GOL Linhas Aéreas Inteligentes S.A (NYSE:GOL) Q2 2020 Earnings Conference Call - Final Transcript
Jul 31, 2020 • 11:00 am ET
Richard F. Lark Jr
reality that is reflected in the statistics that you're seeing.
Next question is from Alex Falcao with HSBC. Please go ahead.
Alexandre Pfrimer Falcao
How much of market share gains do you guys put into this prediction of the 70% capacity gain back in the fourth quarter. We saw reports on LatAm saying that they would probably not reach an agreement and going to have to fire people and take away capacity. Is that playing each of your expectations, meaning that if it's not do you think that could be even better than you guys expect?
And second, how closely you're going to monitor the routes in Brazil? And if they're not performing, not performing, you're going to close them down.
Paulo Sergio Kakinoff
Okay. Has. Actually, we have achieved a current market share at the level of 40% for 0. So this is, I mean, between two to three percentage points above what we usually have. This is something I believe that we could keep. So this is entirely based on our own performance, and we are not assuming any specific movement from our competitors. So this is I mean, how much we believe we can keep in our view and then we have closely monitor every single route. I mean, from at the moment or up to now, we have no intention to either cancel or give up on any of the routes we have reignited since the major reduction that we had implemented in April. So the new or the routes we have resumed since then are so far sustainable, and we believe that by the end of the year, we might be operating something around 80%, eight 0 of the mask routes that we were pre-COVID.
Richard F. Lark Jr
The current run rates aren't necessarily a good predictor of the future because of the real distortion you have in the mix of traveling clients. But if you take the mix we have today, on a run rate basis, we're at about 50% of the corporate the business market that's traveling, we have about 50% share. We know that from the data that we look at. But that's obviously with a significantly reduced market and someone inverted where the large portion of large corporates are not traveling. And so I don't think that's a I think market share is pretty useless. But that derives from the network. GOL has a network that it's been built over 20 years, but it is the most present in the main business markets with our capacity is put where the main business market business travelers want to travel, and therefore, it's the most linked into GDP. And we also have the highest us in LatAm, it's about a 90% overlap with LATAM's route network. And similar to what we saw in the Avianca Brazil situation at the end of 2018, beginning of 2019. And that company had around a 90% overlap with GOL. And so with what LATAM is doing, there's probably a big chunk of passengers that normally would