated.

So we were just wondering if you could help us reconcile the downward revision in net revenue guidance. If you were to take into account your capacity guidance for the year and your new net revenue guidance this implies on a deterioration quite it over quarter in RASK in 4Q.

So, I'm just trying to understand to what do you attribute this worsening? And the second question is related to the new exchangeable senior convertible notes.

If you could just help us with the calculations to the 3.9 billion you guys recognizes as a derivative liability? Those are my two questions.

So the first one, let me ask you first the exchangeable first. So, this quarter, we issued the SSN right that it converted about $1.2 billion of from the previous SSN.

And if you look to the financial statements, you still have some portion around $100 million of SSN that has still not been converted and is still sitting in the balance sheet. So you still have those two instruments in the balance sheet.

But the major portion of the SSN has been already converted. And we followed by the IFRS accounting rule by converting into a SSN that is a convertible instrument, we need to split out two components.

So first is the adapt portion what is going to be the fair value of that portion. And the second is to value what is going to be the implicit option, the embedded option because this is a convertible instrument.

There's going to be splitted in a different line of the balance sheet. So, you see that in the loans and financings, the regional SSN now is recorded BRL3.4 billion.

So, it's about $680 million. And the separate component that's related to that derivative is splitting in another line.

So, we are just following what is required in terms of accounting rule because this is kind of a convertible instrument. And of course, by the end of the material or conversion or even in the material of this debt the lender the Abra will continue to collect the same 1.2 billion.

So, but the books tended to reflect the time value for this option feature. So, if you add the two components in aggregate, you're probably going to take the same amount.

And this fair value of the option will be value each quarter. But that's already reflected kind of a derivative instrument that go against the equity.

That's why it is not considered as a dept anymore. Does that answer your this last question for you?

Yes, super clear.

And the second was related to the guidance, right? So, if you look to what we did specifically, everything was correlated to the fact that we reduced the number of operating fleet.

And that was a result of that impact that we answered in the previous questions related to the lower number of MAX to be delivered. At the same time, we are still keeping the same rate of deliveries that that's one of the main efforts that we are implementing in order to reduce that gap with between the total fleet and the operating fleet.

So, the reducing in terms of new deliveries has been reducing the number of ASKs, actually, the ASKs didn't change, but because we were in the middle end of ASK and now we're moving much more into low end. But you can see that in terms of seats and also departures, we were in the low end and now we reduce that guidance related to seats.

So, we are considering less departures and of course that is been impacting a lower number of revenue. You mentioned about RASK.

We expect that yields is going to be more stable, but at the same time, RASK, that is related to the contribution from loyalty and also from cargo, especially cargo because of the reduction in terms of the ASKS, so the capacity on the value of the aircraft also going to be impacted. And if you look to especially the revenue performance for this quarter, even though yields has been increased by 4.5% quarter year-over-year.

The RASK increase about 11% and has been mainly driven by the ancillary revenues. That potential impact in terms of capacity will be also lower.

The contribution on the RASK coming from ancillary revenues going forward, and that's why you have a lower revenue increase in the guidance.

Thank you very much guys, super clear, and just if I may, just a follow-up on the secured notes. If I am not mistaken, you guys have not drawn everything you could draw from the BRL450 million in cash you could do.

Could you just update us on how much have you guys already withdrawn with the SSN?? And how much is left?

Thank you.

Until the second quarter it was around BRL200 million that has been drawn, that's why we convert from the up to BRL1.4 billion of the SSN. We have been converting something about BRL1.2 billion.

In this quarter, we utilized primarily for the CapEx essential activities like acquisition of spare parts or something additional BRL50 million roughly.

I have two questions here. The first one, you mentioned in the presentation that you have six options for cargo freighters for 2024.

So my first question is. What do we make you exercise these options, I mean, can resume that maybe you can announce a bid contract maybe in Q4 or next year to tweak these options?

And the second one is related to the leasing contracts. In the income statement, I think that you book like a BRL60 million of gains with leasing negotiations.

So, can you give additional details about this? Thank you.

Hi, Victor, good morning. So, on the cargo options that we have, we are -- the first commitment was the six aircraft and the number six is now arrived in October.

And from the seventh to the 12th, we go one-by-one, we don't need to go like an additional six. And this is what we are working close to Mercado Libre to understand the demand environment.

And, of course, they do their forecast, and we are working to make sure that until the end of this year, we have a clear picture because we need to commit well in advance with those planes. So, we are working with lessors especially on our returns.

If we can combine at lease return that we have on our existing passenger fleet to a conversion into cargo, that's the best thing for us and for Mercado Libre, and this is what we did, by the way, in the six airplanes that we have. So, we are discussing right now with the lessors those options to make sure that we can start receiving those planes by second quarter next year.

We will go one-by-one. I am sure it's going be more than six, but it's still early to say, how many out of the 12 that we have.

And on the second questions that you raised, the gain was related to sales backs that we did the only agents and also in one of the MAX that we received. So, we used to have finance, leases on some engines that we turn into operating leases, during the quarter.

You guys have already answered one of my questions, but the other one I wanted to ask is what sort of flow are you seeing from American Airlines?

Good morning, Jay. We are I mean constantly reviewing how can we improve the partnership with Americans that has been very strong since we signed that deal.

And we are happy that American has now increased the capacity speak to Brazil. So especially we have been feeding them a lot from Guarulhos, which is the main gateway.

But we didn't have a great network so far in Rio International. And from this winter season and on, we are going to provide, let's say a sizable beyond points from Rio International.

And I'm sure that we will be contributing a lot to the American airline flights in Brazil. And they will probably stay with their flights for in the future.

They have seasonal flights and for now, and I'm sure they will be seeing a lot of traffic going from GOL. We have with then the highest contribution that we already have with a partner in this corridor, which is more than 35% connectivity in most of their flights.

So, it's pretty strong. It's pretty strong.

Also, on the frequent flyer in both frequent flyers, our customers are now really understanding the partnership and flying with us, flying with them advantages miles. And so, we foresee that the flows will continue to increase during next year.

That's super helpful. Thanks so much.

Okay. Just before the operator going back to the other self-analyst that wanted to have a question, we received some questions on the webcast platform.

So I will be handling some of those questions. So first one was coming from Matt from one of our investors.

Can you discuss the youth environment and the competitive landscape? So I would refer to Celso to respond that one.

Yes. Thank you, Mario.

And I think all the industry now has some sort of hurdle in to grow capacity. And no matter the fleet in our case, we mentioned a lot of the constraints we have right now.

And we are facing a very rational environment in terms of yielding -- yield and how the industry is behaving. We expect the yields to stay at this level we don't, of course, it's not our goal to increase fares.

We want to grow again, bring back planes back to the operation, be more productive with the fleet and give people better access to better fares. That's what we want.

But we see that especially in the next quarters, a very stable environment in the yields and a very rational industry, and potentially for the first time in many, many years in Brazil, and not only in Brazil, but also in the region. As we are expanding international, we are also seeing health yield on the regional international flights that we do.

Yes. And there's also another question from the webcast platform on.

Can you give us some details about the fuel cost hedge and what is the percentage of expected yields that is hedged? So, we generally as a more concentration of hedge during the short term, so we have for the next two quarters per 4Q and 1Q something around 30% to 40% hedge ratio.

That of course, hedge activities right now has been something especially here for the Brazil Airlines that is more costly. So, we have been focusing much more in terms of the cash users to the CapEx and to return the essential investments.

And we have been trying to select most costless instruments that can create some protection for the Company, especially in this kind of a very volatile environment, where we envision definitely for the four quarter. And that's one of the reasons why we kept the guidance for jet fuel per liter and change even though we have some benefit during the second and the third quarter.

But we started to see the prices on jet fuel for the four quarter, so beginning of four quarter and now October to stay higher than what is the level they produce. So ultimately that most of the benefits on the first let's say six months pr prior to this quarter is going to be somehow compensated offset by more upside risk on the oil price going forward.

But we have this strong yield environment, very disciplined in terms of the competitors that somehow create a lower pressure to being so much hatched. But we are much more concentrated in the next six months.

And that there's also one question that came from Deutsche as our sell-side, he's putting here in the webcast and also getting back to sales as well. With exclusivity with Air France-KLM, what does that mean for historical frequent flyer problem tied with TAP airport to go does that no longer exists?

Thank you for your question. And as I said, no changes in the TAP agreements Portugal that we have today, we -- TAP is a great partner.

They are, I mean, very big in Brazil, flying to many gateways. And we are going to continue our partnership, our co-share and also the frequent flyer with them.

I have just a quick follow-up regarding the delay to receive the aircraft from Boeing. So,, it is clear that you mentioned that you have some grounded aircraft that are generating lease expenses not tied to revenue generation and that is waiting on your cash flow.

And you mentioned that this should also wait on the gas figures looking forward. I'd just like, I would just like to, confirm that we should see maybe a spike on maintenance expenses in the coming quarters because of these effect.

I mean, you're going to have to return these aircraft, do some maintenance, some work on them to return them following your checklist and that we should see these higher maintenance expenses. Is that going to be one of the negative effects you're going to have because of this idle capacity?

As you can see, even in this quarter, which is a very robust result that we are delivering, but it has already the impact of four lease returns on the cost side and that will probably continue. As we grow, we are looking to every airplane sit down with the lessor and say, “Look, can we come bring this plane back to the operation?

Can we extend that lease? Can we invest in the right CapEx, invest on the engines and stay flying this engine or let's return” So, we are doing this and the other moving piece is the delivers and that we have very low visibility so far.

That's why it's something that we are managing in the like two month timeframe rolling basis. So, we go and say, those are the candidates to bring those planes back to fly.

We sit down with the lessor, try to have a negotiation to return or to make sure we can fly those airplanes or we can take a MAX and return those planes. The level of maintenance will continue to be impacting the cost as we saw this quarter.

I don't think it's going to be much bigger than what it was in the quarter. But also there is the challenge on the CapEx side, if we decide to return more planes, the then to fulfill the gap on the delivers, and that's what Mario answered before.

We are budgeting 2024 to make sure that we have enough room to address those engines sit down with lessors with MROs to have more ability to finance those CapEx. That's what we are doing right now.

And working with new engine facilities, especially with the Brazilian government to make sure we can address a higher CapEx than we usually face. So cost and also CapEx will be impacted especially in the next 12 months.

I just wanted to add Gabriel, the following. If you remember, we have been -- we provisioned some of the return costs -- the maintenance return costs in our balance sheet back in by then of 2021.

So, of course, part of that impact is going to be compensated. Not all because the provision is prorated as long as the cycles we are going to start to be constituted.

So given that we anticipated some of the redelivers of the aircraft in ‘25 and ‘26, and now we are anticipating some of the returns as one of the big efforts that we're doing in order to rebalance our fleet and recovering the efficiency and also the productivity, we have been impacted by this higher cost going forward. And at the same time, the potential profits on gains for the new deliveries.

Now we have some uncertainty. So that has been driving the results to be temporarily, with the cost to temporarily increase from what we previously forecasted.

But at the same time, what you are probably can think is that. At the same time, we are doing that effort in terms of reducing that item is and we can potentially start to have some impacts on the P&L on the maintenance line.

At the same time, on the cash flow perspective, as we mentioned before, we are also paying some inefficient drag related to leases, with no aircraft available. We, also, we need to perform into additional leases for spare engines and maintenance reserves.

So everything that in order to address that impact on the maintenance going forward, we can expect that, we can also compensate or offset that cost impact going forward with a lower drag in the cash flow and at the same time to have a more neutral scenario because we are fixing that issue right now. So, that's the only another way to think in terms of cash flow impact.

I just want to follow-up in the lessors topic. Could you update us on the situation with in the negotiations?

Have there been any updates and what are you seeing as the main bottlenecks? And the second question is regarding the 2024 2025 maturities.

What are you expecting to confront those? And are there any plans over there?

Thanks.

Good morning, Diego. So on the lessors side, we continue to talk with all the lessors.

We have 25 lessors and to address, I mean, the accumulated liabilities that we have on the leasing side, most of them reflected as lease deferrals that, of course, we are trying to negotiate to push them to the to the right. But also we are discussing with lessors now, I mean, how can we address the end of losing compensation of the airplanes, especially the planes that we are not flying and also maintenance facilities that we are discussing to how can we address the engines.

So I think, ourselves and other source, we don't want to have planes on the ground here or any other places. So, we are going lessor by lessor especially with the ones that are have this situation of engines and planes on the ground to make sure, we can address away and expedite the way without a tremendous cash burn all at once.

So, the negotiations are improving. We have, I mean, it takes time.

So, we have been this since last year when we issued the SAN. It takes time, but we are, I mean, we are making progress with them.

Mario?

Yes, for the second question related to the outstanding amount on the bonds, Diego. As you know, for 2024 we have already reduced the spring maturity risk.

So, now the outstanding amount is below BRL42 million. And that's, of course, have the shortest maturity in the middle of next year.

And on the '25 and '26, there is still two years, until the maturity. So, the point is that, we are focus on now on putting the Company back on-track in terms of operational and productivity performance, and also that resolving, most of that capacity plus the CapEx issue that is something that if you can fix that, company will be behaving much better in terms of their financial performance because something that I wanted to highlight is that we are producing that EBIT and EBITDA generation even carrying this drag in our balance sheet.

So, we really understand that with the efforts and this very good work with our team, we can really been outperforming our results when we have this CapEx and capacity being addressed. So, that's our main priority right now.

And of course, if that's happened, we can turn it into higher margins better cash flow. And when the scenario will happen, we drive to all alternatives that go has available that we can access where is going to be the best way to address all those ‘25, ‘26 bonds.

So this too far away, right now, of course, we try to think what we can do in some anticipation, but this is not the top priority right now or neither the best user of cash at this point in time. So when the time is appropriate, of course, we are going to be discussing that topic.

And right now, of course, all the alternatives are on the table, but we need to put the Company back on track first. Otherwise, there's no room to discuss anything on the ‘25, ‘26 bonds.

And the ‘24, as I mentioned is pretty much more reduced as a risk. And that's something that we also going to be handle when we can get into the 2023 results and start to look on ‘24.

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