Date: March 31, 2026

Company Overview
Abra Group is Latin America’s second-largest airline group, formed by consolidating Avianca (#1 in Colombia, Ecuador, Central America), GOL (#2 in Brazil), and Wamos (European ACMI). The group operates 300+ aircraft, 375 routes, serves 70M+ passengers annually with 30,000 employees, and has agreed in principle to acquire SKY (Peru/Chile).

Key 2025 Achievements

Financial Performance:
- Pro forma adjusted EBITDAR: $2.7B (26% YoY) at 27.4% margin (300 bps)
- Q4 EBITDAR margin: 30.6%
- Liquidity: $2.5B (25% of LTM revenue)
- Net debt to EBITDAR: 3.3x (down from 5.0x)
- Revenue: $9.7B (+11%)

Operational Highlights:
- GOL successfully emerged from Chapter 11 bankruptcy in June 2025
- Cumulative synergies: $180M+
- Schedule completion: 98.3% (Avianca), 99.2% (GOL)
- Loyalty program: 46M members (+34% premium customers)
- Cargo revenue: $1.6B

Fleet & Network:
- Added 7 A330-900s for international expansion
- Avianca: 13 new international routes, 160+ total routes
- GOL: Capacity growth focused on Rio and Salvador hubs
- Both airlines ranked among world’s best for on-time performance

Individual Carrier Performance

Avianca:
- EBITDAR: $1.5B (21%) at 26.5% margin
- Liquidity: $1.4B (24% of revenue)
- Net leverage: 2.7x (down from 3.3x)
- Refinanced $1.75B debt, extending maturities to 2030-2031
- Completed Business Class rollout across network
- Lifemiles: 16M members (14%)

GOL:
- EBITDAR: $1.2B (32%) at 30% margin
- Liquidity: $1B (25% of revenue)
- Net leverage: 3.0x
- #1 in Brazil for on-time performance (2nd consecutive year)
- GOLLOG: 9 cargo aircraft, strong e-commerce demand
- Launched Rio-JFK service

Fuel Crisis Response (Primary Focus)

Current Situation:
- Spot jet fuel: <sub>$4/gallon
- Brazil (Petrobras): BRL 6.85/liter (</sub>$4.90/gallon for April, +55% vs March)
- Impact: $70M monthly cost per $1 fuel price increase
- Required fare increase: ~10% per $1 fuel increase

Hedging Strategy:
- 50% of fuel hedged March-May at $2.45/gallon (zero-cost collar)
- Additional 14% hedged through August at higher strike prices
- Hedges placed just before war started

Pricing Response:
- Brazil (GOL): Fares up ~30% (near full pass-through)
- Avianca: Fares up ~10% (targeting mid-20s increase)
- Challenges: European carriers largely hedged; US carriers slower to raise prices

Demand Outlook:
- Near-term bookings holding strong (especially business travel)
- Long-term bookings (summer season) showing weakness
- Considering “low single-digit” tactical capacity cuts in Brazil
- No wholesale capacity reductions planned yet
- Monitoring elasticity closely; 30% fare increase equals 2019 real pricing

Management Assessment: Cautiously optimistic about summer demand; greater concern about potential economic slowdown (income elasticity) than price elasticity. Effective fuel pass-through combined with hedges positions company well for 2026, though geopolitical uncertainty remains.