Gol chief financial officer Richard Lark says the Brazilian low-cost carrier will use US Export-Import Bank financing if it resumes direct Max deliveries with Boeing.
Speaking at the Airfinance Journal LATAM 2020 virtual conference, Lark said Gol is under no obligation to take deliveries of Max aircraft until 2022.
In April 2020 the Brazilian carrier agreed with Boeing to terminate a 34 Max order.
“We reduced our firm commitment to 95 aircraft from 139, and we have the flexibility to reduce down further. We eliminated the requirement to take any deliveries for two years. We had some R0.5 billion compensation reimbursement,” he tells delegates.
Gol plans to finish the year with 124 aircraft, 13 fewer aircraft than at the end of 2019. The low-cost carrier will take delivery of three 737NGs this year but return 16 NGs. It has seven Max in its fleet. The carrier plans to end the year 2021 with similar fleet but with 15 Max aircraft.
Lark reveals that in January 2020, Gol was planning to use cash as a way of financing aircraft. “This is off the table now as cash is focused on other priorities,” he says.
At the end of the second quarter, Gol’s liquidity amounted to R2.1 billion ($393 million).
“We have seven Max aircraft on the ground. We have others that are committed to and are on the ground in Seattle. Those are transactions we had already done with our leasing partners. The third category are direct operating leases, but we don't plan to take any delivery for a foreseeable future,” he says.
"Next year will be about cleaning up previous commitments we have made with our operating leasing partners."
“If we take delivery of our orderbook, we primarily count on Ex-Im guarantee financing, and we will use the remaining 15% using our cash,” he says.
Gol has no pre-delivery payments line up this year but those will come back in if Gol decides to take deliveries in early 2022, he says.
The Covid-19 pandemic has severely impacted Brazil, Lark says. The fatality rate peaked in July and started to trend down in August.
Lark says demand is returning in Brazil. “The domestic traffic was at 30% of pre-pandemic levels as of last week.”
“We plan to end the year with 80% of frequencies and markets,” he adds.