So, we are discussing right now with the lessors those options to make sure that we can start receiving those planes by second quarter next year. We will go one-by-one. I am sure it’s going be more than six, but it’s still early to say, how many out of the 12 that we have. And on the second questions that you raised, the gain was related to sales backs that we did the only agents and also in one of the MAX that we received. So, we used to have finance, leases on some engines that we turn into operating leases, during the quarter.
Operator: Our next question comes from Jay Singh from Citi. Please Mr. Jay your microphone is open.
Jay Singh: You guys have already answered one of my questions, but the other one I wanted to ask is what sort of flow are you seeing from American Airlines?
Mario Liao: Good morning, Jay. We are I mean constantly reviewing how can we improve the partnership with Americans that has been very strong since we signed that deal. And we are happy that American has now increased the capacity speak to Brazil. So especially we have been feeding them a lot from Guarulhos, which is the main gateway. But we didn’t have a great network so far in Rio International. And from this winter season and on, we are going to provide, let’s say a sizable beyond points from Rio International. And I’m sure that we will be contributing a lot to the American airline flights in Brazil. And they will probably stay with their flights for in the future. They have seasonal flights and for now, and I’m sure they will be seeing a lot of traffic going from GOL.
We have with then the highest contribution that we already have with a partner in this corridor, which is more than 35% connectivity in most of their flights. So, it’s pretty strong. It’s pretty strong. Also, on the frequent flyer in both frequent flyers, our customers are now really understanding the partnership and flying with us, flying with them advantages miles. And so, we foresee that the flows will continue to increase during next year.
Jay Singh: That’s super helpful. Thanks so much.
Mario Liao: Okay. Just before the operator going back to the other self-analyst that wanted to have a question, we received some questions on the webcast platform. So I will be handling some of those questions. So first one was coming from Matt from one of our investors. Can you discuss the youth environment and the competitive landscape? So I would refer to Celso to respond that one.
Celso Ferrer: Yes. Thank you, Mario. And I think all the industry now has some sort of hurdle in to grow capacity. And no matter the fleet in our case, we mentioned a lot of the constraints we have right now. And we are facing a very rational environment in terms of yielding — yield and how the industry is behaving. We expect the yields to stay at this level we don’t, of course, it’s not our goal to increase fares. We want to grow again, bring back planes back to the operation, be more productive with the fleet and give people better access to better fares. That’s what we want. But we see that especially in the next quarters, a very stable environment in the yields and a very rational industry, and potentially for the first time in many, many years in Brazil, and not only in Brazil, but also in the region. As we are expanding international, we are also seeing health yield on the regional international flights that we do.
Mario Liao: Yes. And there’s also another question from the webcast platform on. Can you give us some details about the fuel cost hedge and what is the percentage of expected yields that is hedged? So, we generally as a more concentration of hedge during the short term, so we have for the next two quarters per 4Q and 1Q something around 30% to 40% hedge ratio. That of course, hedge activities right now has been something especially here for the Brazil Airlines that is more costly. So, we have been focusing much more in terms of the cash users to the CapEx and to return the essential investments. And we have been trying to select most costless instruments that can create some protection for the Company, especially in this kind of a very volatile environment, where we envision definitely for the four quarter.
And that’s one of the reasons why we kept the guidance for jet fuel per liter and change even though we have some benefit during the second and the third quarter. But we started to see the prices on jet fuel for the four quarter, so beginning of four quarter and now October to stay higher than what is the level they produce. So ultimately that most of the benefits on the first let’s say six months pr prior to this quarter is going to be somehow compensated offset by more upside risk on the oil price going forward. But we have this strong yield environment, very disciplined in terms of the competitors that somehow create a lower pressure to being so much hatched. But we are much more concentrated in the next six months. And that there’s also one question that came from Deutsche as our sell-side, he’s putting here in the webcast and also getting back to sales as well.
With exclusivity with Air France-KLM, what does that mean for historical frequent flyer problem tied with TAP airport to go does that no longer exists?
Celso Ferrer: Thank you for your question. And as I said, no changes in the TAP agreements Portugal that we have today, we — TAP is a great partner. They are, I mean, very big in Brazil, flying to many gateways. And we are going to continue our partnership, our co-share and also the frequent flyer with them.
Operator: Our next question comes from Gabriel Rezende from Itau BBA. Please Mr. Gabriel your microphone is open.
Gabriel Rezende: I have just a quick follow-up regarding the delay to receive the aircraft from Boeing. So,, it is clear that you mentioned that you have some grounded aircraft that are generating lease expenses not tied to revenue generation and that is waiting on your cash flow. And you mentioned that this should also wait on the gas figures looking forward. I’d just like, I would just like to, confirm that we should see maybe a spike on maintenance expenses in the coming quarters because of these effect. I mean, you’re going to have to return these aircraft, do some maintenance, some work on them to return them following your checklist and that we should see these higher maintenance expenses. Is that going to be one of the negative effects you’re going to have because of this idle capacity?
Celso Ferrer: As you can see, even in this quarter, which is a very robust result that we are delivering, but it has already the impact of four lease returns on the cost side and that will probably continue. As we grow, we are looking to every airplane sit down with the lessor and say, “Look, can we come bring this plane back to the operation? Can we extend that lease? Can we invest in the right CapEx, invest on the engines and stay flying this engine or let’s return” So, we are doing this and the other moving piece is the delivers and that we have very low visibility so far. That’s why it’s something that we are managing in the like two month timeframe rolling basis. So, we go and say, those are the candidates to bring those planes back to fly.
We sit down with the lessor, try to have a negotiation to return or to make sure we can fly those airplanes or we can take a MAX and return those planes. The level of maintenance will continue to be impacting the cost as we saw this quarter. I don’t think it’s going to be much bigger than what it was in the quarter. But also there is the challenge on the CapEx side, if we decide to return more planes, the then to fulfill the gap on the delivers, and that’s what Mario answered before. We are budgeting 2024 to make sure that we have enough room to address those engines sit down with lessors with MROs to have more ability to finance those CapEx. That’s what we are doing right now. And working with new engine facilities, especially with the Brazilian government to make sure we can address a higher CapEx than we usually face.
