Great. Thank you very much, and good morning to everyone.

Thank you for being on the call. Here in -- we have with us on the call Andrés Osorio, the CFO of LATAM Airlines Group; and Cláudia Sender, who's the CEO of TAM; and we're also joined by Andrés del Valle, Corporate Finance Director; Nicolas Goldstein, in charge of the international passenger operations; and Rodrigo Escobar, in charge of the cargo operation.

If you -- we're going to go through the slide presentation and then have some time for Q&A. If we start on the first slide in our presentation.

The first thing to mention when we look at our third quarter numbers is that, as we had already stated in our last call, in our second quarter results, we see during the third quarter, the impact that we had related to the World Cup in the month of July. We were projecting already, as we had mentioned, this impact and we estimate that it was approximately $130 million in terms of reduced revenues.

As a result, we have overall Passenger revenues compared to the third quarter of last year dropping by 6.5%. Passenger revenues are down approximately 7% and Cargo revenues approximately 6%.

Part of this was offset by a reduction in total cost. Operating cost declined by close to 3% compared to the third quarter of last year.

And as a result, operating margin reached 3.8%, lower than what we had in the third quarter of last year. When we look at the bottom line this quarter, it's important to understand that we had an impact of $144 million on the nonoperating side related to the exchange rate fluctuations -- there was an 11% devaluation of the Brazilian reais in September compared to June, which was reflected in this exchange rate loss.

This, in part, was mitigated by the fact that we have been consistently reducing the exposure on the [indiscernible] balance sheet to the Brazilian reais. If you recall, last year, at this time, we were at an exposure of over $2 billion and now we are down to approximately $700 million of exposure at the end of September.

And we expect that to continue to be reduced a little bit more until the end of the year. So had we not had that, this impact would have been much larger.

And the other important thing to mention here when we look at the bottom line is the tax reform in Chile. As you know, there was an increase in the corporate tax rate.

This is a gradual increase in the corporate tax rate, going up from 20% to 27% by 2017. And in Chile, for Chilean accounting purposes, the impact that we see on our deferred taxes of this higher tax rate is recognized in the balance sheet under the equity account.

So we do not see this impact in our P&L, and we will not see it in our P&L for Chilean accounting purposes. If you look at our P&L in our 20F, which we will publish after the close of this year under IFRS, we will see that $150 million impact in the P&L -- that's related to the tax reform.

We wanted to talk a little bit about of the global scenario that the industry as a whole is facing. In general, we have seen over this year, partly last year as well, and going into next year, a generally weaker macro scenario globally and in Latin America.

We have seen GDP growth rates slowing down significantly in most of the countries where we operate, and we have also seen depreciation in local currencies. If you look at an average of the local Latin American currencies, we had almost a 20% depreciation in 2013 and a 15% depreciation in 2014.

All of this has affected, in general, the industry as a whole and especially yields across the industry as well. In addition to that, and also in spite of that, to a certain extent, we have seen that over the past, and this is a bit of a longer time horizon here, we're looking at ASK growth from 2011 until 2014.

Latin America, in general, continues to be a region with higher expected growth rates than other parts of the world. It's also a region that represents attractive opportunities for most carriers to increase their service to South America and we have seen the impact of that in increased capacity growth from many and most of our competitors.

Not only our competitors in the region, if you look on the slide, you can see an estimate of ASK growth from our main South American competitors, and also significant growth in capacity from players from the U.S., from Europe and also from the Middle East that are flying into South America and especially into Brazil. Considering this context, it's important to understand that we feel that we are in a much more strengthened position to face this environment, having already completed the merger between LAN and TAM.

So this scenario reinforces even more the strategic logic of the reason why we did the merger in the year 2012. Now we recognize that in general the environment is much more complex and much more challenging.

And in the face of this, we have been working on a strategic plan looking out until 2018 where we have identified 3 main critical success factors that we feel are key for us to focus on. And those are the customer, the strength of our network and our cost structure.

When we talk about the customer, basically our main objective is to seek and to maintain the preference of our customers. And basically, we do that by offering them a value proposition that is in line with the main attributes that those passengers are looking for.

We are seeking to offer a differentiated passenger experience. We're seeking to leverage digital technology tools for our passengers to be able to manage their own trip and their own experience.

And we are also in the process of building a single brand and a single product and a single value proposition that's coherent across our network. All of this, we expect will improve the passenger experience.

And we are already seeing a -- over the next -- we have already seen an improvement on certain routes as we change our aircraft toward -- to the newer, more modern models, which in addition to efficiency, provide a passenger experience. We're also in the process of retrofitting our 777 fleet, which we expect to complete by -- probably most of it by the end of the first quarter of next year with premium business-class, which will also improve the passenger experience onto long-haul routes out of Brazil.

If we talk a little bit about the network, we feel that we have a significant advantage in terms of the networks given our presence with the -- in terms of the connectivity that we can provide within the region. We're focusing this connectivity on strengthening certain hubs.

And a very important milestone in this process has been the inauguration of Terminal 3 at Guarulhos Airport in São Paulo. LATAM Airlines moved all of our operations to Terminal 3 at the beginning of October.

So today, if you've flown into Brazil, it's really a very different experience from what we had a few months ago. And we also inaugurated this week the new VIP lounge that we have at Guarulhos Airport.

So this is an important step towards improving the strength of our network and really making Guarulhos the main hub in South America. When we look at our cost structure, we have identified certain key initiatives in order to increase the efficiency of our operations.

We believe and we are targeting a reduction of $650 million in our total cost by 2018. These $650 million are estimated based on our 2014 operations, so they're in today's dollars basically.

And those savings will come from initiatives in all of these different elements that you can see on the slide. The largest element here in terms of fuel and fees, where we have a smart fuel and lean fuel initiatives that we have implemented and also efficiency in the supply chain operations, we see reductions in terms of operation, in terms of overhead costs.

We have important initiatives by 2018. We also are working on reduction in distribution costs, which will come from unifying our inventory and distribution systems between LAN and TAM, and we also have projects to significantly reduce our procurement costs.

So all of these initiatives are already being implemented, and we expect to see the results over a -- the next few years. In 2016, towards -- part of the savings that we'll achieve will be offset because, inevitably, we're going to have one-time costs related to some of these savings, but we still seek -- expect to see a net positive effect in 2015, and we expect that effect to increase going forward until 2018.

Looking with a little bit more detail, if you turn to Slide 9, at our results and our margin performance during the third quarter. What we can clearly see here is that our main impact this quarter was in terms of revenue per ASK, mainly driven by a lower yield.

A part of that was in July as a result of the World Cup. It's important to note here that we are comparing to a third quarter of 2013 where we had very strong revenue per ASK performance, especially in the domestic Brazil market.

So that makes the comparison with last year much more difficult. And to offset that, we have seen strong load factors, very strong load factors throughout the network and also savings and efficiencies in certain cost lines.

If we look a little bit more in detail at the passenger operations on Slide 10, you can see that we continue to be very disciplined in terms of our approach to capacity growth. Our capacity in international and local operations has been relatively flat, slightly down compared to the third quarter of last year.

And that has allowed us to reach very strong load factors. Load factors are up over 300 basis points.

And revenue per ASK is declining, mainly as a result of yields impact. In terms of the Brazil domestic operation, this 2% reduction in ASK is mainly driven by a strong reduction in the month of July, as well as - the same goes for the passenger traffic and for the revenue per ASK reduction, which is mostly coming from lower yield compared to the third quarter of last year.

And in the domestic Spanish-speaking operations, if you recall initially when we started the year, we expected higher growth rates. We have reduced those growth rates, taking advantage of flexibility that we have in all of the different markets.

And also looking at a more challenging environment with more depreciated currencies. So that has allowed us to mitigate the negative impact of the slowdown because we had the flexibility to reduce our growth and basically we saw a decline in revenues per ASK of approximately 5% as a result of lower yields, offset by higher load factors.

Looking at the Cargo operation on Slide 11. You can see that in terms of cargo, we have been very strict in terms of reducing our cargo growth, especially when we look at our freighter fleet.

We have been consistently focused on controlling the growth in our freighter fleet, basically focusing on making the best possible utilization of our belly capacity. And that has allowed us to offset somewhat the impact of the relatively weak cargo demand that we are seeing throughout the network.

And as a result, cargo load factors improved about 2 points as compared to last year. This is -- this strategy of very disciplined freighter capacity management, we expect that to continue going forward.

And, specifically, we have reached an agreement with an operator outside of the region to lease out 3 of our 767 freighters to this operators. So that is very good news in terms of being able to reduce our freighter capacity and to better deal with this weaker cargo environment.

If we look at the cost side in general. Here, we have seen a fairly positive performance in terms of fuel.

Fuel and ex-fuel costs, our operating cost, ex-fuel, are down 3.6%. Cost per ASK equivalent, ex-fuel, are down 1.6%.

The main drivers here being wages and benefits, which is the largest line as well as other costs. Aircraft fuel costs we're down 0.8%, in part driven by a relatively good performance symptoms of market fuel prices, but also by increased efficiencies as a result of our more efficient and newer fleet models.

If you look at the next slide, #13, we can see our fleet plan going forward. Here, we are basically expecting relatively small variation in terms of the total number of jets that we are operating.

We expect next year to end the year with 320 jets, down from 325 this year. And in 2016, a small increase.

The important thing here to highlight is the growth that we have in terms of new aircraft is coming mainly from new technologies and much more efficient aircraft. We have in -- we expect to have at the end of this year, 10 787s in operation.

At the end of 2015, this will go up to 17. And by 2016, we should have 23 787s in addition to 7 Airbus A350s in operation.

In terms of the narrow body fleet, we are looking also at almost doubling our capacity in A321s, which given the larger side of the plane has a lower cost per ASK as well. The 787 that we have today allow us to reduce our cost per ASK by about 10% as compared to last year when we look at that at our long haul operations, and for 2018, our estimate is that we will get close to 70% of our total ASKs in our long haul operations with new technologies.

So that's going to result in significant efficiencies. All of these fleet efficiencies that we've already talked about in the past are not included in the $650 million of cost savings that we mentioned before.

So our cost savings plan that we have put in place now as a result of our strategic objectives for the next few years are all in addition to the renewal of our fleet, which is something that we had already discussed a few quarters ago with you. And finally, we are maintaining our guidance for this year both in terms of ASK growth and in terms of margins.

Looking at the margin performance that we've had in the first 9 months of this year, we are targeting the bottom of the 4% to 5% operating margin range. And we have introduced our ASK growth and ATK growth guidance for 2015.

Preliminarily, we're expecting to grow our total ASK by between 2% and 4% for next year. The Brazil domestic operations, we expect to remain flat in terms of ASKs, with about 5% growth coming from our International operations and our Domestic Spanish-speaking operation.

In terms of cargo capacity, we expect between 1% and 3% capacity growth, with that growth coming mainly from growth in the belly capacity, so driven by that 5% growth in international routes. No growth coming from freighters, on the contrary, we have a reduction in terms of our freighter capacity.

Those are all the prepared remarks that we have, and we feel the most important highlights for the quarter. And we'll now be happy to take any questions you may have.

A couple of questions here. Gisela, when you started out in your comments, you talked about the fact that yields were under pressure.

You were seeing a deceleration in GDPs across the region. The currency is under effect -- is under pressure.

And so that would suggest to me that as we look out over the next 6 or 12 months, you would want to take sort of a position where your capacity growth would be very modest, maybe we -- you would even see additional contraction. On the other hand, you did mention the fact that the competition had been adding a lot of capacity in your market.

And so I look out at your 2015 capacity plan and it just -- I'm trying to sort of reconcile that with what's going on with respect to the macro on one hand. On the other hand, you have the competition.

And so are your growth rates, in many of your different segments including cargo, is that in response to the competition? Or is it that you think that economies in the region are going to get better in the latter part of 2015?

I mean, what's going on here? It just seems too aggressive based on the what the macro situation looks like presently.

[indiscernible] We believe we already achieved the adjustments during 2014 and as you can see the growth that we are foreseeing for next year is related to the new fleet that we are getting. This is a smart way of growing, which is with a more efficient fleet.

That's why we are growing, not with new routes, but mostly with new airplanes, with more seats and more efficient.

Okay. So that’s...

There's no -- not a significant development of new long-haul routes, for example. It's basically, we're taking delivery of a 787-9 that are -- that have like 50 more seats than our 787-8.

And that by replacing those aircraft on the routes that they operate, we're able to get a much more efficient operation and relatively efficient growth.

So maybe the way to think about it is the 2% to 4% ASK growth across your system, maybe 90% of that is increased gauge, improved efficiency of the current fleet and maybe there's a small part that -- there's always some new markets. Maybe that's the way to think about it?

One of the efficiency with these new fleet and also we are growing a little bit to Caribbean also. We move to narrow body [indiscernible].

Perfect. My second question, the new regional aviation plan, let's -- if we assume that does pass the -- in Brazil, the upper house, the lower house and it's signed by Dilma in the next few weeks, from what I'm hearing is in the initial year, it looks like the subsidies could be something on the order of like BRL 500 million.

I know on the gold call yesterday, they said USD 20 million. So when I think about that, that's BRL 50 million.

So it seems like there's another BRL 450 million in the first year up for grabs. What -- just based on your current fleet, what do you think the potential upside is to TAM?

And then I know that it's also been reported that you are potentially planning and bringing on some smaller jets, maybe starting in 2015. How much of that initial BRL 500 million do you think you could capture as a result of having a new incremental aircraft that will serve those regional markets?

So it's sort of a 2-part question.

This is Cláudia from Brazil. I think -- thanks for your question.

I think it's very hard to predict the amount of subsidy that first, will be distributed and secondly, that each company that will be entitled to, given that the nature that it's transiting through, the houses, does not give the formula, does not state the formula for calculation of the subsidies. This -- after it passes through all of the houses, then it's vetoed or approved by President Dilma, then there is a whole other definition, which is how will the subsidy be distributed?

Therefore it's very hard today to define, probably our competitors are doing some sort of estimates, but today, it's very hard to define how the subsidy will be distributed, which will be the formula for calculating it and how much will each company be entitled to. Currently, some already fly to 11 regional airports.

We do have a lot of flexibility into our current -- with our current fleet and current operational capacity to serve additional cities. And regardless of what is approved by the government, we do believe that there are other regional cities in Brazil that are interesting for us to serve with our current fleet and with the new fleet and our way of looking at a subject is that getting into a new market must make sense, both strategically and financially, independently of what the subsidy will bring.

Therefore, we're finishing our studies to understand which are the cities that we want to address first. How we want to do it, but do it in a much more integrated way that will strengthen our connectivity and give more -- bring more passengers to the whole of the LATAM network, not only to domestic Brazil.

Oh, great, that was helpful, Cláudia. Can I ask you just 1 more too, and this is on Brazil U.S.

open skies, which I believe it fully phases in at the end of 2015 or sometime in 2015. And I'm just curious, I believe at that point you would have the right, probably by way of TAM, of using TAM to seek antitrust immunity and establish a joint venture with a U.S.

carrier which presumably would be American Airlines. At what point do you start that process and at what point could we actually see American and TAM flying basically as almost as a single entity, as a joint venture with antitrust immunity?

Is that a 2016 event? Could we see it in 2015?

What's the timing on that? Because I know we're getting up to the final year of the phase in.

Yes, you're absolutely correct about the open skies definition. However, the whole process is still -- it's still ongoing, and we don't have set dates yet.

So as soon as there are more information, we may disclose them to you, but we're in the process, we're defining the strategy of how to pursue this type of antitrust and immunity deals going forward.

Just my first question is, just domestic Brazil. I was wondering if you could share with us kind of the monthly progression of the [indiscernible] in 3Q and just to get a sense of how it's looking as we move into the fourth quarter here.

Just to make sure I understood your question, you asked about our CASK evolution?

Yes, CASK in domestic Brazil.

All right. So I think this is one of the really good news that we have.

When we look at our capacity to reduce capacity at the same time as we gain efficiency, third quarter compared to last -- this year compared to last quarter is the same year. Our total CASK has increased less than 1% for the narrow-body operation in Brazil.

Therefore, our capacity to generate more margin with our revenues has definitely improved.

Okay, helpful. And just -- and as you look forward, is the unit revenue, is it -- is that improving?

I know July was really bad, but how is it looking as we look into the seasonally stronger fourth quarter?

Well, I think one of the things that come to mind when we look at the performance in this last third quarter compared to last year, is that last year we had already -- we were already operating at a very high level of load factor. Last year, third quarter, we operated around 81% load factor, which was more or less the same as we operated this year so we have already increased our performance and capacity utilization and how we use our assets.

Looking forward, what we do believe is that we will -- the corporate traffic will catch up compared to what we've seen during the World Cup. So as we look at this year's performance compared to last year, given that there was a lot less corporate revenue, and we have to stimulate the leisure traffic, we did suffer in our yields, but we didn't expect a significant growth anyway for this year.

For next year, we do expect both the leisure traffic and the corporate traffic, to catch up compared to what happened this year, given that during the World Cup, the corporate traffic was very -- went down to a bare minimum, and also it was impacted later in the quarter by the election process as well.

Understood, that's very helpful. And then just in terms of the regional market.

The pressure you mentioned in the press release about competitive capacity being reallocated from Venezuela and that's putting pressure on the rest of the region. How is that progressing?

And when do you expect that pressure to start to abate?

This is a reality that we need to face, to achieve more capacity. Prices for the customer is going down a little bit, but again, this is adjusting.

And now we are observing that it is stabilizing during this quarter, okay? So we are done with the adjustment, with Venezuela, with the operation that we have today.

And what we see looking forward is like a regular operation in the South America.

And from your competitors as well?

All the competitors as well. I mean, they already did the adjustment also on the capacity.

Got it. And are the yields improving?

Or will that take time?

Yields went down during this quarter, and our TAM impact slowly to regular numbers.

I was wondering if you could share with us a timeframe of -- on your efficiencies and cost reduction initiatives. Meaning, how much should we get from -- in 2015?

Yes. We expect that by the end of 2015, we should be able to reach between 25% and 30% of the target.

But 2015 is also the year when we will probably have the most one-time costs related to these savings initiatives. So that will mitigate probably about half of the savings.

And then, going forward, for 2016, 2017 it would just be a sort of linear ramp up to the $650 million target.

Okay, perfect. And what of these one-time costs that you were mentioning, how much will they amount in the next years?

In -- for next year, I -- probably, we're estimating something between $70 million and $80 million for the full year. Part would be -- part of it would be investments and part of it would actually be one-time costs.

Okay, perfect. And these one-time costs, are they also related to your other 2 factors that you are willing to improve, like customer experience, unifying your rent [ph] and something like that?

They don't include an -- no, they don't include a cost related to the other projects.

Okay. And so the other projects, how much investments should we expect from?

That will depend. There are certain decisions that we have not yet finalized.

So for example, we do have a plan to move to a single brand, but we're still defining exactly what that will be and when the change will be made. So once that decision is taken, we'll be able to quantify exactly what the cost associated to that will be.

So we don't have a number right now regarding that.

Two questions from my side. First on flexibility for next year.

Can you comment a little bit what type of flexibility would you have to maybe reduce capacity next year if demand is softer than expected? Or if competition is tougher, how much can you reduce in terms of capacity for '15?

And also for '16, you have a big jump in the fleet. So if demand also does not improve in 2016, what can you do to control capacity and avoid oversupply?

We have, in general, it's when we look at our narrow-body fleet, a significant amount of flexibility that comes from being able to [indiscernible] our aircraft to different markets. So if you -- we saw that this year for example, especially with the Spanish-speaking operations, we had initially started the year expecting to grow between 6% to 8% in our Spanish-speaking operations and we're going to end the year growing probably about half of that, mainly because we were able to reassign aircrafts to other routes and also we have a certain amount of aircraft -- we have approximately 1/3 of our fleet that is on operating leases.

And as those aircraft expire, we are able to re-lease them. So we always maintain a certain amount of flexibility.

I think that part of it also has to do with being able to renegotiate some of our fleet [indiscernible] as necessary. If you recall at the beginning of this year, we've made significant changes in terms of our fleet deliveries for the next few years.

So today, this is a fleet plan that we feel very comfortable with. As Nicholas already mentioned, a lot of this growth is really efficient growth.

So it just comes from new aircraft that come in replacing existing aircraft, and therefore, providing a better passenger experience and a more efficient operation in terms of cost per ASK. So we don't -- we feel that this fleet plan is something that, at this point, we're very comfortable with.

So you would be able to maybe contract your percent if it's necessary, Gisela?

Yes, well we have 17 aircraft that are expiring their lease. So that gives us a certain amount of flexibility.

If you look at the total fleet that's about 5%. [indiscernible] beginning of the year, so it's probably half of that.

But there is flexibility in that sense.

Okay. And the second question is regarding forward booking on the international flights out of Brazil.

Can you give us some color on forward booking for international? The BRL is getting weaker.

You also have new competitors starting to fly to the U.S. now in December.

So if you could give us a color if forward booking international out of Brazil is good or if it's really deteriorating, it would be helpful.

So the demand is probably [ph] fine. I mean, there are passengers.

You can see that in the load factor that we have. Actually we are improving the load factor in a good amount, and we are around 85%.

So there are passengers [indiscernible]

But you are not concerned about the new competition that is coming?

Of course we are very concerned about the many competitions. But they are [indiscernible] depending on the price.

We can play games for them and for us, and the passengers are there. The Brazilian market is huge, and you can stimulate the market with low price.

Is there any currency level that you think would -- maybe impact demand for international flights out of Brazil more significantly? Meaning if the BRL goes to 3 or weaker, do you think that, that could be a more material impact on international demand or no?

It can impact our demand if there's a huge change, probably, but with the numbers that we observe today, 265, close to 260, the demand is still there. We don't see a huge impact with this price.

You probably have it in the slide deck there, which we don't have access to, but could you just remind us what your hedged positions are for 2015, both for fuel and FX and what the price points are?

Okay. For 2014, we have hedge in place, I'm talking about fuel, of 70% of the consumption, that's for Q4.

And going forward, we have about 30% for Q1 and 15% for Q2 and 10% for Q3. Now we are building the hedge for the next years.

Of course, we've seen a big drop on prices and then, of course, we would start that [indiscernible] -- I mean lower baseline, that's for fuel. So we should see losses in Q4 in respect of fuel given that the levels are hypothetical higher price.

We're seeing a lot of that volatility in the lower prices, that's for fuel. For FX exposure, mainly BRL, we have hedges in place, which go through the end of Q4 of this year at the level of roughly at 2.41, so it's in the months to seek, so we should see a cost effect of those hedges for our Q4 on BRL.

Next year, given the recent volatility on currency, especially on BRL, given the elections, it was very volatile so we haven't yet build our position for next year, but we do intend to do so.

Okay, that's very helpful. And then I wonder if you could comment on 1 market specifically, Argentina.

What you're seeing on the ground there in terms of demand and the competitive environment. And I wonder if you'd be able to quantify what the impact was from a profitability perspective in the third quarter from that market?

This is Nicolas again. What we observed in terms of demand is passengers going down, close to 15% and yields from 10% to 15% and yields going down from 5% to 8%.

So when you combine both, we are close to 20%, which is less than what we comment on the last call. And, of course, we are doing a weekly basis review on Argentina because we know the demand can change, so we are observing this market very close, every single week with the domestic market, with the regional market and in the international long haul market.

I have a couple of questions. First of all, I wonder if you could please share with us what your thoughts on a possible yield contraction looking forward, as a result of basically lower prices and greater competition in Latin America?

And my second question is regarding [indiscernible]. Basically I would like to know your thoughts on when you're expecting to combat [indiscernible] in this scenario in which you are expecting to implement cost-cutting initiatives and to further execute synergies?

This is Andrés Osorio. I didn't get the first question.

So let's answer the second. And please do the first one again.

Starting with investment grade, as I talked a couple of weeks ago, based on the plan and the strategic plan that we have for -- to year 2018, we expect that, that we can recover the investment grade by that time. As you may know, this year the results will not help us to recover, but we expect that, that would increase in result for 2015, 2016 and 2017 when the evaluation of 2017 being place, we expect that the numbers and the balance and the results will come out with a good evaluation and that we can recover our investment grade by that time.

So my first question was regarding basically a scenario of low oil prices and I would like to know what are your thoughts on a possible yield contraction looking forward as a result of lower fuel expenses and greater competition in South America.

Yes. Well, in general -- I mean, there's a scenario of low oil prices will inevitably, in the medium-term, in general, be passed through into yield.

So we do expect to see the fuel prices go down, obviously most carriers will eventually pass that through in terms of prices and prices will tend to adjust downwards. In the same way that when fuel prices go up, through a fuel surcharge mechanism we increase and try to pass through a significant part of that in our yields.

So yes, we would expect lower yields if the fuel price declines significantly.

Yes. And a follow-up question regarding this.

I mean, what are you expecting specific markets, such as Brazil and Colombia regarding the competitive environment? I mean, basically regarding the low-cost carriers.

I mean, in a low price -- in a low oil price scenario, could you expect a further deterioration in market share?

This is Cláudia. Let me try to tackle the Brazil question.

I think overall, when you talk about oil process, it impacts everybody the same way. Especially for us, going into more competitive aircraft, I think our fuel consumption and all of the initiatives that we implemented in terms of smart use of fuel, we do see that our consumption will go down and our cost should go down comparatively, but I think it impacts everybody.

So it shouldn't change the overall dynamics of the market.

That's very helpful. And what about Colombia?

In Colombia, regarding the fuel price, or?

Yes. Yes, exactly because basically what we have seen in Colombia is there's a new low-cost carrier has been gaining, very rapidly, market share.

So I would like to know, looking forward, what you starting to somehow counteract this effect in a low oil price scenario?

Well, I think that in a low -- I mean, regardless of the oil price scenario, I think, what we've been seeing in Colombia is a very healthy market. We have seen a -- we have seen very significant growth this year in Colombia from all the carriers.

We actually ended up growing domestic Colombia more than we had initially expected, as did our main competitors. Part of that and the third player in that market which is the low-cost carrier that you're referring to, is also in line with us.

I think that for this year, Colombia has been probably the healthiest market in the region. And I think if the fuel price declines significantly, we'll probably see the same sort of effect in terms of the competitive environment that we would see in other markets, but it shouldn't change the fundamental dynamics that we're seeing in that industry.

I wanted to go back to one of the earlier questions that was asked about corporate travel. I'm not sure why there's this static here on this line.

What -- how do we get confidence in corporate travel is actually picking up and improving other than the fact that you've got a low base effect? Is this based on conversations we're having with companies?

I realize that corporate travel budgets are only being thought about right now. But I'm curious as to what initial discussions that you may have had, I'm not asking to spell out specific customers, but how do we get indication based on your conversations or if you can give us some sort of color in terms of your talks with your corporate customers as to how they're thinking about corporate travel budgets next year in view of a challenging economy?

This is Cláudia. I was the one who made a comment about the corporate traffic.

So I'll try to tackle your question. Let me know if I answer your question correctly.

What we do see is that especially during the World Cup period the corporate traffic went down to levels that we haven't seen in a very, very long time. And since July, we have seen a very significant pickup during the months of August and September.

We have seen a very significant pickup in corporate travel in actual flown traffic. October was a little softer due to elections and lower traffic in Brazil, but since -- after the election, we have seen again a pickup in corporate bookings.

So this comes from both our conversation with the corporate travel agents, but also agencies, but also from the real bookings that are coming from these agencies and these clients.

I mean, is there any -- I realize this is a very transactional industry and it's hard to know what the fold will be, but I guess just as the year progresses, I mean, would you be able to include in some of the commentary the -- further sort of commentary around corporate bookings? I mean, I feel like this is a really good point, but it's just one for us where this seems like transparency, it's harder to -- for us to really see other than just looking at some of the bigger macro trends or even looking at various CapEx budgets, which can be sort of indicators on that front?

And I'm just wondering, how do you -- how can help us think about the forward for corporate travel into next year? Again other than just the fact that you've got a low base effect?

Well, I think it's hard to -- given -- compared to this year, we're confident that there will be a pickup given that what you said, the base effect, and the low-cost and elections effect, other than that, it does have a lot of dependency on how the economy will grow in the region. So it's kind of hard -- it's very hard right now to make a full year projections of how the corporate traffic will behave in 2015.

That's fair enough. Can I switch topics on the fuel, the base case assumption for fuel?

May I ask why you're using 120 as the base for your fuel assumptions? It seems really conservative.

Yes. The 120 is what we are using for 2014.

So it's probably going to end up being slightly lower than that for the full year 2014. But -- for 2015, we still haven't finalized the budgeting or provided any guidance.

So it will most probably, for 2015, we'll be using a number lower than that in line with the current market trends.

This is Kevin Kaznica filling in for Steve. Basically all our questions have been answered.

But just kind of circling back to the regional aviation bill. Now assuming that Dilma doesn't veto the foreign ownership part of the bill and it does pass through all the houses, do think this could lead LATAM to try to buy out [indiscernible] voting stake?

This is Gisela. We have -- when we first did the structure of the merger, we have a certain shareholders agreement and that basically maintained a percentage of the voting shares with the Brazilian shareholders.

And unless anything is revised in the law, we would not make any changes to that structure.

Okay. Yes -- but I mean, there is a potential, I guess that -- I don't know, the statutory 20% cap gets lifted to, theoretically 100%, would it be interesting to you to kind of pursue a higher percentage, I guess?

Or buying out some of the voting stake if that does pass?

It would be something that would -- that, yes, that is provided for in the shareholders' agreement, but it would require this change to go through first.

Understood. And then just one more question.

What are the key factors in your decision to purchase regional aircraft? Are you seeing like Brazil's potential regional aircraft stimulus against high jet fuel carriers and taxation on domestic flights and FX risks?

And when you think regional aviation, are you thinking about fleet related adjustments on a system-wide basis or just in Brazil?

Well, I think the first market we're seriously considering it for is for domestic Brazil for the regional routes given that it makes sense. Well, the key factors that we're looking into are: first, what type of routes are better served with lower cost per trip rather than the lower cost per seat; second is, what type of airports do not support bigger airplanes that would require smaller seats to operate and our markets in development; and third, I think this is the -- Gisela talked about the fourth, is we want to provide the better -- the best network coverage for all Latin American passengers to, from and within Latin American cities.

And to make sure that we provide that, we will need probably, in the future, smaller aircraft to serve some markets that are growing and that are very interesting and are important for our clients. But first and foremost, this markets need to be both financially and strategically viable regardless of the subsidy.

After that, we may consider getting into other international or regional markets out of Brazil.

Understood and I'm sorry, you actually lead right into the next question I wanted to ask. How would potential aircraft fleet additions in the lower gauge, I guess, segment dovetail with your announced plans to reduce your cost overall by like $650 million?

Especially since you're accepting larger planes and that's driving your capacity growth expectations for 2015? But how would these smaller planes, if you acquire them over time, fit with your cost reduction plans?

Well, I think as Cláudia said, these planes are evaluated on their own in terms -- I mean, we would look at the whole project and make sure that there's financial viability in that. The numbers that we have provided in our current plans do not include any investments in regional aircraft; the seat plan that you saw in the slide and the $650 million in terms of cost would occur independent of the decision that we take regarding the regional aviation aircraft.

Those would be evaluated on their own based on the financial feasibility of their operation.

I just wanted to check if you've come to a decision on the timing for the migration of TAM's reservation systems from Amadeus to Sabre? And when you talk about the one-off costs that you have projected for 2015, if you are considering implementation costs related to reservation systems and a potential -- I don't know if there will be a fine if you decide, if you leave Amadeus, if I'm not mistaken, you signed a 10-year partnership with them in 2010.

If you could explain this. And then, I guess some color on when this migration of systems will take place on -- at TAM?

Yes. Well, currently, as you know, TAM and LAN are functioning on different reservation systems.

We are in the process of evaluating both of those to design how a potential integration of this could take place. There is not a decision, which one it would be.

So we're still looking at that, and we haven't made any definite decision regarding that. And in any case, it would not be something that is -- that would happen within the next, probably 1 year to 2 years.

So it's a bit of a longer term project and there still hasn't been a definition taken to that effect.

[indiscernible] fuel a little bit? Could you tell us what you're actually paying now in terms of your current fuel price?

And how that is as compared to what it was in the third quarter, so we get a sense of how much downturn we've seen in the price? And then secondly, as it relates to fuel, when you talk about being 70% hedged, do you hedge with swaps where you're actually locked in?

Or are these calls or derivatives where, yes, there's a premium that you paid, but that premium is a one-time deal. Could you tell us how you actually do your hedging?

Yes. Regarding the price for the third quarter, we were paying $3.39 this quarter on average excluding the hedge effects, and that's 1.5% lower than what we were paying in the third quarter of 2013.

And Andrés can provide more details about the hedging strategy.

Yes, I'm going to the second part of the question. You asked exactly do we have for Q4.

We have roughly 50% of total consumption hedge [indiscernible] swap and then the rest at 20%, to total 70%, is at callers [ph].

20% in callers [ph]? I was having trouble hearing you.

It wasn't quite loud enough, please.

20% is callers, and 50% is in swap.

Okay. And then -- no -- my question on prices was, what we're seeing today in the fourth quarter versus sequentially the third quarter we just completed.

How much are we seeing in the last few weeks with the price of oil coming down as much? Not what was it versus last year?

Yes, we're seeing the same. So our fuel prices go down in line with the market price reduction with approximately like a 2-week lag.

So that's in line with market prices probably with a 15-day delay.

Okay. Great.

And then secondly, in the last several quarters, going back to Brazil and domestic Brazil and the revenue issues over there. In the last several quarters, we've seen both with you and with [indiscernible], where have reduced capacity wisely to get rid of flying that was less productive.

And as a result, the RASK has gone up. And then, but in -- and both of you carriers seem to be moving in the same direction and doing the right thing.

But in this quarter, there seems to be a divergence, where both of you reduced your capacity, but their RASK went up 9% and yours went down 11%, and obviously you both had World Cup issues. Is there something else that happened there that I'm missing?

Yes. I think the big difference is that in the same quarter last year, TAM was already operating at 81% load factor whereas the competition was below 70%.

Therefore, the yield impact was felt by everyone, but there was more room for load factor improvement in the other carriers than we had in our operations. But as you look back in the previous 18 months, in the last 6 quarters, we have been improving our load factors.

And now, we have a more limited room for growing in terms of additional passengers, so that's where the RASK difference really impacted us compared to last year.

So it's really -- there really isn't anything other than just -- we all knew that their load factor had climbed in the last quarter or so, and you're saying really, that's really the only difference that we see?

That's our point of view. Also if you look at our RASK, our pure RASK, there is some difference between the two companies, which is our stage length is, on average, 17% higher than the main competitor.

So when we compare RASK, stage-linked adjusted, our RASK still carries a premium of around 5% even in the third quarter of this year.

I know. I was aware of that.

I was just curious about this difference in the change and I guess -- and I had -- I didn't realize that -- I was wondering if there was anything other than the load factor. That's very helpful.

Great. Well, thanks to everyone, very much, for participating.

And if you have any follow-up questions, we'll be happy to discuss. You can call us directly.

Thanks, and have a good day. Bye.