Bond Gol Linhas Aereas Intelligentes 8.75% ( USG3980PAA33 ) in USD

Gol Linhas Aereas Intelligentes

10.5 % ▼

Brazil

USG3980PAA33 ( in USD )

8.75% per year ( payment 4 times a year)

Perpetual

Prospectus brochure of the bond Gol Linhas Aereas Intelligentes USG3980PAA33 en USD 8.75%, maturity Perpetual

100 000 USD

200 000 000 USD

G3980PAA3

N/A

05/07/2025 ( In 80 days )

GOL Linhas Aéreas Inteligentes is a Brazilian low-cost airline headquartered in São Paulo, offering domestic and international flights throughout South America.

The Bond issued by Gol Linhas Aereas Intelligentes ( Brazil ) , in USD, with the ISIN code USG3980PAA33, pays a coupon of 8.75% per year.
The coupons are paid 4 times per year and the Bond maturity is Perpetual

OFFERING MEMORANDUM
U.S.$200,000,000
Gol Finance
(an exempted company incorporated with limited liability in the Cayman Islands)

8.75% PERPETUAL NOTES
Unconditionally Guaranteed By Gol Linhas Aéreas Inteligentes S.A. and Gol Transportes Aéreos S.A.

Interest payable on January 5, April 5, July 5 and October 5

Gol Finance, or the Issuer, is offering U.S.$200,000,000 aggregate principal amount of 8.75% guaranteed perpetual notes.
Interest on the notes will accrue from April 5, 2006 at a rate of 8.75% per year and will be payable quarterly in arrears on
January 5, April 5, July 5 and October 5 of each year, commencing on July 5, 2006.
The notes will be perpetual notes with no fixed final maturity date and will be repaid only in the event that the Issuer redeems
the notes or upon acceleration due to an event of default. The notes may, at the Issuer's option, be redeemed, in whole or in
part, at 100% of their principal amount plus accrued and unpaid interest and additional amounts, if any, on any interest
payment date on or after April 5, 2011, provided that if the notes are redeemed in part, at least U.S.$150 million aggregate
principal amount of the notes must remain outstanding following any partial redemption. The notes may also be redeemed by
the Issuer, in whole but not in part, at any time upon the occurrence of specified events relating to the applicable tax law, as
described under "Description of the Notes--Redemption--Tax Redemption."
__________________
The notes will be unsecured and will rank equally with the other unsecured unsubordinated indebtedness the Issuer may
incur. Gol Linhas Aéreas Inteligentes S.A. and Gol Transportes Aéreos S.A., to which we refer to together as the Guarantors,
will unconditionally guarantee, jointly and severally, on an unsecured basis, all of the Issuer's obligations pursuant to the
notes. The guarantees will rank equally in right of payment with the other unsecured unsubordinated indebtedness and
guarantees of the Guarantors. The notes will be effectively junior to the Issuer's and the Guarantors' secured indebtedness.
For a more detailed description of the notes, see "Description of Notes" beginning on page 22.
__________________
Application has been made to list the notes on the Official List of the Luxembourg Stock Exchange and admission to trading
has been made on the Euro MTF market of the Luxembourg Stock Exchange. See "Listing and General Information."
Notes that are sold to qualified institutional buyers are expected to be designated as being eligible for trading in the Private
Offerings, Resales and Trading through Automatic Linkages (PORTAL) market.
__________________
Investing in the notes involves risks. See "Risk Factors" beginning on page 18.
__________________
PRICE 100% AND ACCRUED INTEREST, IF ANY
__________________
The notes (and the guarantees) have not been registered under the U.S. Securities Act of 1933, as amended, or the Securities
Act, and are being offered only to (1) qualified institutional buyers under Rule 144A and (2) non-U.S. persons outside the
United States in compliance with Regulation S. For more information about restrictions on transfer of the notes, see
"Transfer Restrictions" beginning on page 52. To the extent that the offering of the notes is made to persons within the
European Economic Area, it shall exclusively be made to "qualified investors" within the meaning of EU Directive
2003/71/EC, or the Prospectus Directive, and shall therefore be exempt from the requirement to publish a compliant
prospectus under the Prospectus Directive.
Morgan Stanley & Co. Incorporated expects to deliver the notes to purchasers in book-entry form through The Depository
Trust Company, or DTC, and its direct and indirect participants, including Clearstream Banking, S.A. Luxembourg, or
Clearstream, and Euroclear Bank S.A./N.V., as operator of the Euroclear System, or Euroclear, on or about April 5, 2006.
__________________
Joint Bookrunners and Joint Lead Managers
MORGAN STANLEY

JPMORGAN
July 20, 2006

TABLE OF CONTENTS
Page
Where You Can Find More Information.......................iv
Transfer Restrictions.............................................52
Forward-Looking Statements........................................v
Enforcement of Civil Liabilities................................... 54
Summary.......................................................................1
Validity of the Notes .................................................... 56
Risk Factors ..................................................................19
Independent Auditors ................................................... 56
Use of Proceeds ............................................................21
Listing and General Information .................................. 57
Capitalization................................................................22
Annex A--Annual Report on Form 20-F for the Year
Description of Notes .....................................................23
Ended December 31, 2005 ........................................... A-1
Form of Notes...............................................................38
Annex B--Audited Financial Statements of Gol........B-1
Taxation........................................................................41

Plan of Distribution.......................................................47

In this offering memorandum, we use the terms "GLAI" to refer to "Gol Linhas Aéreas Inteligentes S.A.,"
"Gol" to refer to Gol Transportes Aéreos S.A., "Issuer" to refer to Gol Finance and the "Gol Group," "we," "us" and
"our" to refer to GLAI and its consolidated subsidiaries, including "Gol" and the "Issuer," except where the context
requires otherwise. All references to "Guarantors" refer to GLAI and Gol, collectively.
You should rely only on the information contained in this offering memorandum. We have not authorized
anyone to provide you with different information. Neither we nor the initial purchasers are making an offer of the
notes in any jurisdiction where the offer is not permitted.
We, having made all reasonable inquiries, confirm that the information contained in this
offering memorandum with regards to us is true and accurate in all material respects, that the opinions and
intentions we express in this offering memorandum are honestly held, and that there are no other facts the omission
of which would make this offering memorandum as a whole or any of such information or the expression of any
such opinions or intentions misleading in any material respect. We accept responsibility accordingly.

This offering memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, any
notes offered hereby by any person in any jurisdiction in which it is unlawful for such person to make an
offer or solicitation. Neither the delivery of this offering memorandum nor any sale made hereunder shall
under any circumstances imply that there has been no change in our affairs or that the information set forth
in this offering memorandum is correct as of any date subsequent to the date of this offering memorandum.

This offering memorandum has been prepared by us solely for use in connection with the proposed offering
of the notes. We reserve the right to reject any offer to purchase, in whole or in part, for any reason, or to sell less
than all of the notes offered by this offering memorandum. Morgan Stanley & Co. Incorporated and J.P. Morgan
Securities Inc. will act as initial purchasers with respect to the offering of the notes. This offering memorandum is
personal to you and does not constitute an offer to any other person or to the public in general to subscribe for or
otherwise acquire the notes. Distribution of this offering memorandum by you to any person other than those
persons retained to advise you is unauthorized, and any disclosure of any of the contents of this offering
memorandum without our prior written consent is prohibited. By accepting delivery of this offering memorandum,
you agree to the foregoing and to make no photocopies of this offering memorandum, and, if you do not purchase
the notes or the offering is terminated for any reason, to return this offering memorandum to Morgan Stanley & Co.
Incorporated, 1585 Broadway, New York, NY 10036, Attention to Global Capital Markets or J.P. Morgan Securities
Inc., 270 Park Avenue, New York, NY 10017, Attention to EM Debt Capital Markets.
You must (1) comply with all applicable laws and regulations in force in any jurisdiction in connection
with the possession or distribution of this offering memorandum and the purchase, offer or sale of the notes, and (2)
obtain any required consent, approval or permission for the purchase, offer or sale by you of the notes under the
laws and regulations applicable to you in force in any jurisdiction to which you are subject or in which you make

i

such purchases, offers or sales, and neither we nor the initial purchasers or their agents have any responsibility
therefor. See "Transfer Restrictions" for information concerning some of the transfer restrictions applicable to the
notes.
You acknowledge that:
· you have been afforded an opportunity to request from us, and to review, all additional information
considered by you to be necessary to verify the accuracy of, or to supplement, the information
contained in this offering memorandum;
· you have not relied on the initial purchasers or their agents or any person affiliated with the initial
purchasers or their agents in connection with your investigation of the accuracy of such information or
your investment decision; and
· no person has been authorized to give any information or to make any representation concerning us or
the notes other than those as set forth in this offering memorandum. If given or made, any such other
information or representation should not be relied upon as having been authorized by us, the initial
purchasers or their agents.
In making an investment decision, you must rely on your own examination of our business and the
terms of this offering, including the merits and risks involved. The notes have not been recommended by any
federal or state securities commission or regulatory authority. Furthermore, these authorities have not
confirmed the accuracy or determined the adequacy of this offering memorandum. Any representation to the
contrary is a criminal offense.
This offering memorandum may only be used for the purpose for which it has been published.
Neither the initial purchasers nor their agents are making any representation or warranty as to the accuracy
or completeness of the information contained in this offering memorandum, and nothing contained in this
offering memorandum is, or shall be relied upon as, a promise or representation, whether as to the past or the
future. Neither the initial purchasers nor their agents have independently verified any of such information
and assume no responsibility for the accuracy or completeness of the information contained in this offering
memorandum.
We and the initial purchasers reserve the right to reject any offer to purchase, in whole or in part, and for
any reason, the notes offered hereby. We and the initial purchasers also reserve the right to sell or place less than all
of the notes offered hereby.
Neither the U.S. Securities and Exchange Commission, or SEC, nor any state securities commission has
approved or disapproved the offering of these securities or determined if this offering memorandum is truthful or
complete. Any representation to the contrary is a criminal offense.

See "Risk Factors" beginning on page 18 of this offering memorandum as well as the risk factors set forth
in our Annual Report on Form 20-F for the year ended December 31, 2005 (which is included as Annex A to this
offering memorandum and forms an integral part thereof) for a description of certain factors relating to an
investment in the notes, including information about our business. None of us, the initial purchasers nor any of our
or their representatives is making any representation to you regarding the legality of an investment by you under
applicable legal investment or similar laws. You should consult with your own advisors as to legal, tax, business,
financial and related aspects of a purchase of the notes.

ii

NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT, OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B WITH THE STATE OF NEW HAMPSHIRE
NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED
IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE
OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE
AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR
EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE
SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF,
OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT
IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER,
CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF
THIS PARAGRAPH.

WE HEREBY INFORM YOU THAT THE DESCRIPTION SET FORTH HEREIN WITH
RESPECT TO U.S. FEDERAL TAX ISSUES WAS NOT INTENDED OR WRITTEN TO BE USED, AND
SUCH DESCRIPTION CANNOT BE USED, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING
ANY PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER UNDER THE U.S. INTERNAL
REVENUE CODE. SUCH DESCRIPTION WAS WRITTEN TO SUPPORT THE MARKETING OF THE
NOTES. THIS DESCRIPTION IS LIMITED TO THE U.S. FEDERAL TAX ISSUES DESCRIBED
HEREIN. IT IS POSSIBLE THAT ADDITIONAL ISSUES MAY EXIST THAT COULD AFFECT THE
U.S. FEDERAL TAX TREATMENT OF THE NOTES, OR THE MATTER THAT IS THE SUBJECT OF
THE DESCRIPTION NOTED HEREIN, AND THIS DESCRIPTION DOES NOT CONSIDER OR
PROVIDE ANY CONCLUSIONS WITH RESPECT TO ANY SUCH ADDITIONAL ISSUES.

TAXPAYERS SHOULD SEEK ADVICE BASED ON THE TAXPAYER'S PARTICULAR
CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

The notes will be available initially only in book-entry form. We expect that the notes will be issued in the
form of one or more registered global notes. The global notes will be deposited with, or on behalf of, DTC, and
registered in its name or in the name of Cede & Co., its nominee. Beneficial interests in the global notes will be
shown on, and transfers of beneficial interests in the global notes will be effected through, records maintained by
DTC and its participants. We expect the Regulation S global notes, if any, to be deposited with the trustee as
custodian for DTC, and beneficial interests in them may be held through the Euroclear, Clearstream or other
participants. After the initial issuance of the global notes, certificated notes may be issued in registered form, which
shall be in minimum denominations of U.S.$100,000 and integral multiples of U.S.$1,000.

iii

WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company under Section 13 or Section 15(d) of the U.S. Securities Exchange Act of
1934, as amended, or the Exchange Act, and file periodic reports with the SEC. However, if at any time we cease to
be a reporting company under Section 13 or Section 15(d) of the Exchange Act, or are not exempt from reporting
pursuant to Rule 12g3-2(b) under the Exchange Act, we will be required to furnish to any holder of a note which is a
"restricted security" (within the meaning of Rule 144 under the Securities Act), or to any prospective purchaser
thereof designated by such a holder, upon the request of such holder or prospective purchaser, in connection with a
transfer or proposed transfer of any such note pursuant to Rule 144A under the Securities Act or otherwise, the
information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
We are subject to the informational requirements of the Exchange Act and, in accordance therewith, file
reports and other information with the SEC. As a foreign private issuer, we are exempt from the Exchange Act rules
regarding the provision and control of proxy statement and regarding short-swing profit reporting and liability. Such
reports and other information can be inspected and copied at the public references facilities of the SEC at Room
1580, 100 F Street N.E., Washington, D.C. 20549. Copies of such material can also be obtained at prescribed rates
by writing to the Public Reference Section of the SEC at 100 F Street N.E., Washington, D.C. 20549. We file
materials with, and furnish material to, the SEC electronically using the EDGAR System. The SEC maintains an
Internet site that contains these materials at www.sec.gov. In addition, such reports, proxy statements and other
information concerning us can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, on which our equity securities are listed.
As a foreign private issuer, we are not subject to the same disclosure requirements as a domestic U.S.
registrant under the Exchange Act. For example, we are not required to prepare and issue quarterly reports.
However, we furnish our shareholders with annual reports containing financial statements audited by our
independent auditors and make available to our shareholders quarterly reports containing unaudited financial data
for the first three quarters of each fiscal year. We file quarterly financial statements with the SEC within two
months of the end of the first three quarters of our fiscal year, and we file annual reports on Form 20-F within the
time period required by the SEC, which is currently six months from December 31, the end of our fiscal year.
Our annual report on Form 20-F for the year ended December 31, 2005, filed with the SEC on March 20,
2006 is incorporated by reference herein and is included in Annex A to this offering memorandum. We will
incorporate by reference in this offering memorandum all subsequent annual reports filed with the SEC on Form
20-F under the Securities Exchange Act of 1934 and those of our reports submitted to the SEC on Form 6-K that we
specifically identify in such form as being incorporated by reference after the date of this offering memorandum
until this offering has been terminated. We also incorporate our report submitted to the SEC on Form 6-K on April
25, 2006 (U.S.GAAP financial statements) into this offering memorandum. This report including the U.S. GAAP
financial statements for the first quarter of 2006 is available free of charge at the office of the Luxembourg paying
agent.
You may request a copy of our SEC filings, at no cost, by contacting us at the number or address specified
below.
Investor Relations Department
Tel.: 55 11 5033-4393
www.voegol.com.br
Rua Tamoios 246, Jardim Aeroporto,
04630-000 São Paulo, SP, Brazil
Information contained on our website is not incorporated by reference in, and shall not be considered a part
of, this offering memorandum.

iv

FORWARD-LOOKING STATEMENTS
This offering memorandum includes forward-looking statements, principally under the captions
"Summary," "Summary Financial and Other Information," "Risk Factors," and "Capitalization." We have based
these forward-looking statements largely on our current beliefs, expectations and projections about future events and
financial trends affecting our business. Many important factors, in addition to those discussed elsewhere in this
offering memorandum, could cause our actual results to differ substantially from those anticipated in our forward-
looking statements, including, among other things:
· general economic, political and business conditions in Brazil and in other South American markets we
serve;
· management's expectations and estimates concerning our future financial performance and financing
plans and programs;
· our limited operating history;
· our level of fixed obligations;
· our capital expenditure plans;
· inflation and fluctuations in the exchange rate of the real;
· existing and future governmental regulations, including air traffic capacity controls;
· increases in fuel costs, maintenance costs and insurance premiums;
· changes in market prices, customer demand and preferences and competitive conditions;
· cyclical and seasonal fluctuations in our operating results;
· defects or mechanical problems with our aircraft;
· our ability to successfully implement our growth strategy; and
· the risk factors discussed under "Risk Factors."
The words "believe," "may," "will," "aim," "estimate," "continue," "anticipate," "intend," "expect" and
similar words are intended to identify forward-looking statements. Forward-looking statements include information
concerning our possible or assumed future results of operations, business strategies, financing plans, competitive
position, industry environment, potential growth opportunities, the effects of future regulation and the effects of
competition. Forward-looking statements speak only as of the date they were made, and we undertake no obligation
to update publicly or to revise any forward-looking statements after we distribute this offering memorandum
because of new information, future events or other factors. In light of the risks and uncertainties described above,
the forward-looking events and circumstances discussed in this offering memorandum might not occur and are not
guarantees of future performance.
We undertake no obligation to publicly update any forward-looking statement, whether as a result of new
information, future events or otherwise.

v

SUMMARY
This summary highlights information presented in greater detail elsewhere in this offering memorandum.
This summary is not complete and does not contain all the information you should consider before investing in the
notes. You should carefully read this entire offering memorandum before investing, including "Risk Factors" and
our Annual Report on Form 20-F for the year ended December 31, 2005, which is attached as Annex A to this
offering memorandum and which includes our consolidated financial statements and related notes. See
"Presentation of Financial and Other Information" in our Annual Report on Form 20-F for the year ended
December 31, 2005 for information regarding our consolidated financial statements, exchange rates, definitions of
technical terms and other introductory matters.
Our Business
Overview
We are one of the most profitable low-cost airlines in the world and had net revenues of R$2.7 billion and
net income of R$513.2 million for the year ended December 31, 2005. We are the only low-fare, low-cost airline
operating in Brazil providing frequent service on routes connecting all of Brazil's major cities. We focus on
increasing the growth and profits of our business by popularizing air travel and stimulating and meeting demand for
safe, affordable, convenient air travel in Brazil and between Brazil and other South American destinations for both
business and leisure passengers. We do this by offering simple, safe and efficient service while having one of the
lowest operating costs in the airline industry worldwide. Our long-term business objective is to become the largest
Brazilian airline and to bring affordable air travel to all significant destinations in South America.
We have flown over 36 million passengers since beginning operations in 2001 and, according to the DAC,
Brazil's civil aviation authority, our share of the domestic market, based on revenue passenger kilometers, grew
from 4.7% in 2001 to 11.8% in 2002, 19.4% in 2003, 22.3% in 2004 and 27.3% in 2005. Our strategy involves not
only capturing market share, but increasing the size of the market by attracting new passengers through our low
fares and through a variety of payment mechanisms designed to make the purchase of our tickets easier for
customers belonging to a much broader income class.
We began our operations in January 2001 with six single-class Boeing 737-700 Next Generation aircraft
serving five cities in Brazil. As of the end of 2005, we operated 42 single-class Boeing 737 aircraft. Currently, we
provide frequent service on routes between all of Brazil's major cities and to international destinations in Argentina,
Bolivia, Paraguay and Uruguay. We placed firm purchase orders with The Boeing Company for 67 737-800 Next
Generation aircraft and we have options to purchase an additional 34 737-800 Next Generation aircraft. Currently,
we have 11 firm purchase orders for aircraft deliveries scheduled in 2006, 13 in 2007, 10 in 2008, 11 in 2009, 8 in
2010 and 14 after 2010. In 2005, we took delivery, under two- and three-year operating leases, of seven Boeing
737-300 aircraft, which we are using to help meet our short-term capacity needs while we await the delivery of the
new 737-800 Next Generation aircraft.
Our strategy is to offer travelers in Brazil and other South American countries a low-fare transportation
alternative that we believe is cost-competitive compared to conventional airline and bus transportation. We have a
diversified revenue base, with customers ranging from business passengers traveling between densely populated
cities in Brazil, such as São Paulo, Rio de Janeiro and Belo Horizonte, to leisure passengers traveling to destinations
throughout Brazil and to our international destinations in Argentina, Bolivia, Paraguay and Uruguay. We carefully
evaluate opportunities to continue the growth of our business through increasing the frequency of flights to our
existing high-demand markets and adding new routes to overpriced routes in Brazil and to other South American
destinations. In 2005, we inaugurated nine new destinations, increasing the number of destinations served to 45 (43
in Brazil, one in Argentina and one in Bolivia). In January 2006 we commenced scheduled services to Asunción,
Paraguay, and Montevideo, Uruguay and two additional destinations in Argentina: Rosario and Cordoba. We
intend to further expand our service to international destinations in South America.
1

Our affordable, reliable and simple service and our focus on markets that were either underserved or did
not have a lower-fare alternative has led to a strong awareness of our brand and a rapid increase in our market share.
We offer a simplified product to our customers with single-class seating and a light snack and beverage service.
Generally, our low operating costs allow us to set our fares at levels significantly lower than the average fares of our
primary competitors. This approach has helped us win customer loyalty and in certain markets to stimulate demand
by attracting new customers who previously used other means of travel or traveled less often due to price sensitivity.
We have kept our operating costs low principally by maintaining a simplified aircraft fleet that is one of the newest
in South America, which reduces maintenance and fuel costs.
We deploy aircraft in a highly efficient manner to maintain industry leading aircraft utilization, and
concentrate heavily upon internet-based distribution channels and sales. The strong promotion of internet-based
distribution channels and sales is an integral element of our low cost structure and efficiency and has made us one of
the largest and leading e-commerce businesses in Brazil with total sales of passenger tickets of R$2.6 billion over
the internet in 2005. We believe we effectively employ technology to make our operations more efficient, using real
time sales and operating information, internet based sales and ticketless travel, advanced yield management systems
and intelligent outsourcing.
We have developed an innovative company culture that is supported by a highly motivated and streamlined
workforce. Members of our senior management team have an average of approximately 20 years of experience in
the domestic and international passenger transportation industries, and we have been able to draw upon this
extensive experience to develop and strengthen our low-cost operating structure.
Our emphasis on controlling costs and yield management has given us flexibility in setting our fares to
achieve a balance between our load factors and yields that we believe will generate the highest profitability for us.
During 2005, when the airline industry globally was suffering from historically high fuel prices, we generated net
income of R$513.2 million. Our profitable results in 2005 were due largely to the economies of scale from the
growth of our business and having a cost per available seat kilometer that was approximately 22% lower than that of
our closest competitor in the domestic market, based upon our analysis of publicly available data. By acquiring 53
Boeing 737-800 Next Generation with increased seat capacity through 2010, we believe that we will be able to more
efficiently use the airport slots available to us and to further reduce our costs per seat kilometer.
Our operating model is a highly integrated, multiple-stop route network that is a variation on the point-to-
point model used by other successful low-cost carriers worldwide. The high level of integration of flights at selected
airports permits us to offer frequent, non-stop flights at low fares between Brazil's most important economic centers
and ample interconnections through our network linking city pairs through a combination of two or more flights
with little connecting or stop-over time. Our network also allows us to increase our load factors on our strongest
city pair routes by using the airports in those cities to connect our customers to their final destinations. This strategy
increases our load factor by attracting customers traveling to secondary markets who prefer to pay lower fares even
if this means making one or more stops before reaching their final destination. Finally, our operating model allows
us to build our flight routes to add destinations to cities that would not, individually, be feasible to serve in the
traditional point-to-point model, but that are feasible to serve when simply added as additional points on our
multiple-stop flight network. We do this by offering low-fare early-bird or night flights to lower-traffic destinations,
which are usually the first or last stops on our routes, allowing us to increase our aircraft utilization and generate
additional revenues.
We believe that our operating model, when combined with our low fares and reliable service, stimulates
demand for air travel, and helped us to achieve a load factor of 73.7% for domestic flights in 2005, which is higher
than those of our two largest Brazilian competitors in the same period, according to the DAC. The interconnectivity
of our network also resulted in approximately one-half of our passengers making connections or stops while
traveling to their final destination. In December 2005, we maintained high standards of operating efficiency and
customer satisfaction, completing 98% of our scheduled flights, with on-time performance of 97%, based on our
internal data.
In December 2005, we entered into a joint venture to create a low-cost Mexican airline. We will hold 25%
of the voting capital stock and approximately 48% of the total capital stock of the Mexican airline company, with
the remaining capital being subscribed by Mexican investors. Under a service agreement, we will implement and
2

develop the operational structure of the company and render consulting services for all operational matters to the
new Mexican company in return for a performance-based service fee.
During 2005, we further improved our internal control over financial reporting in accordance with Section
404 of the U.S. Sarbanes Oxley Act of 2002, one year before this requirement becomes applicable to us as a non-
U.S. company. We are one of the first Latin American companies to give the relevant officer certifications
regarding these controls and procedures. We expect various benefits from the implementation of these controls and
procedures, such as improved risk management and better operational and financial controls.
We are controlled by Brazil's Áurea group. The Áurea group has more than five decades of successful
operating experience in Brazil's bus transportation industry, and brings the benefits of this expertise in the Brazilian
transportation industry to our strategy and operations.
Our Competitive Strengths
Our principal competitive strengths are:
We Keep Our Operating Costs Low. Our cost per available seat kilometer for the year ended December
31, 2005 was R$15.5 cents, or approximately U.S.$6.6 cents. We believe that our cost per available seat kilometer
for the year ended December 31, 2005, adjusted for the average number of kilometers flown per flight, was one of
the lowest in the airline industry worldwide, and was on average approximately 22% lower than that of our closest
competitor in the domestic market, based upon our analysis of data collected from publicly available information.
Typically, airline operating costs per kilometer decrease as flight length increases. Our low operating costs are the
result of being innovative and using best practices adopted from other leading low-cost carriers to improve our
operating efficiency, including:
Efficient use of aircraft. During 2005, our aircraft utilization totaled an average of 13.9 block hours per
day, the highest aircraft utilization rate in the Brazilian domestic airline industry, according to the DAC,
and among the highest worldwide according to airline company public filings. We achieve high aircraft
utilization rates by operating a new fleet that requires less maintenance down time, accomplishing a fast
turnaround on our aircraft between flights and operating more flights per day per aircraft than our
competitors. The fast turnaround time for our aircraft between flights, which averages just 25 minutes,
minimizes connection times for our passengers and enables our aircraft to fly approximately 11 flight legs a
day, as compared to approximately eight flight legs a day by our closest competitor in the domestic market.
We increase the speed of preparing our aircraft for the next flight by loading and unloading passengers
through front and rear aircraft doors when possible, minimizing catering requirements and having cabin
crew assist with cleaning the aircraft. Our efficient use of our fleet has helped us to generate revenue at
times when the aircraft of our competitors are still on the ground and has allowed us to spread our fixed
costs over a greater number of flights and available seat kilometers. As part of our aircraft utilization
strategy, we introduced night flights on certain routes in December 2003 at very low fares to increase
utilization, generate higher load factors and stimulate demand. Our night flights, which generated a load
factor higher than that of our other flights, have helped us to make a portion of our fleet productive
practically 24 hours per day. We also offer air cargo services on our flights to generate incremental
revenue from space in the stronghold sections of our aircraft that would otherwise remain unutilized. With
our firm purchase orders and purchase options of 101 additional Boeing 737-800 Next Generation aircraft,
we expect to be able to maintain our young fleet of aircraft, and therefore increase efficiency and reduce
maintenance costs.
Operation of a simplified fleet. Currently, we operate a simplified fleet type consisting of 45 Boeing 737
aircraft. Having a fleet with minimal aircraft types reduces inventory costs, as fewer spare parts are
required, and reduces the need to train our pilots to operate different types of aircraft. In addition, keeping
the number of types of aircraft we operate to a minimum simplifies our maintenance and operations
processes. While our focus on having the lowest operating costs means that we will periodically review
our fleet composition to ensure that it is achieving our low-cost goals, any decision we may make to
introduce a new fleet type will be made only after carefully weighing the performance and profitability
benefits of doing so against the emphasis we place on maintaining simplified operations.
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Use of efficient, low-cost distribution channels. Our effective use of technology helps us to keep our costs
low and our operations highly scaleable and efficient. We seek to keep our distribution channels
streamlined and convenient so as to allow our customers to interact with us directly via the internet.
Approximately 81% of our ticket sales are through our website, and our customers can check-in for their
flights online and by web-enabled cell phones. As a result of our emphasis on low-cost distribution
channels, we generate more revenues from online ticket sales than any other airline company in Brazil. We
enjoy significant cost savings associated with automated ticket sales, all while making the selection of
travel options more convenient for our customers. We estimate that our distribution costs using our online
ticket sales system is approximately 65% lower than our distribution costs involving more traditional
means, such as the Global Distribution System, or GDS. In addition, like other low-cost carriers, but unlike
our main competitors, all travel on our flights is ticketless. The elimination of paper tickets saves paper
costs, postage, employee time and back-office processing expenses. Also, we do not need to maintain
physical ticket sales locations outside of airports.
Flexible and efficient operating approach. We always seek the most cost-effective way of providing our
services to our customers without compromising quality and safety. We constantly evaluate our operations
to see if sensible cost-savings opportunities exist. As a result, we outsource the work that can be done
properly and more efficiently by third parties and we internalize the functions that our employees can do
more cost-efficiently. We have arrangements on competitive terms with third-party contractors at certain
airports for aircraft and baggage handling, and call center customer services. We get competitive rates for
these services by negotiating multi-year contracts at prices that are fixed or subject only to periodic
increases linked to inflation. With our phased maintenance system, we are able to perform maintenance
work every day without sacrificing aircraft revenue time and to schedule preventive maintenance with more
regularity and around the utilization of our aircraft, which helps to maintain high levels of block hours per
day and reduce costs. We are among the very few airlines in the world having maintenance technicians
capable of executing our phased maintenance system. Furthermore, we are in the final phase of building a
state-of-the-art aircraft maintenance center at the airport of Confins in the State of Minas Gerais. Although
not complete, the maintenance center is already operational, enabling us to internalize aircraft heavy
maintenance work to reduce maintenance costs. We plan to internalize other services that are currently
outsourced if we believe we can better control the quality and efficiency of these services.
We Stimulate Demand for Our Services. We believe that through our low fares and high-quality service,
we provide the best value in our markets and create demand for air travel services. Our average fares are lower than
the average fares of our primary competitors. We identify and stimulate a demand among both business and leisure
passengers for air travel that is safe, convenient, simple and is a reasonably priced alternative to traditional air, bus
and car travel. By combining low fares with simple and reliable service that treats passengers equally in a single-
class environment, we have successfully increased our market share, strengthened customer loyalty and are
attracting a new group of air travelers in our markets. These new travelers did not previously consider air travel due
to the higher prices and more complicated sales procedures that preceded our entry into the market. For example,
our night flights, for which we offer highly competitive fares, have proven to be very successful, generating load
factors higher than that of our other flights. We believe our night flights attract passengers who previously relied
upon bus or car travel and who have now become air travel customers. We estimate that on average, approximately
15% of the customers on our flights are either first-time flyers or have not flown for more than one year. We have
developed and will further develop flexible payment mechanisms such as debit payments and long-term installment
payments, with which we are growing our potential market and customer base to broader income classes in Brazil
and South America and which enable us to further penetrate these markets and customers.
We Have One of the Newest Fleets in the Industry. At December 31, 2005, our fleet of 42 Boeing 737
aircraft had an average age of 8.7 years, making our fleet one of the newest in South America. We believe that the
firm purchase orders and purchase options we have for the delivery of up to 101 new Boeing 737-800 Next
Generation aircraft, with expected delivery dates between 2006 and 2010, will further reduce the average age of our
fleet for the next decade and help us to retain this competitive advantage. Our new fleet has enabled us to enjoy a
high degree of performance reliability and to develop a reputation among customers for being an airline that delivers
a safe, on-time, modern and comfortable travel experience. Our Boeing 737-800/700 Next Generation aircraft type
provides us with state-of-the-art technology and aerodynamics with increased flying speed, improved fuel efficiency
and simplified maintenance procedures.
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