Q3 2020 Gol Linhas Aereas Inteligentes SA Earnings Call
Welcome to the goal Airlines third quarter 2020 results conference call. This call is being recorded and all participants will be in a listen-only mode during the company's presentation after goals remarks. There will be a question-and-answer session at that time further instructions will be given to any participant need assistance during this call, please press zero to reach the operator. This is that is also being broadcast live by a webcast and maybe access through the door website at ww.w wage and the following the presentation via the web casts. They post their questions on the platform and the questions will be either answered by the management during this call or by the goal investor relations team after the conference is finished.
before proceeding
Let me mention that forward-looking statements are based on the beliefs and assumptions of both management and on information currently available to the company, they involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur investors and analysts should understand that events related to macroeconomic conditions industry and other factors could also cause results to differ materially from those expressed in such forward-looking statements at this time. I will hand you over to mr. Pollo packing off please begin.
Good morning, and welcome to Blue airlines famous call customer chief executive officer. And I am driving by Rich on that are cute. Financial also needs to be morning. We believe all the qualities you need a available on doors in Virtual agent website, which will result presentation financially wage company. Everyone has to watch it now only consideration and then if you'd like to. Action recovery, the volume of operations are not working.
No, the only Airline review but not as consistently to maintain other level close to 80% off to the cross and transfer division marketing company is now an advantageous position to capture not attract other than one for travel pass operating environment. You need to come with the company. Do you continue to improve during the remainder?
Yes, the search for cheapest diesel and how are the end of the month? You can ask you not which accounts to do for 100% of the company's network operations 43% reviews in the search for God has to be greater interest the company produces sixty percent increase in ticket sales across all of these channels compared to August.
The for quality assurance we take approximately 1.75% off don't do you know which which is not 60% off number to revenue including your hundred and 10% coverage.
matching capacity one of the company
That would be good evening regarding recovery. Your current capacity assumes a hundred percent with the warranty company to the Play-Off. Can you spell if you read me I could see if I can get you over to reach her. He's going to freak us through some additional help.
And the first name and phone number in shorts on that same tournament dollars 2020-2021. This is my collection of go through them for shrinking the balance sheet over the past four years or better calves consumption method is effective management of working capital is matching the VIN. If you send the key driver for maintaining order, you can support of the companies part of the banks to mean the terms of those examples that insurance sent a price from a single rescheduled such an issue in terms of frequency billing route route. Increase is 52% compared to the same period last year
Cost incurred for making shortly to place operating adjusted responded to 21.56% off 36 20% drop and demonstrates the companies continued focus on results and its cost structure is a pretty fundamental level. It's a new 6-0 converted into variable costs.
An operator and if you on the service will include 50% less Fuel and the 737-800 of the aircraft the phone message demonstrate the company's focus on maintaining record of the Allied for responsible capacity management in relation to the level of customer demand wage and combined with the Fisher-Price immediate action plan on the management of operations as the labels go through each one and average the passenger berths a reduction of 12% compared to the third quarter of 2019 due to the reconfiguration of the companies Network concentrating and distributing operation table and consequently increase in scheduling team average of 79.3% reduction of 3.6% off.
Quarter of last year, but consistent since the beginning of academic role is the only a line to maintain this level is low taxes plus the tax is a month before I joined factor for this company on time departures is 96.7 percent increase is 5.5 percentage points, according to our beautiful / the main airports just 11.7% off to support you open operations and a continuous search for balancing Supply with demand and yields. It allows. It seems really
2024. A strong recovery in the buying of operations.
A record number of passengers transported the launch of our Central network of April. 71 aircraft operating on this network includes an increase for aircraft compared to the in between 2368 and 2020.
The market represents 39% of the Air Force One in the third quarter of last year 118 of those markets will operate about a company and 16 five am now I would like to return to, Texas.
Thanks, Jeff Gordon flight experience and location services to ensure that our tables are comfortable with the entire flight experience. You believe some of you want to fly fishing Long Beach with the most and service both during and after the lines of America package extra Galaxy the graviton probably be sent to auction or until you see you cancel.
Station for me to have to deal with life. I do want to give information for the coverage.
Will you continue to be because now added for having the motor? That's the way I'm flexible business model the safety of customers and employees. It's the best and the lower-wage begin with now I would like to initiate with your message.
Thank you. The floor is now open for questions. If you have a question, please press star one on your touchtone phone or any time. If at any point, your question is answered. You may remove yourself from the queue by pressing star two questions will be taken in the order. They are received we do ask that when you post your question if you pick up your handset off right awesome sound quality. Please hold while we pull for questions.
Our first question comes from Mike linenberg with major Bank, please. Go ahead. Yeah. Hey, good morning. Everyone. Just I guess two questions here one. This is sort of just a quick one on Thursday. You indicated Rich that yields were down 12% but year stage length increased. So I'm curious if you actually have that number on a stage adjusted basis presumably it's better than 10 12.
Sorry.
I'll go ahead text page one hundred percent radiation versus last year with more details connecting to the helps. So there are quite to point flights in comparison to the prequel with network operating off. So to be performed the same trip. It has much more passengers connecting a religious reasons or
Yeah, I think yeah now that that's good to know and what I was trying to establish at the fact that your yield performance arguably was better than the headline number because of the increase in wage Me. Maybe say about home. You can see here the share of wallet. I mean the customer willingness to pay the same amount of money off before to let me specific through the original information. I mean you guys offer any kind of generation Target customer side actually even pay a higher wage.
all right once you get in the
Drink too much longer now than if you were looking for an odd question. I'm sorry the warm up here on this Wednesday morning would be 4% down quarter-over-quarter. If you were to Apples to Apples, like it would have been down about 6% off of the public in that number for customer service representative. I would have been a large corporate customer, which is not if you were to Apples to Apples in for that for that same customer base wage.
Cuz we would think about the share of wallet our share of wallet callback component in other words off while overall. I had Shrugged him our share of the of the price increase substantially. And and in that is that to get to where we've got three now off the vehicle are passenger to the flexibility, of course.
You know our expansion our Network in our product has been you know under the name of the customer experience in the product that is most valuable now in this current customer base into the results you're seeing.
Car off a you know, what you think about the ulcc in other words not to detract large corporates and the network it has, you know, a massive number of frequencies between you know, America is trying to set on the side right now. I can actually, you know, the apples to apples that we had a very significant increase in yield and profitability if you were to if you were to perpetuate Goldberg this month
you can't
3 a.m. To everyone for making more on the market dynamics Thursday. We have it ready before a hundred percent off the free program that you have you have. This is actually is that the business traveler package is returned mention, uh to disaster up to 25% of a number on the passengers in a certain age and also up to 65% of the revenues. So that portion is meeting because only 20% off.
This is what is somehow pressuring now. Do you use month? And you order in the other side you have the exchange rate is 40% into so those are the two major month for 6 months, but you haven't seen that covers all the same time that we've got a considerable birth.
Pressure off at around 10% So if you were to just that for SafeLink, we had no decrease in average ticket the average ticket of the large corporate what corporate which would be half of the fishing two to three times three times the average ticket and so so it's a substantial expansion. In fact, I'm not share it with spend. The customer said we Define it and maximizing our share of the corporate stance and we are on the twenty percent of the corporate is traveling.
we probably close to fifty percent of their wages, which is probably come back to free levels on a volume basis and we've significantly increased our our share of wallet of that wage wage Virginia dealing with the
Is there any difference in Europe independent and let's say a big number of America USA and other countries in Latin America with the exception of Mexico, but I'm probably a second what's going in Mexico and what you guys are seeing a black for one compared with that way. The billing will be essential piece that were missing is the large portraits and what I'm saying is that you know, if you were if you were trying to extract that and cut out all of the excess, you know the aircraft on the ground all the witness cost their wage, you know half for business. Is there a served until that's on the ground it's running off.
All the infrastructure in the cost at some point, you know, and when that comes back off to me the upper levels going to be huge also because we transform a huge chunk of our fixed up and transformed the variable cost for a period of time Windows marked off this massive operation sliding some other point in their life on here on just the guidance. And by the way, thanks for you know, giving us March Q as well given, you know the rate of change here, but when I look at just some of the key metrics with things like liquidity up for over three q but net get down about a billion, but then I'm looking at about 3 million of cash burn per day and so, you know sort of back of the Dead.
So I presume that you're either going to tap some external financing or maybe there's a hedge position that's on why on that frees up capital. I mean, I realize that's a restricted Cash number two. So that's what's driving that Improvement in liquidity when you know, it looks like cash Burns actually similar or slightly higher than what we saw three Q. Is there something external there whatever you can say like a difference when we discount. We do a lot of work to provide. Our investors are taking off a lot of work behind that and and in general with the numbers that we provide you can triangulate the pretty much all the numbers you want to obviously given if there is no
lack of confidence over what our normal financing sources
In general, you know, we can go up a little bit more but keep in mind with us customers bank accounts receivable, you know sales rep because you see that there is a month plus unrestricted and restricted cash and receivables have two thousand one hundred depending on the scenario was a hundred and twenty million dollar increase in accounts receivables. We expect our overall balance. Yep.
Accounts receivable balance by the end of two want to make sure would be like 70% of the pre-trial the levels. Why is that because you know, we have to rebuild the current asset side of our hours of operation were there we got enough of those we got rid of the you know from say in the market for the end of December nine billion realize of sales for sure, you know walk off at roughly 1.2 billion way eyes average receivable valves per month, which is how we normally work. Now a lot of people don't like a lot of people a lot. Are you home birth?
Now what we see in terms of questions, we ask me questions on what we capital and current assets. It's all about, you know, what the top line of the current asset where we going to go down, you know, I mentioned as well. We do have a significant amount of receivables current assets wage describe the closet and starting in August to September in to continue. You know, we've been gradually unlocking some of those current Assets in two thousand cash that will continue okay now and then the year in the fourth quarter and the q1 there's also one to two hundred million am not able to cash. Okay. Yep.
thank you for calling Full House and
By the end of the year, which is also along the lines of those. What was that? I'm talking about to come in there and then and then the other month, I just have a vendor proteins that many carriers are marking in there should have popping up there nice little surprises.
Agreement back in the truck that we received in December, and and we received in April but it's it's it's very helpful. Now, how long have you had it now? We don't have it. Now. It's it's going to be it's going to be arriving right around December but no option to that in there.
With what year were you're going as well with this is also a related question, which is you know the wage to be coming out and and how that relates to the to the cash completely swimming in addition to receivables other current assets are complications. What's going on with you were kind of reorganizing and restructuring the current asset side of the balance which produces the authority and we needed is expensive because we have to pay, you know, either a letter credit or an insurance policy things like that. And yes, we do have planned a as you all know. We have planned a month at securing financing you are unencumbered assets. You don't have about a million dollars.
Aeronautical assets, which can give us if we need it around $150 for 600 a.m. Could do that in the in the in the in the near future here. And so that's also and then finally and it's it's it's working a reporter asking about because of our negotiations with leasing companies auction reduction in our office at around two hundred million, you know, I'm not also that also goes into the reflection on the on the day you're asking is dead.
Show me 1 billion real.
Reduction in their addition to the month when you renegotiate contract you have to measure the account and so, you know in our particular case, but you know, we you know, we have we were to you know, Mark the markets and so we had wheat reductions. That was then put it in a contract firms in both absolute reduction in the overall on Galaxy aircraft then and then and then Thursday kitchen is actually increased because you're effectively Net Present Value and highlight that presented a reduction in on Thursday.
Yes, only because of the reduction in the lease turn in the wrong direction. So, you know, we got some real discounts and converting them by the hour the same time we pushed it turns out by a little over a year. There is a little bit of an impact on the discount you guys unpack that. I'm looking for the financial statements going out without actually seeing the Q re we're only 449 aircraft. There's another aircraft that would be accounted for in a two-for-one all that comes with all the channels on Thursday. Probably got time to get into including the car shipped here.
Reduction in in sheet leverage related to the airport, which is our principal said I would get to those numbers that were describing their Thursday. It's 3 p.m. And then the first floor and the first quarter of next year. Kind of collapse down there, but we're comfortable with that level of Leverage because once you get back to our corporates, and once the operating leverage kicks in is going to be a very rapid deceleration of that leverage you get back to our policy Target, which is three times, you know at some point on a run-rate basis in the second half off.
On on how we get to those numbers on the actual part and parcel to the balance sheet leverage component also, so I wanted to kind of put those down together because if you were already getting, you know emails this morning exactly on the question. You are asking. Thanks Patti Smith Raymond James, please go ahead.
Very good morning. This is Madeline. I appreciate all the color on that lease that right there. It should be can you just walk in some point or what? We think about in terms of the income statement impact Beyond week. You said there were 39 months usually in 4 q. So, how can I do that be on there and do those terms as we're going through the cash flow and back going to reverse at some point?
Why would we?
I got there it would be overtime cuz I know those are those are our contracts are legally. So those are those are our major reductions to the life of the week. That's the point. I'm trying to make is that all you know, as we went through my product Lee through our adjustments. Our main objective was to preserve our cost compatibilities and then our second objective was cash flow matching matching if you will are fixed costs. Okay, it's on a second point we set with our two Matrix box which is labor and and aircraft a term up to the end of next year wage.
End of 2021 other words roughly eighteen months time. We need to get it cuz we match our fixed costs which would normally be, you know, I'm the type of structure achieve some reductions off our cable plugged into a veritable Power by the Arctic set up for the 60% of Labor that works in operations. And that that agreement the first when I am only Airline white Americans far as I know all the way through the end of next year to the revenue ramp up and down on that on the aircraft site same deal and so in addition to marking any leases that we have a game.
In addition to adjusting notes down to the New Market, which is for the life of the lease is not not just for once we we also offer so that we trade was lowered. I mean in that unpacking it a portion of that. Obviously, we have a relationship with situation and like many aircraft that were not above Market not as not as opposed to corporate market then and then the new you know month lease payment that we renegotiated a portion of that was also transformed into harming our computer science, but it also matched the 6 plus the ramp up and so that was off so that you didn't have to
Return more aircraft didn't have to re-contract next year.
Without having to go through all the cost of the of the deliveries and and that's why you have to see the difference between a much larger difference between difference which is roughly 20 aircraft much more than what we needed, you know in the second half of next year as we get back to more normal operation. So all of these things are kind of rolled into office know very customized negotiation since we did and from accounting basis, you know, you actually see the adjustments when you get the actual contract signed everybody hang up and the remainder of
And then those payments would be for the accounting affects. The other thing that I'm saying is that we had a average tenor extension about one point two years. It's the extension is Turner in the Airport Extreme accounting actually increases your the personal side of your neck. The opposite is the case and some of our competitors where they reduce the center bulb translate into it never Dakshin without any more markets or any other the other components that items from you guys can in fact that if you do your your comparative analysis, right you guys can offer a lot of time on that quick, you know that comes inside and done to once we get that Corona normal life operations what you should expect to see in the same unit cost advantage to 25% over our next competitor making saw dead.
So if you go back to you know, what you can looking at or unique lost basis, you know directors and preserving that twenty 25% off to our competitors scratch. That's what we're going for believe we've achieved it and probably hopefully improve it. I think we're probably only know the starting the second quarter of next year two years when the dust settles on everything but you guys have to spend a lot of time on Thursday, but you have to unpack it and look at least terms for example understand what might be going on there, but we can obviously help you guys with that offline because you understand our account on that.
I certainly appreciate that if I made one more on your debt and finance and payments. I'm just trying to reconcile your jet pack order specifically the US dollar-denominated that the Delta Delta said that that was going to be over monthly through the end of twenty Twenty-One know fully appointment cuz I was I was looking at basically said, later.
And what happened in right now?
Can I would be cooler than that in the monthly update? We provided on Thursday our faith that our reservation scheduled quarterly for the other next year broke down between between dollars and revives.
And you know what's on the page and then the it also what also includes in there a rollover already concluded or what we're doing the ventures, which was a hundred Forty-Eight million on Thursday. It's do you want September and September that was rolled over for the March semi annual wage and the schedule and in addition to that you have there in the debt renovation schedule. It's in that cable box is contractual. I mean not assuming rollovers of working capital financing that we had and people
Having said that if you were to go back and look at the restorant lie, you know, if you go back over the last four years, you'll see the reservation scheduled never applied. You know, I received the money back and they want to keep the gold credit. And so we are rolling that over, you know, based on cost analysis. What we been relying is the return of the flavor, you know, we have been inquiring support from our our banks in the rollover import financing and working capital. And so I'll take that number that would be in that category has been kind of rolling over the match it with cash inflow six hundred between ninth and the end of next year. It's in those numbers. Also. I'm sorry. It's not in November meeting. That would be some cash from what you see on the schedule.
What is normal for us normal with our banking operations with not all them now is the the pandemic scenario and said, you know, we we've we've had support well like this kind of bizarre commercial plants, right, you know the exact category else will because we're a promotional partnership dancing or working capital commercial. It's not like a capital markets offer you use other tools sunblock is better, but I think it should be clear. You know, we'd be honoring our commitment to the capital markets and they were probably one of the few Airlines in South America that has been recording Capital to investors this year that we would burn through and eighty million dollars of capital to investors this year now dead.
Um at the way that the way that has worked there in the panoramic on the commercial plants, you know.
Was there any banks and told me to call back and support us or commercial activity? We haven't received a dime of traditional credit. So we all get lost in correct. And if you were to take the amount that was reflected by the devaluation between real partnership Banks extended as credit app keeps crashing. We actually generated about five or six hundred million of additional credit for since from March until now and that's what that's why I that's kind of created this roughly 600 million rail will continue to kind of, you know roll over and push you out until we get on the other side of this obviously that assumes continued partnership and I assume from the community and you know normal functioning credit markets and markets one thing to get help. That was the preparation of the month.
Economic Ministry has gone for the balance sheet of the bank street is a lot of liquidity in the system that obviously I need available for Airlines situation where from a from a commercial Banking balance sheet off, you know, the situation like this banking system was not as well prepared as coming into this life, you know because of how we treated our Capital markets investors, we believe that we preserve our Capital Market access and you know, we have been monitoring club and we were purposely avoiding schizophrenic capital-raising like you said how many other airlines Movie package or or so on we might have been something in August, but then we kind of God.
A secured by you know a bunch of fear over how we were innocent shorter navigation. You know, we're very clear about how we're doing at Marcus is with the market name and now we know our block license, you know, almost almost almost almost off Capital Market access in in creative ways to you know, raise additional cash, you know, the rules that you have when you're managing balance sheet of Arab like always black. We need more cash than you you need to raise that when the market want you to and so if you have those conditions, you know, we're obligated to look at those and and do not change for having a discussion but also for our budget for next year, which also can include some interesting items related to the back of the max, you know opportunity wage.
aircraft that position also other types of liability management, you know that
Can't smoke in our plans to give you guys a lot of questions and often times you hear as much information if you're making friend, but obviously they're not yet questions and clarifications. It's really important for our our shareholders and I have a really good understanding of how you know, Kottke needs new management and other people thinking about you know, what they're thinking about what clients and travel agents and Banks and we can come up with things like that. This call is not to talk to our banks understand this and so we've erred on the side job.
As much information as we think we can provide some people that you know, the kind of people that we want, you know with us because there's an airline passenger aircraft then has a massive balance sheet and capital spending program. You need the capital markets not just bought. I just do also offer on getting our investments on equal access basis. One of you by that is that you know, the same information that we give the one we're giving everybody on a monthly basis and that's a lot of work, but we think it's important to right way to do business.
Certainly appreciate the the comprehensive answer as well as a little took a couple of questions to get through here. You can go online and we can move the next question operator.
And the next question is from Matthew Breckenridge DSC Meridian, please go ahead I'm I'm pretty I'm stay on the financial debt memorization schedule. The last one I saw this chart was all behind and log into my question is have you changed the format of this? So for instance g 229186000000 red. I am populated rebates right now.
And the light gray and then Thursday to exchange it what your exchange rate so you can use whatever exchange rate you want to use obligation should be there who are u.s. Dollars, dated obligations under the previous question. Those are the drivers are commercial. I'm not going to be a majority and then the the 2025, you know, and then we have the Dead.
25 maturity, please note of the maturities that we have our
Okay, and then you can also see that roughly $600 when I was describing which is cute four and two one which is often. Do you need to make a category dancing working capital, you know and you know, you know, we'll continue home if you would like normally the opposite of the meaning when we we renegotiated are Brazilian Ralph Adventure a couple of years ago to put normalization schedule. That was not the banks. May we provide on a semi-annual amortization schedule? We were half one with navigation when the pandemic did and went back to you know, we have to now get a rematch this month.
So that's that's a good example of how we do is we took the March maturity originally we did the March security remarks. Mm and created a March Twenty One March twenty to age and then we took the September majority in Florida in March twenty one that type of activity and that's what we're going to venture which is more complex than just a simple Security Office put it in dollars in the currency of the actual contract.
Thursday it's 3 to finance and have you thought about doing something similar to something dropping the car off the market seemed a larger way to keep it a crazy question off. The table will be the recurring.
It's a very different number one, you know, we serve technology if you wanted to use a convertible technique, which would not be any incentives in realize the situation. So, yes, we do have that ability if you want to use it, which is a positive. Another difference we have is real side of the coin show, right? We have 60% off business, you know, he was the one who provided the the support from a car insurance liable. He does have the ability to Blind and also with other things and so it's it is a dog
No.
Because we don't have an infinite well to tap into on those kind of things. And so we we look at all options. Obviously. I'm I'm not sure what the market is the Air Force Academy off or or nothing our football results the other issues. I mentioned, you know, if we can say, you know, we we we have already sorry, but this year we were going to do an early was actually in hablar Terminal D. And you know, we also are going to do the package which we canceled both of those on March 13th.
Why didnt March 30th to preserve a quick, you know, we had that cash on balance sheet and Thursday. We have a project to do a search using athletes that are already on our balance sheet already dead. You know, we should work on that in July and had a very good rest on the structure. We have created but we hear a lot of time on this truck on Tuesday more of a challenge when you talk about the security of saying, you know, yes, ma'am you on a on a corporate assets would be roughly $115 financing because you know fairly straightforward.
And it's in our budget issue. Everything else is not our our budget is that also includes the actual Development Bank? I'm not sure which way you know, we have to continue to work on trying to make that a viable structure, you know in that structure that has ended anything else has offered to 60% of a, you know, five year in real life Lawrence type of structure. We have spent a lot of time. I'm out of the left side of months and not yet been able to crack the code and figure out a way to come up with the other forty percent. I think that's a little bit of a reflective an situation. You're mentioning. I think we kind of morphine for that in a in a different way home.
What else to try to keep a good relationship with capital markets investors? And I think we think we can count on those relationships. They're going to need them. And yes, you got to get the balance and and and working capital expansion next year. We we have to match a combination with the market and the you know security that we have we we have we we we have which are dead.
limited because uh
Unsecure transactions are really not on the table. And so you have to do a secure transaction. And so we've been very careful about how we're doing that the second quarter cup and who's kind of burned through and cannibalized what we have, you know, I think we need a much worse situation now like like you said with other choice to figure out who sent massive, you know, what side of the balance sheet access aircraft loyalty program assets off and taking transactions as they can do that. We generally have not been able to deal with such as you know, security and future revenues and things like that. We also have not any grants or loans wage, which is what you see the majority of the women surviving paying payroll and other things of the last
Once you know free or low-cost no-cost money from the government wage mm with taxes and things like that. We have not gone that much tougher to get to the Today show me more.
Say I'm a certain age and we I thought was working were expecting they were going to have to survive our own two feet here. And so we're getting through our weekdays now with no results. Let's see how the markets shape up here with the the white and blue max. They're all on everybody wife owns around here. And I'm in my experience of having done this for now over twenty years, you know, we'll find the right moment to match what I quite frankly wage makes sense for us. We have throwing the baby out with the bathwater mean, you know, creating some kind of a problem that we're going to have to fix in the short-term. Obviously. It's a couple of birth
And if you'd like to know what we appreciate your feedback off of this company and So speaking.
Okay, if I drop it off or and the key one amortization there now larger than they were before. Is that accurate?
If you wouldn't mind like I have to get off until you get criticisms from you guys had one guy off the last four of the ten minutes on that question.
The next question is from Dan McKenzie with sequins Global, please go ahead.
Well, hey, thanks a couple of questions here. If I heard correctly, which you're looking to get the three-times leveraged by mid twenty Twenty-One. And so I guess just to clarify is that the time after some potential Travellers here invented in the Outlook? I guess that's that's one question. I guess where I'm going with that is the goal seems to imply a you know recovery. That's somewhat faster wage. Um, you know, I would have anticipated products. That's my first question. We used to clarification question.
Home management Airline edible or three times leverage that is our wacky invention. That is the right number for this company. We've always had that when we have to deal with the ability of all the issues. We have to check with your airline, you know currency economy oil prices are now this so we still seat back home what I'm saying more in the transition from the front half of the second half of next year.
one-on-one rebate instead because I'm not even
or the post office he want to destroy the first quarter and then next year. I'm going to be the first quarter and the email off phone number going to be carrying the hdm1 rate basis, you know QQ annualized next year.
On on capacity adjustments meaning getting the aircraft match the demand, you know have that we matching, you know, the assets or liabilities. We link all right around in the middle of next year. So at that point, you know, obviously it's going to be lots of the calculations, you know, in addition to getting our cost anything else you want to reconnect with that goal. Now the other part of your question is yes, I mean if we need to make further adjustments do I call that number is going to be the the actress because off the meanwhile if there's overcapacity at the aircraft if we're I plugged the aircraft It's Not Dead.
The aircraft 70% of the aircraft Thursday we take our plan is going to do that. We already have that plan. And so that we match it will probably happen between two or three. We don't have any other choice the liability match, you know, because our you know our our 2024 convert Materia mm 24-25 a majority of those cost me 3% and 30% respectively and then I have a 8.5% which is going back and looking like equity in the car environment. So I don't I don't really have any other targets for liability management team.
And it's a way for the right side to get the aircraft match with the man, you know, we don't need to raise additional additional capital. I know this is Erin from one of your predecessors you sent retired from the state of Florida, Looks like you know, like you know, he told me no no no, we have to put her arm all night. So I got the I got the control and you know, you don't have a job right now. We are required for exactly and and so that that's not on the table price right now is this company but we do have other ways of supporting ourselves birth.
I'm not exactly answering your question directly because farthest depends on the recoveries are saying well we see if that was describing, you know, like in this comparison that you guys were to help 2018 is the Baseline. Okay, you know, I'll talk to you on those cars off do I comparison is whatever they need to happen is we're going to match what the password to that of course. That's the only Industries in the world that have the ability Industries have to match their offer is applied to the man. We all probability stimulate demand for money management problems. Yep.
And you have the sport?
You know, you can fly to London for a hundred, you know for fifty bucks because you know, the revenue mashable's we're just spiralling downwards because they're trying to simulate the man but it just kept going and going and going off what starting at we don't use the data analytics to get some of the back home know you guys don't know any of you guys in conferences talk to the large corporates then, you know, just asking, you know, you guys include it. I mean, you know, if you guys are buying tickets and traveling on Thursday, we know when that happened. So this is kind of a movie involving describing. It's not it's not life cycle training. Thanks for giving us the Dead.
No, thank you. No, thank you. Have a great summer season car was only next year on February 15th. That would be the beginning of the of the gazillion dead end of two hundred next year. We're still going to be below 70% of the 2019 comparison will not keeping structure or or tap on that and I believe as of the second quarter, you know will be matched to whatever the new man scenario is. If you open on the edge of town, not just with the Apple hotels, but also you have the drawing ability to it's a maximum wage.
Accelerate the transformation to the max because you know, roughly the next couple years we have roughly, you know warm air craft per month in natural opportunity. So we have the ability to go outside whether you know, we get down to like one another for the aircraft over the years if we wanted to naturally or else they could be replaced with Max aircraft as far as in the biggest question that one of the reasons why the increase the variable cost of the leasing contracts would have to return a twenty-year class next year and then get them back comes back and so we can keep on the ground at a very low cost for a period of time on all the man scenarios that could be possible. You know the worst case scenario in the in the best case scenario.
Thanks for the comprehensive answer and I guess you know, you actually went to my second question and that's just the corporate.
And that's your right. The $64 question is when that comes back into I'm just wondering if you can kind of help us track quickly for that recovery where we have today what what might that mix look like and you know play January of 2021 early, you know at 20% 30% of corporate travel versus a year of potentially and then just if we could really can't the relationship with American was here getting two times the traffic problems that we're trying to Prior partner. So 27% of the market share. So it seems that this could also about, you know, some of this, you know corporate mix for you as well potential success. I'm just trying to get this already sent from somewhere like, you know, kind of how you're thinking about that.
I am actually off by and second quarterback and we believe that the second quarter next year on you see the driver's resuming and I believe if you might be a democracy and Market something around 18% off again you achieve the vehicle off.
For dancing at the moment you seem small and medium companies already flying and the accounts 2018 underserved compliance with the planes. I mean that position might be silver only when we will have available table for new bank or off and has his medical protocols which will drop dramatically degrees and when can I expect? Yep?
Japanese I will be used for exactly.
Before the second floor offers a Brazil and you need to take our place for like four months. They were you know, we're looking at individual were pushing around 300-400 fatalities per day, you know approaching 300. It's going now. I'm in a real collapse of the people in July, you know close to 1,100 now.
You know, if you look at that, you can look at what's going on. And in fact Europe and let me go to the markets, you know, we're going up at a slope of one but we were going down and smoke with one looks like an Axe and you know, we're just starting our summer if I get a little bit of a crisis we can do as we grow in sweaters here. I am, you know life in the morning, you know, good sleeping weather, you know, you know, it should be like in the eighties and so now we've got three or four to five months of summer in front of us and here in Brazil help you with, sir and your phone keeps showing Argentina opening up again, you know after you know, we had a Brazil, you know, a really high level except quarantining in the treatments. Yep.
In the second floor, there should be an option for the month of July and no thought you were saying at the same time being a lot of time to be very proactive on the on the front of that scene and it's a tropical country. You know, what I was in, you know, once a week was a truck that goes around its free, you know buildings and houses for for maybe right. So we have a lot of influence structure that has built-in to protect ourselves against you know, certain types of things and and I'm making light of it at all, but just you know, you know when we hit $300 per day, you know last week I will be lower than the fatality rate in Google promises. Right right different perspective. Like like it's like a thousand extra different but that's a country that has one homicide per day and home.
Country it's like a different perspective. So I just remember when you talk about here in Brazil and the and the the concept of living with these these phenomena. I know I think reality is going to be different than maybe you're seeing some develop markets in Europe took one can describe is the customer I mean wage anymore and then Thursday, I mean the normal lives we can determine how much they're people you need to recover a regen dead.
And and that's that's our hours for the month instead of like, do you have a partnership off and then it wasn't ready enough to to verify that the potential, you know between two to three times more traffic between the two problems than we had a partnership. He might have we already had an American authors.
No wonder my life.
This concludes today's question-and-answer session. I would like to invite mister and also procedure is closing remarks, please go ahead sir.
Really available to speak to you. Thank you very much.
This concludes the goal for today. Thank you very much for your participation and have a nice day. You may now disconnect.
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