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CEO-yê JetSmart Airline-ê li ser hilweşandin û hilweşîna COVID

Zimanê xwe hilbijêrin

Estuardo Ortiz:

Well, that’s a big question I guess but… I believe you’re right, Lori. The competitive landscape will change, will be different than it was, before the pandemic. I think all carriers are looking at cash and costs and the ones restructuring through chapter 11, like the ones you mentioned. We know that taking advantage of it fully through restructure fleet. We know you’re going to be a smaller than they were before. They might be 20, 30, 40% smaller, but more efficient. We’re negotiating contracts, labor conditions, all sorts. So my assumption is that, I need to compete with lower costs, legacy carriers in the future. That said, I think the amount of debt taken globally in the industry, there’s some estimates that, well then may actually surpass revenue in 2024.

The trend continues, once it used to be 76%, it could be, about a hundred percent. And Carriage is going into a disruptor and it will have, a heavy burden in terms of the obligations and the interest expense. Leverage ratios are going to be higher. So, that restructuring doesn’t come for free. But I do believe that, that’s the case and we’ve been acting accordingly. Part of the JetSmart 2.0 project includes initiative we had before, but we just increased the intensity for it called the lowest cost in America. We want to be positioned in the region at the lowest cost separator. And we think we are, and we’ve been working reactively and several fronts, improving our field deficiencies, practices, renegotiating contracts, participating along the other Indigo Partners and several joint purchases, to reduce their costs. So, I see JetSmart coming out of the pandemic with a lower cost structure. And at the end of the day, that’s our priority. I mean, we’re not you’ll see and cost is number one.

Lori Ranson:

As being, part of that Indigo group, especially during the crisis. Has that had some unique advantages for JetSmart and the other carriers in the group?

Estuardo Ortiz:

Well, I think, know that you’ll see that model has really tested that it was the most profitable before thepandemic. It’s been through and after, and we’ve seen all the evaluations given to the carriers these days. So, we do work in several initiatives together and they bring us a scale that otherwise you would not be able to achieve. So, it’s absolutely very beneficial for us, to be part of the Indigo Partners portfolio of airlines. Our focus continues to be the same though. We need to change the model and a few things, but I’m not as concerned as well, talking about the competition, because the bigger opportunity for JetSmart at the end has been, stimulation of all of our 7 million passengers today. And the one point for a million during the pandemic. Our focus has been on stimulations for pricing and connectivity. So, I’m still looking at South America that can grow faster and bigger than it is today… To be our main, our primary source of business.

Lori Ranson:

And, just in terms of fleet, have you all decided to slow down deliveries or made any other adjustments to your fleet plan over the next year or two?

Estuardo Ortiz:

Well, we know the whole aircraft fleet supply has been clearly above demand in the past year. So, we have seen that, of course, as a factor that we watch very carefully. I do see how Orient Airways adjusting their production capacity and matching the demand. But I do think there’s some structural changes in the way we see fleet in South America. The first one is, I see fleet renewal happening. So, many of the competitors getting rid of older aircraft, particularly wide bodies. I also think that the postcode will bring a lot more focus in a narrow body aircraft in South America, rather than the wide body. And costs, will be more important. And price will be more important. So we have focused ourselves on that, making sure that our fleet continues to be competitive. And of course, the pandemic has a huge impact. So we have to adjust our delivery schedule to match demand and recovery. But we also keep very close to understand when demand will come back. They will beep and thump demand at a certain moment in time. And we’ll be ready to go forward and retake our growth once it happens.

Lori Ranson:

And I just want to turn to government and government support in the region, because obviously it’s a big and important issue. Governments probably weren’t in a place to offer a lot of financial support to airlines during the crisis, just because of some economic challenges that were present before COVID-19 began. But, what has been JetSmart’s experience dealing with governments during the pandemic, in terms of other means of support?

Estuardo Ortiz:

Lori, it’s the region, like you said, has a lot of priorities. Governments have focused theirs on the people and the small companies, not aviation. So, we haven’t received any support at all. I’m not expecting that to happen at all. What I do think, it’s important and we’ve been very active because of this, with the governments we work with, is a very comprehensive national reactivation plan, for the tourism industry. It’s 3.4% of the P or the GDP in Chile. Similar in Argentina, even more in Peru. Millions of jobs, that have been affected through the pandemic. And the first thing is to, find ways to allow people to travel. That’s important. It comes hand in hand with the vaccination program, with better testing, better tracing, better management of the pandemic, right? I think that’s the most important item in the agenda for 2021, is to make sure we reactivated the industry. We allow airlines to fly. We allow customers to fly and it’s been proven throughout the world, that flying in their book is safe. One and 27 million [inaudible 00:20:01] infected on board. So I think that’s a pretty good amount of governance.

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