Mario Liao: So the first one, let me ask you first the exchangeable first. So, this quarter, we issued the SSN right that it converted about $1.2 billion of from the previous SSN. And if you look to the financial statements, you still have some portion around $100 million of SSN that has still not been converted and is still sitting in the balance sheet. So you still have those two instruments in the balance sheet. But the major portion of the SSN has been already converted. And we followed by the IFRS accounting rule by converting into a SSN that is a convertible instrument, we need to split out two components. So first is the adapt portion what is going to be the fair value of that portion. And the second is to value what is going to be the implicit option, the embedded option because this is a convertible instrument.
There’s going to be splitted in a different line of the balance sheet. So, you see that in the loans and financings, the regional SSN now is recorded BRL3.4 billion. So, it’s about $680 million. And the separate component that’s related to that derivative is splitting in another line. So, we are just following what is required in terms of accounting rule because this is kind of a convertible instrument. And of course, by the end of the material or conversion or even in the material of this debt the lender the Abra will continue to collect the same 1.2 billion. So, but the books tended to reflect the time value for this option feature. So, if you add the two components in aggregate, you’re probably going to take the same amount. And this fair value of the option will be value each quarter.
But that’s already reflected kind of a derivative instrument that go against the equity. That’s why it is not considered as a dept anymore. Does that answer your this last question for you?
João Frizo: Yes, super clear.
Mario Liao: And the second was related to the guidance, right? So, if you look to what we did specifically, everything was correlated to the fact that we reduced the number of operating fleet. And that was a result of that impact that we answered in the previous questions related to the lower number of MAX to be delivered. At the same time, we are still keeping the same rate of deliveries that that’s one of the main efforts that we are implementing in order to reduce that gap with between the total fleet and the operating fleet. So, the reducing in terms of new deliveries has been reducing the number of ASKs, actually, the ASKs didn’t change, but because we were in the middle end of ASK and now we’re moving much more into low end.
But you can see that in terms of seats and also departures, we were in the low end and now we reduce that guidance related to seats. So, we are considering less departures and of course that is been impacting a lower number of revenue. You mentioned about RASK. We expect that yields is going to be more stable, but at the same time, RASK, that is related to the contribution from loyalty and also from cargo, especially cargo because of the reduction in terms of the ASKS, so the capacity on the value of the aircraft also going to be impacted. And if you look to especially the revenue performance for this quarter, even though yields has been increased by 4.5% quarter year-over-year. The RASK increase about 11% and has been mainly driven by the ancillary revenues.
That potential impact in terms of capacity will be also lower. The contribution on the RASK coming from ancillary revenues going forward, and that’s why you have a lower revenue increase in the guidance.
João Frizo: Thank you very much guys, super clear, and just if I may, just a follow-up on the secured notes. If I am not mistaken, you guys have not drawn everything you could draw from the BRL450 million in cash you could do. Could you just update us on how much have you guys already withdrawn with the SSN?? And how much is left? Thank you.
Mario Liao: Until the second quarter it was around BRL200 million that has been drawn, that’s why we convert from the up to BRL1.4 billion of the SSN. We have been converting something about BRL1.2 billion. In this quarter, we utilized primarily for the CapEx essential activities like acquisition of spare parts or something additional BRL50 million roughly.
Operator: Our next question comes from Victor Mizusaki from Bradesco BBI. Please Mr. Victor your microphone is open.
Victor Mizusaki: I have two questions here. The first one, you mentioned in the presentation that you have six options for cargo freighters for 2024. So my first question is. What do we make you exercise these options, I mean, can resume that maybe you can announce a bid contract maybe in Q4 or next year to tweak these options? And the second one is related to the leasing contracts. In the income statement, I think that you book like a BRL60 million of gains with leasing negotiations. So, can you give additional details about this? Thank you.
Celso Ferrer: Hi, Victor, good morning. So, on the cargo options that we have, we are — the first commitment was the six aircraft and the number six is now arrived in October. And from the seventh to the 12th, we go one-by-one, we don’t need to go like an additional six. And this is what we are working close to Mercado Libre to understand the demand environment. And, of course, they do their forecast, and we are working to make sure that until the end of this year, we have a clear picture because we need to commit well in advance with those planes. So, we are working with lessors especially on our returns. If we can combine at lease return that we have on our existing passenger fleet to a conversion into cargo, that’s the best thing for us and for Mercado Libre, and this is what we did, by the way, in the six airplanes that we have.
