Hello, everyone, welcome to Azul's second quarter earnings call. My name is Zach, and I will be your operator for today. This event is being recorded, and all participants will be in listen-only mode until we conduct the Q&A session following the company's presentation. If you have a question, click on the Q&A icon at the bottom of your screen and write your name and company. When your name is announced, please turn your microphone on and proceed. For those who are listening to the conference on the phone, press nine to join the queue and six to accept the audio when requested. I would like to turn the presentation over to Thais Haberli, Head of Investor Relations. Thais, you may proceed. Thank you, Zach, and welcome all to Azul's second quarter earnings call. The results that we announced this morning, the audio of this call, and the slides that we reference are available on our IR website. Presenting today will be David Neeleman, Azul's Founder and Chairman, and John Rodgerson, CEO. Alex Malfitani, our CFO, and Abhi Shah, the President of Azul, are also here for the Q&A session. Before I turn the call over to David, I'd like to caution you regarding our forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives, and expected performance, constitute forward-looking statements. These statements are based on a range of assumptions that the company believes are reasonable, but are subjected to uncertainties and risks that are discussed in detail in our CVM and SEC filings. During the course of the call, we will discuss non-IFRS performance measures, which should not be considered in isolation. With that, I will turn the call over to David. David? Thanks, Thais. Welcome, everyone, and thanks for joining us for our second quarter 2023 earnings call. This quarter was one of the most important in our history. I could not start without recognizing the impressive work of our leadership team. In this quarter, we made significant progress on our comprehensive and permanent capital optimization plan, leading to a successful conclusion in July. John and Alex, together with their skillful teams, successfully implemented our plan, which included new agreements with lessors and OEMs, and an exchange offer, and new money and a new money raise. John will give you more details later. It is absolutely incredible what they were able to achieve, all of this in just a 6-month window. I also want to thank all of our partners and investors who supported us throughout this process. Together, we have delivered a true win-win solution that we promised on the outset, one that is value-maximizing for all stakeholders. I thank you for your vote of confidence, and in our company and in our future. Finally, most importantly, I have to thank our passionate crew members, who continue to deliver excellence every day. Without our industry-leading operation, customer service, and a company that produces over BRL 1 billion EBITDA per year, none of this would have been possible. Thanks to their continued efforts, we're now in a position where we can put the crisis behind us, and we can focus on the future. Turning to slide four, you can see that our network is stronger than ever. Our superior, our superior business model and structured competitive advantage allow us to connect all of Brazil. We are the only carrier in 81% of our routes and fly to over 160 destinations, 3 times more than our competition. We are the leader in more than 90% of our routes, which supports our industry-leading profitability. During the second quarter, we launched our expanded Congonhas service, more than doubling the daily departures, now serving all of the top corporate destinations. In addition, we launched our newest international destinations, Paris and Curaçao. Both of these are off to a very strong start. On slide five, you can see the outstanding performance of our business units this quarter. Our loyalty program, Tudo Azul, more than doubled in gross billings versus 2019 and is clearly benefiting from our new Congonhas flights. Sign-ups to the program have increased more than 80% since we launched our expanded Congonhas schedule. I could not be prouder of, of our vacations business, which has had another exceptional quarter, with more than a 40% growth in gross billings compared to the second quarter of 2022. This business is now four times the size in terms of net revenue than in 2019. Azul Viagens is the second-largest vacations agency in all of Brazil, we continue with our strong growth, expecting to double our stores to more than 100 by the end of this year. Azul Cargo, our logistics business, continues to be the largest air logistics provider, with a domestic market share of 34%, with net revenues more than double compared to 2019. As I said, this is an important quarter for us. I could not be prouder of how the entire team has pulled together to deliver these amazing results for our shareholders. With that, I will pass the time to John to give you more details on our second quarter results. Thanks, David. I would also like to thank our crew members for their incredible work. Every day, every day, I see how passionate and caring our people are for each other and our customers. It is this special culture that will fuel our company for years to come. Turning to the numbers, I would like to highlight our record results, as you can see on slide six. In the second quarter, we achieved record revenues for a second quarter of 4.3 billion reais, 9% up versus second quarter of 2022. Revenue in the second quarter of 2023 was up an impressive 63% compared to the same period in 2019. Yield and RASK were also second quarter records at BRL 0.468 and BRL 0.404, respectively. Our EBITDA grew a remarkable 88% year-over-year, reaching an all-time record for a second quarter of BRL 1.2 billion, with one of the highest margins in the industry at 27%, 11.4 percentage points higher year-over-year. As you can see on slide seven, our EBITDA increased 58% versus second quarter 2019, even with a 60% increase in fuel prices. This is a clear demonstration of the strength and the resiliency in our business. Our structural competitive advantages, combined with our rational and profitable growth, allow us to expand earnings in any macroeconomic scenario. On slide eight, you can see that average fares were up 6% versus last year, while fuel prices dropped 24% year-over-year. This is a very positive sign when we are as we transition into the seasonally strongest part of the year under a very constructive demand and pricing environment, in contrast to what you're seeing in other regions in the world. As you can see on slide nine, we continue to effectively manage our costs, with a 10% decrease in CASK year-over-year. This is mainly driven by the reduction in fuel prices and by our cost reduction initiatives and productivity gains. Just to give you an example, a record 76% of our customers now use automated self-service tools for their check-in. In addition, productivity measured by ASKs per full-time employee has also increased, with the company now generating 13% more ASKs per FTE than in 2019, this is with an on-time performance of 87%. No small feat. In addition, our fleet transformation and fuel savings initiatives resulted in a 4% reduction in fuel consumption per ASK compared to last year. We have the lowest CASK in the region, even with a diversified fleet and lower average aircraft size. As we promised you, we are now a more efficient airline and better than ever. Azul has one of the highest EBITDA margins in the industry, as you can see on slide 10. The strength of our revenue performance, efficiency of our next-gen fleet, growth in our business units, and world-class customer service directly led to these results. As David mentioned in the opening remarks, we've now concluded our capital optimization plan. This was an incredible achievement in such a short period of time. I join David in thanking our teams, our partners, for their dedication and their support. On slide 11, we remind you of the pillars of our plan. As announced before, we successfully reached agreements with lessors, OEMs, to exchange COVID deferral payments into a combination of debt and equity. We also agreed with our lessors to make mark-to-market adjustments on our leases, with any differences to the original lease rates also being exchanged for a combination of debt and equity. Lessors and OEMs agreed to receive an unsecured tradable note maturing in 2030, with a coupon of 7.5% a year, and an equity instrument convertible into preferred shares, to be issued quarterly installments commess- starting at the end of 2024, with all issuances to be completed by the end of 2027, and minimal dilution to our shareholders of roughly 17%. The next step in the plan was the restructuring of our debt obligation, which is why in June, we launched a par-for-par exchange offer to extend the maturities of our 2024 and 2026 notes to 2029 and 2030. We successfully concluded this offer in July, with an aggregate acceptance rate of 86% of the principal outstanding. The final step was a new capital raise, which was concluded in July, with the issuance of $800 million in bonds maturing in 2028. The offer was 3x covered, enabling Azul to obtain the lowest coupon among our peers in the region. The success of our comprehensive plan clearly demonstrates Azul's ability to execute and represents a significant vote of confidence in our company by the market and all of our stakeholders. I just want to remind everyone that this entire process was done amicably with our partners and stakeholders, based on the guiding principle that our partners would receive 100% of what was committed to them. We always believed that this was the value-maximizing solution for all, and I'm happy to say that this is what we have achieved. On slide 12, we show you the updated amounts related to the reduction in our lease payments, resulting from our lessor negotiations. As you can see, we are reducing our annual lease payments by BRL 1.5 billion in 2023 and over BRL 1 billion in 2024, taking our recurring annual rent to below BRL 3 billion. In summary, the plan delivered the lease payment reductions we were targeting to optimize our cash flow and enable our future growth. On slide 13, you can clearly see the runway that we have created. We have no significant maturities for the next five years, another key targeted outcome from our plan. Both in terms of yearly cash flow and future debt maturities, we overachieved versus what we expected. We now have a strong balance sheet and liquidity to match our industry-leading operating performance. As you can see on slide 14, the second quarter leverage organically decreased a full turn from 5.2 to 4.2 as we paid down debt and increased our EBITDA. This is even more impressive, considering it does not yet reflect the reduction in leverage expected from our capital optimization plan. With the reduction in lease liabilities from our successful agreements with lessors, our de-leveraging process will accelerate. You can see that by the end of the year, leverage will reduce almost another full turn to 3.5 i n line with the guidance we gave last quarter. We also remain with our expectations to end 2024 with a leverage of 3, in line with our pre-pandemic levels. This leverage also includes the 2028 senior secured notes issued in July, and the 2030 unsecured notes to be issued to lessors no later than September. As a result of the optimization plan, all three rating agencies have already upgraded Azul, reinforcing our financial health going forward. On slide 15, we show our view on Azul's valuation. With our optimized balance sheet, positive cash flows, high liquidity, and earnings growth, our current multiple should be closer to our historical levels versus the 4.5 we are trading at now. There is significant upside in our market valuation. I truly believe this. I look forward to having this discussion with all of you and our investors in the days and weeks to come. Wrapping up on slide 16, I just want to remind everybody that our senior leadership team spent countless hours on this plan, and having successfully concluded it, we can now turn our efforts to our business and all of the opportunities ahead of us. Our fundamentals are strong, our business model is unique, our upside is clear, and most importantly for me, our crew members are as passionate as ever. Once again, I want to thank all of our crew members, our partners, and our stakeholders, and our investors for all their support. What we have achieved together is remarkable, and the best for Azul is yet to come. With that, we're here to take your questions. Ladies and gentlemen, thank you. We will now begin the Q&A session. Remembering that if you have a question, click on the Q&A icon at the bottom of your screen and write your name and company. When your name is announced, please activate your microphone and proceed. For those who are listening to the conference on the phone, press nine to join the queue and six to accept the audio when requested. Let's move on to the first question. It is from Filipe Nielsen, sell-side analyst from Citi. Please, Felipe, we will open your microphone so you can ask your question. Let's start- Hello? Hi. Hi, guys, can you hear me? Yes, we can hear you, Filipe. Go ahead. Thank you. Thank you very much, guys, and thanks for taking my question. I have two questions on my side, and congrats on the results. The first one would be on the international corridors. I saw that I know that we, we have in Brazil some backlog of U.S. visa tourists, tourist visa, a line for people to issue new visas and, but we know as well that there are some corridors that might be performing well. We, we saw in this quarter, you guys, continuing to shift aircraft from cargo to international corridors using wide body. I'd like to understand which are the markets where you see more, more opportunities in terms of international? The, the second question would be, in terms of the, the adjustments that you made, on EBITDA, in this quarter. Just wanted to hear your thoughts and some extra clarification about the adjustments made in the EBITDA. Thank you. Yeah. Hi, Filipe. Abhi here. I can start with the first part about the international. You're right, you know, we are happy with the performance of the international network. Our international capacity in 2023 will be larger than 2019, so we are fully recovered and more in our international capacity. You're also right that last year, especially, we had some wide bodies flying dedicated cargo missions to Brussels, to Fort Lauderdale, and even domestically in Brazil. We've now shifted them to our international long-haul passenger network, and the market's holding up very well. In general, what you're hearing from other airlines is true for us as well. The European market is doing better, but the U.S. market is strong as well. We have great partnerships with JetBlue and United in the U.S., and with TAP and Air Europa in Europe, that allows us to feed lots and lot of cities beyond our gateways. We have Campinas, our main hub, but we also have Recife and Belo Horizonte. We're connecting our strongest hubs to the strongest hubs of our partners as well. Overall, we're very happy. Unit revenues are significantly higher this year than 2019, and we expect that to continue. Overall, we're fully recovered and larger, and we're happy with the results of the international network. Yeah, and Filipe, on the adjustments, they're mainly tied to the capital optimization plan that we talked about. There were, as you know, a lot of negotiations with lessors. Some of these negotiations, we were actually able to early deliver some aircraft that we did not want on our fleet. You know, you all know how excited we are about our fleet transformation, you know, and how we want to replace all of our old generation Embraers, which, you know, worked great for us to start the company, but now we have much better aircraft on the Embraer E2 and the A320neo. With the demand the way it is today, there were some opportunities for us to accelerate the exit of some aircraft. When you do that, you have some costs that are not recurrent, so you have to adjust, for example, the expected Right-of-Use that you would have on that aircraft. You expected the aircraft to remain on the fleet, so for a certain number of years and all of a sudden, you know, it's not gonna stay for that number of years, that creates a one-time impact on the P&L that is not recurrent. So we remove that from the results so that you can have a better perspective on what the result of the company will be going forward when we don't have that effect anymore. You know, we're proud of having followed the approach that we did with our restructuring, as opposed to, you know, a more combative and longer and also more expensive approach that some of our competitors took. There is still some costs, right? You still have some advisors and lawyers, and, you know, one-time fees involved in the structure, so we also remove those. Those are mainly the main drivers of the adjustment that we had this quarter. You know, Azul has 185 aircraft, almost every single aircraft was renegotiated. As Alex said, some were redelivered early, and it's just kind of part of the process. We feel very good about where we're at. We had the ability to have a few E1 exit earlier, we're very confident that going forward, we'll be able to continue to kind of expand margins even further. Great. Thank you very much, guys. The next question comes from Victor, sell-side analyst, Bradesco BBI. Victor, we're going to open your audio so that you can ask your question. Please proceed. Hi, thank you. Congrats for the results and the restructuring. I have two questions here. The first one is related to your fleet plan, right? Now that you've concluded all this restructuring, I don't know if you can give additional details about the fleet plan for this year and the next. My second question is related to block hours, right? We can see an improvement, but if we compare with a pre-COVID level, I mean, you were talking about something at around 11 hours per day, and now it's at 9.8. How fast do you believe that's possible to reach these kind of asset utilization level? Thank you. Just starting quickly on the fleet, obviously, you know, all the OEMs are late, you know, including Embraer and Airbus and others. You know, we expect Embraer to, you know, fix most of their issues by the end of this year and into next year. We have a significant amount of E2 coming in to replace older generation aircraft. Every time we take an E2, it's currently, you know, the most profitable thing we do, because we get rid of E1. We up gauge that aircraft even further from 118 seats to 136 seats with fuel burn that's about 25% lower per seat. We're pretty excited about that. The next 2 years is really the E2 years for Azul, and so you're going to see a significant improvement in the fleet going forward. I'll let Abhi talk to the utilization. Yeah, hi, Victor. We did make improvements in utilization year-over-year, up 6.87%, which is a very good sign. It's a reflection of the fuel prices coming down as well, which allows us to add more flying on weekends, more flights at night, stretching out the day. We are making our way back to pre-pandemic utilizations. We will continue to see sequential improvement in this number in 3Q and 4Q as well, as we redesign the network, as we take advantage of all the pockets of opportunity out there. We do have to be a little bit careful because fuel is still higher compared to pre-pandemic levels, and so we want to make sure that as we stretch the day out, we don't lose the quality of the revenue. That is the balance that we're striking when it comes to utilization, but I fully expect that we're going to continue to make progress, and over the next quarters, you will see us get closer to that 11 hours number. This is the big debate internally. Alex and Abhi have this every single day. We know that's the greatest leverage we have. Increasing the utilization, it's going to decrease our CASK overall and make us a more profitable company going forward. Thank you. Okay, thank you. The next question will come from Gabriel Rezende, sell-side analyst from Itaú BBA. We're going to open your microphone so that you can ask your question, Gabriel. Please proceed. Thanks, and congrats on the results, guys. I would like to talk a little bit about profitability, given the, the strong 27% of the margin that we saw in the second quarter. Two, two questions on that front. You managed to, to reach this strong level despite the second quarter seasonality factor. If you could just touch on the, the, on your view, on what levels should we be thinking about in terms of EBITDA margins looking forward, considering the improving operational leverage you might reach in the second semester, that would be great. Also on this subject, if you could provide a little bit of more color on your personal expenses- your personnel expenses. We saw a 26% increase year-on-year, which was higher than the increase in ASKs in the period, both quarter-on-quarter and year-on-year. Should we expect the level to be maintained in the next quarters as well, or was there some one-off effect in the second quarter that should not repeat going forward? Thanks. Those are my two questions. Thanks, Gabriel. Yeah, so, we're confident on the $5.5 billion EBITDA guidance that, that we gave out, right? The guidance that we gave on EBITDA on capacity and on leverage are all, you know, still valid. We had things moving in different directions, right? We had the PIS/COFINS that was approved, which is positive. We had the fuel curve moving up, which obviously is a headwind. We, you know, like John said, we have so much opportunity that we wanna tackle, that we are confident that we can deliver on a BRL 5.5 billion EBITDA for this year. That's what we're gonna be working on for, for the next few months. Then, you know, make sure that we have great momentum going into the next year, where the EBITDA, you know, can expand even further, right? You know, at least starting with a BRL 6 billion, which is something that we're very excited about. The 2nd half is where most of that profitability comes from, because, you know, that's how our seasonality works, as you pointed out. The 2nd quarter is the weakest quarter in the year, and now we're entering a 3rd quarter, which is gonna be better than the 2nd, and then a 4th quarter that's gonna be better than the 3rd, which is something that's very exciting. And still, you know, in terms of EBITDA production, we are at our record, as we pointed out, but there's still upside on the margin, right? We are still working to recover margins. Our 2Q margin was still lower than 2Q 2019, and even delivering on the BRL 5.5 billion EBITDA for the year, it will still be a lower margin than the margin that we had in 2019. That's why we're excited about 2024 and beyond, because we wanna get back to that EBITDA margin that we had in 2019, and we think we can go even farther, right? Because we didn't have the performance in 2019 of the business units that we have today. We didn't have the, you know, 80% plus of next generation capacity. You know, we didn't have Congonhas. So there's a lot of opportunity for us to go even beyond the margin that we delivered in 2019. You're also, you know... I referenced it in the script, you know, we now have the full focus of our management team on running the business, as opposed to fixing the balance sheet, right? As you look at how do we fully optimize Azul, how do we fully optimize the utilization levels of the airline? How do we extract as much out of all these business units? That's how we're going to move forward. Again, as I said, you know, previously on the fleet plan question, there's a lot of E2 coming, and those E2 are very profitable. There's more A320s coming. We're exiting out. We still fly more E1 flights a day than we fly E2 flights a day, right? That's a significant amount of upside going forward. Yeah, and on the personnel side, let me give you some guidance I think will help you, you know, with your estimates for the rest of the year. It is a tough comp in 2Q because of what happened in 2Q 2022. We had, you know, phantom options as part of our long-term incentive plan, you know, and they are very volatile. That's one of the reasons that we're going back to regular options as part of our long-term incentive. Last year, you know, the stock price went down in the second quarter. The market was, you know, getting nervous, and that actually reduced our personnel expense because we recognized a reduction in the long-term incentive expense accrual. That should not happen anymore going forward. You know, right now, with actual stock options as part of our long-term incentive, you just calculate the cost of those options and then recognize that over time, the volatility is a lot lower. We're also gonna get economies of scale, right? Because obviously we're gonna fly a lot more. Abhi talked about the increased utilization we're gonna get in Q3 and Q4. You can look forward to a reduction in labor CASK from Q2 to Q3 and Q4, probably in the mid to high single digits. You will see our labor CASK going down into the back end of the year. Thanks, Alex. That was very clear. Thanks. Thank you. Okay, let's move on to the next question, which will come from Savanthi Syth, sell-side analyst, Raymond James. Savi, we're going to open your microphone so that you can ask your question. Please proceed. Hey, good morning, everyone. I was curious on the domestic market. I appreciate the color you gave, Felipe, on the international. On the domestic market, I was wondering if you could provide a little bit more color on leisure versus business. I've noticed kind of capacity is being mostly kind of trimmed as you get closer in, so just updated thoughts on kind of capacity growth here in the domestic market. Yeah. Hey, Savi. Yeah, absolutely. You know, we feel really good about the trends that we're seeing coming out of 2Q into second half seasonality. July especially was very resilient in terms of flowing unit revenues and bookings as well. In terms of demand, domestic demand, for example, the last 4 weeks, 2 of them, corporate volumes have been 100% of 2019. This is the first time I can confidently say that we've actually recovered 100% of corporate volume. Average fares are up 40%-50%, so corporate revenue is up 40%-50%. In terms of volume, it's very, very good to see that we've now recovered 100%, and this is a sample of 4 weeks, 2 out of these 4, the other 2, very close. In terms of pricing environment, I think the industry, you know, is doing everything correctly, in terms of what needs to be done to take advantage of second half seasonality. Obviously, the run-up in fuel as well. Our booked average fares the month of July were higher than last year, and that's with the reduction in fuel year-over-year. Our booked average fares, now are 30% above what we were seeing back in May. I think, you know, the trends are very positive. Finally, on the capacity side, as you correctly said, capacity is being trimmed. Year-over-year capacity in the second half of the year is actually lower than what we saw in 2Q. We're gonna be coming into a favorable demand environment, a favorable pricing environment. The industry this year, domestically, is gonna grow less than what the U.S. domestic market is doing. We're gonna grow about 3% versus 2019. 3% growth over 4 years, it's about, about roughly half what the U.S. market is doing, you know, that's why we feel good about continuing to increase RASKs. Last year, tough comps, all-time record RASKs, we think things are set up to kind of repeat that this year. Demand environment, very solid, pricing environment solid, a favorable capacity discipline as well. That- that's super helpful. If I might ask, just I know the cargo environment has softened, but it seems like it's still healthy. Just curious what the revised plan is for setting up the logistics unit that you were working towards? Yeah, look, you know, you're right. It's international cargo especially that is weak, and you've seen reports from LATAM, Avianca, Turkish, you know, seeing international... UPS. It's mostly international cargo that is down, especially on the yield side. Our domestic logistics business keeps growing. It's growing about mid to high single digits, and that's still very encouraging. Also remember that our freighter exposure is very, very limited. We have two 737 freighters and a couple of four E-jets here in Brazil, so, all, all for domestic purposes. We still continue to believe that Azul Cargo will transform logistics in Brazil. There's still a huge opportunity in getting e-commerce out to the rest of the country. Domestically, you know, it's still growing, not as fast as last year, but we're still about 2.5 times bigger than 2019. International is a challenge, it's gonna be a challenge, but we're 85% domestic, and that's continues to be our focus. Also, Savi, I think there was a boom post-COVID international that everybody got to ride that wave, but it's the network we built domestically, which is the strength of our cargo business, and that's the greatest advantage we have. The fact that we fly to 160 cities in Brazil, compared to 50 of our next closest competitor, and the majority of those 50 cities that our competitors fly to is really truck cargo, right? We're flying all throughout Brazil, and that's the advantage that we have. Super helpful. Thank you. The following question will come from Michael Linenberg, sell-side analyst, Deutsche Bank. We're going to open your microphone, Michael, so that you can ask your question. You may proceed. Can you guys hear me now? Now we can. Okay, sorry about that. Let's see here. Sorry, I'm getting just the echo on this. Hold on. All right, I'm gonna try this. Sorry about that. Let's see. Just, with respect to, you know, in the release, Alex, you talk about, you know, finalizing in September, your agreements with the lessors and the OEMs. Presumably, that's just, you know, dotting your I's, crossing your T's. Is there anything else in that that we should expect, like with respect to CapEx, you know, later this year, what your CapEx plans are for next year? What, you know, what else needs to get done, you know, other than maybe what you've shown in the release here? Thanks. Thanks, Mike. Not much. Yeah, it, it is a bit of dotting the I's and crossing the T's. It's also issuing the unsecured 2030 note that's part of the negotiation with the lessors. You know, implementing the equity instrument that we negotiated. You know, those are all kind of conditions subsequent to all the agreements that we have signed, but then now we need to deliver on those mechanisms. In terms of CapEx, you know, this year is still gonna be a, a lower than sort of our recurrent CapEx year. In terms of recurrent CapEx for your modeling, I mean, we talk about something in the BRL 1.8 billion-BRL 2 billion. You know, to remind everyone, this is all maintenance CapEx. We don't have CapEx coming from new aircraft, 'cause we... you know, most of the aircraft that are coming are gonna be under operating leases. Mm-hmm. Over time, we would like to, we would like to do some capital, some finance leases, but you don't need to expect any cash outflow from new aircraft. It's all about, maintenance, especially engine overhauls. Hey, Mike, if I could just add one thing. Although the documentation is still being finalized, we're paying the new rents, we're acting under the new agreements. We've already had celebratory dinners with the lessors on the agreement, because the capital raise happened in July, and this all kind of, you know, follows suit from there. No issues at all. For full disclosure, we have one lessor we didn't get over the line, represents less than 4% of our, of our total leases. It's actually, as somebody just pointed out, that it's 2.7%. You know, and, and we're still talking to them, but, you know, we're done, we've turned the page, we're moving forward. One other, can you just tell me what your liquidity will be in rough numbers at the end of September? I mean, if I use sort of the BRL 5.5 billion as a base, which was the end of June, you incorporate the $800 million, there's probably some put-ins and takes there. What would be a good liquidity guide that you could provide us? Yeah, we, you know, we, we have some payments that we made right on the 2024 note, right? Mm-hmm. There was, I think, a 19% pay down on who accepted the exchange. We have some advances that we had gotten from one of our lessors. We are paying down some of our convertible debentures. When you kind of bake all of that in, we're gonna be between R$4 billion-R$4.5 billion. Okay. Then just one quick last one. You know, your other revenue has obviously been an area of good strength for you when I think about your vacation business and Tudo Azul, it is down year-over-year, that's obviously being driven by cargo. Can you tell us, if we were to pull cargo out of that, what the other ancillary businesses would be up on a revenue basis? Maybe rough numbers. Thanks for taking my questions. Yeah, Mike, just on that line, essentially that's all cargo. There's a little bit of charter on it. Okay. Everything else in terms of Tudo Azul Viagens is on the passenger side, right? Ah. Tudo Azul is growing a lot. Azul Viagens is growing a lot. Cargo domestic is growing, like Abhi mentioned, but that line is basically cargo and charters. Okay. Okay, thank you. Okay, moving on to the next question. It will come from Guilherme Mendes, sell-side analyst, JP Morgan. Guilherme, we will open your microphone so that you can ask your question. Please proceed. Good morning, everyone. Thanks for, for taking my question. I have two follow-up questions actually related to you and, and fuel. Abhi, to your point on, on passing through fuel costs, I mean, how fast do you think you, you managed to pass through a potential additional increase on, on, on fuel prices? On the same topic, how do you guys think about your hedging strategy going forward? Thank you. Yeah. Hey, Guilherme. Look, I think, you know, the industry has, at every turn, tried to do the right things and done the right things in terms of recapturing these costs. We, of course, have additional benefits in terms of controlling our own destiny, because so much of our network is by ourselves, and so we can always be testing and always be managing our own, not having to wait for the industry to catch up. So I'm, I'm optimistic. I mean, just look at, you know, what we've been able to achieve in terms of average fares in 2Q, a seasonally weaker 2Q, versus a post-Omicron 2Q last year, and we still had higher average fares. So, you know, with, with corporate demand coming back strong, our corporate survey tells us that corporations will fly more the second half of the year. With capacity discipline that we are seeing, I think it's a continuous process, but I'm confident that the industry and us are gonna do the right things to, to make it happen. Yeah, on the hedging side, I think, you know, your question makes a lot of sense because they do go together, right? The, the more pricing ability we have to pass through cost increases to fares, the less hedging we need to do, right? I don't think any airline's gonna tell you that they are able to predict whether oil prices are gonna go up or down better than the market, right? If they say that that's their, you know, competitive advantage, you know, I would kind of run away from, from that because, you know, hedging is insurance. We expect insurance to cost us a little bit of money, and we expect hedging to cost us a little bit of money in terms of the premium. We always monitor our ability to pass through cost increases to fares together with our hedge position. Now that we see demand, you know, continuing to be strong, we see a seasonally strong quarter coming, coming in, we don't need to be hedged as much. We're around 15%-16% right now. I think the whole industry is somewhat light on hedges. I think that makes a lot of sense. We want to hedge the inventory that we have already sold. That inventory, we cannot do anything about, but the future inventory, we're very confident on our ability to continue expanding margins to try to get back at least to the 2019 levels. Yes, it's true that fuel prices went down, you know, significantly year-over-year, but they did go up from the last quarter. They're still much higher than they were in 2019, right? I think it's important to remember that they're still much higher than in 2019. Super clear, guys. Thank you. Have a great day. Thank you. Going on to the next question. It will come from Neil Glynn, sell-side analyst, AIR Control Tower. Neil, we will open your microphone so that you may ask your question. You can proceed. Thank you for taking the questions. If I could ask two, please, both with respect to the recent negotiations on capital optimization. The first one on currency, really. Back at the end of the first quarter, you were hoping for BRL 2.9 billion of lease payments in 2024, and I notice the real has obviously strengthened against the dollar since this time. I'm just interested as to whether- ... The updated payments fully reflect recent recovery of the real against the dollar? If you could give us some feel for your exposure to potential further real recovery on the dollar for lease payments. The second question, security deposits and maintenance reserves are obviously a large part of your balance sheet, at about $2.6 billion, at June. Should the lessor negotiations that are now largely that are now resolved impact this part of the balance sheet? Should that have any ramifications for cash flows over the course of the next few months? Thank you. Thanks, Neil. The lease payments that we provided on the presentation, they do reflect an exchange rate of 4.82, which is the exchange rate at the end of Q2. If, you know, they are all dollar-denominated, and they do fluctuate with the exchange rate. If the, you know, 4.82 is roughly where the exchange rate is today, if you see further strengthening of the real, those numbers can come down. If you compare those numbers to the communication that we sent out last quarter, which also had the breakdown of the 2023 and 2024 lease payments, the changes that you see there are mainly from FX, but also from additional aircraft that we took delivery of in that, in that time frame. You know, those numbers should be the latest information with the latest FX. In terms of security deposits and maintenance reserves, yes, those were part of the negotiations with the lessors as well. There is a change there. Normally you would see that balance increasing over time as we increase the size of the fleet, and also as the fleet aged. Right now, you should see them staying stable. As we execute on maintenance events or return aircraft, those maintenance balance will go down. It will take a few years for those maintenance balance to go down, but they will happen because we negotiated that we won't add to the balance of the maintenance reserves, and then we will draw up on those maintenance reserves as the maintenance events are delivered and the aircraft are returned. You know, I think that's one big thing, big difference that, you know, is not reflected in the market, is that not only did we do mark-to-market on the leases, not only did we deal with the COVID-related deferrals, we also dealt with security deposits and maintenance reserves on a going-forward basis as well. So that's not a P&L impact, but it's certainly a cash impact over the next five years. So, you know, as we became a much better credit profile for the lessors, they understand that that's good for us, and so, you know, there, there's a reduction, significant reduction going forward in those payments. So that's additional benefit to our cash flow over the coming years. All right. Moving on to the next question. It will come from Lucas Barbosa, Sell-Side Analyst, Santander. Lucas, we're going to open your microphone so that you can ask your question. Please proceed. Lucas sent us his question online, so I think I can read it. Essentially, he would like to know more on the CapEx line related to aircraft and maintenance and checks. It was around $140 million this quarter. In 1Q23, it was much lower, and in 2Q22, it was lower as well. If there was any concentration of maintenance this quarter, and what these levels should be in the coming quarters. Yeah, so, you know, the... I think Q, especially 1Q, was particularly low, and we were preserving cash. We knew that we were going to have negotiations with lessors and OEMs. We're gonna have new commercial terms with both of those groups of stakeholders. So I think it was more that 1Q was low. I think 2Q is still low. Like I said, I think you should project in total CapEx, which includes this line, something between BRL 1.8 billion-BRL 2 billion on a go-forward basis. Gross, you know. Okay, this closes our Q&A session. We will now move on to John for the closing remarks. Thanks, everybody. We appreciate your time today on the call. Alex, myself, Thais, will be on the road meeting with many of you in the upcoming months to kind of further update you on the story. We're excited about where we are. Seasonally strongest part of the year ahead of us, you know, full dedication of this management team to continue to build the greatest airline in the world. Thanks, everybody. Thank you. This concludes Azul's audio conference call for today. Thank you very much for your participation, and have a great day.