GOL Linhas Aéreas Inteligentes S.A (NYSE:GOL) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 11:00 am ET

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GOL Linhas Aéreas Inteligentes S.A (NYSE:GOL) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Executive
Paulo Sergio Kakinoff

how to proceed with that. And we also have, based on our unencumbered assets, which primarily are aeronautical assets, which also includes some non credit card receivables, we have some structured secured finance alternatives that are in execution that we can bring forward for execution if we need to. And then finally, we don't have flexibility, obviously, is on our unsecured capital markets bonds in the market. As bond holders on the call would know, we've those the semiannual interest payments were made both on the on the convert in the 25 bonds this month as planned. And so we don't have any plans to alter anything related to our unsecured bonds in the market. I mean finally, just to round it out because this obviously relates to the larger questions, our lessors have been very supportive during the crisis. We have an ongoing almost daily dialogue with them to arrange for the return of aircraft and continued deferrals. And we are also converting a large chunk to power by the hour. And to pay for the utilization, which is a real win-win for both the leasing companies and us as we navigate through this crisis, in our cost and keeping our cost advantages. And so that is also that is the largest net, if you will, for GOL 2/3 of the GOL that is the operating lease fleet that we have. So that most of our lessors have been very supportive. We're in the final phase of that. And so when I mentioned that the successful maintenance of our liquidity and the expected cash burn, the main variable in there that I'm highlighting is the finalization of our negotiations on our fleet, which is 100% operating lease. We've got around 50% 50% of that, six aircraft is concluded. And it's a combination of deferrals, haircuts, power by the hour, it's a combination of various factors. But we expect, over the next 30 to 60 days that we'll finalize that component, which is a very important component. So that's really what I'm what we're saying there in that is that, as you know, we have our deal with labor gun. We have all the work we needed to do with our commercial banking and working capital relationships done and for the most part, with suppliers. And the final piece that we're going to be concluding over the next 30 to 60 days will be the finalization of the changes as it relates to our aircraft portfolio. So that's really what I'm saying there. And that is it's an important component. The objective is we're going to match our capacity to demand on the other side of this. We made some small adjustments to the fleet plan as you can analyze through some small calibrations around what we're doing there. But probably the most important component was which we still require significant support from our various stakeholders is with the operating lessors that we're working with. And so that's really what