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Risk Management
 12 Months Ended
Dec. 31, 2023
Disclosure of detailed information about financial instruments [abstract]  
RISK MANAGEMENT RISK MANAGEMENT
35.1Accounting policies
Operating activities expose the Company to the following financial risks: (i) market risk, related to interest rate, fuel price and exchange rate, (ii) credit risk and (iii) liquidity risk.
The risks are monitored by the Company’s management and can be mitigated through the use of swaps, terms and options, interest, in the oil markets and currency .
All activities with derivative financial instruments for risk management are carried out by specialists with skill, experience and adequate supervision. It is the Company's policy not to operate transactions for speculative purposes.
35.2Fair value hierarchy of financial instruments
The following hierarchy is used to determine the fair value of financial instruments:
Level 1: quoted prices, without adjustment, in active markets for identical assets and liabilities;
Level 2: other techniques for which all inputs that have a significant effect on the fair value recorded are directly or indirectly observable; and
Level 3: techniques that use data that have a significant effect on the fair value recorded that are not based on observable market data.
The fair value hierarchy of the Company's consolidated financial instruments, as well as the comparison between carrying amounts and fair values, are presented below:
Carrying amountFair value
December 31,December 31,
DescriptionNoteLevel2023202220232022
Assets
Cash and cash equivalents621,897,336 668,348 1,897,336 668,348 
Long-term investments72780,312 733,043 780,312 733,043 
Derivative financial instruments23221,909 271,950 21,909 271,950 
Liabilities
Loans and financing 182(9,698,912)(7,232,699)(9,796,608)(6,187,389)
Convertible instruments 202(712,835)(1,286,748)(712,835)(1,286,748)
Convertible debt instruments – conversion right202(488,775)(116,971)(488,775)(116,971)
Derivative financial instruments 232(69,745)(244,575)(69,745)(244,575)
Financial instruments carried at amortized cost whose fair value is a reasonable approximation of their book value, mainly due to the short maturity of these assets and liabilities, have not been presented above.
35.3Market risks
35.3.1 Interest rate risk
35.3.1.1 Sensitivity analysis
As of December 31, 2023, the Company held financial assets and liabilities linked to various types of rates. In the sensitivity analysis of non-derivative financial instruments, the impact on annual interest was only considered on positions with values exposed to such fluctuations:
Consolidated
Exposure to CDIExposure to SOFRExposure to LIBOR
DescriptionRate (p.a.)December 31,
2023		Weighted rate (p.a.)December 31,
2023		Weighted rate (p.a.) December 31,
2023
Exposed assets (liabilities), net11.7 %674,747 5.3 %(423,134)5.6 %(93,687)
Effect on profit or loss
Interest rate devaluation by -50%5.8 %(39,205)2.7 %11,297 2.8 %2,618 
Interest rate devaluation by -25%8.7 %(19,602)4.0 %5,648 4.2 %1,309 
Interest rate appreciation by 50%17.5 %39,205 8.0 %(11,297)8.4 %(2,618)
Interest rate appreciation by 25%14.6 %19,602 6.7 %(5,648)7.0 %(1,309)
Assets and liabilities linked to LIBOR are being reviewed and will be updated using alternative published rates. The Company estimates that the updated cash flows will be economically equivalent to the original ones.
35.3.1 Aircraft fuel price risk (“QAV”)
The price of fuel may vary depending on the volatility of the price of crude oil and its derivatives. To mitigate losses linked to variations in the fuel market, the Company had, as of December 31, 2023, forward transactions on fuel (note 23).
35.3.2.1 Sensitivity analysis
The following table demonstrates the sensitivity analysis in US dollars of the price fluctuation of QAV liter:
Exposure to price
DescriptionAverage price per liter
(in reais)		December 31, 2023
Aircraft fuel4.85 (5,890,485)
Effect on profit or loss
Devaluation by -50%2.43 2,945,243 
Devaluation by -25%3.64 1,472,621 
Appreciation by 50%7.28 (2,945,243)
Appreciation by 25%6.06 (1,472,621)
35.3.1 Foreign exchange risk
The foreign exchange risk arises from the possibility of unfavorable exchange differences to which the Company's cash flows are exposed.
The equity exposure to the main variations in exchange rates is shown below:
Exposure to US$Exposure to €
December 31,December 31,
Description2023202220232022
Assets
Cash and cash equivalents 82,975 56,487 4,092 8,052 
Long-term investments — — 780,312 733,043 
Accounts receivable 115,024 166,012 2,876 — 
Aircraft sublease 30,802 176,053 — — 
Deposits 2,196,474 2,471,349 — — 
Other assets26,207 12,636 — — 
Total assets2,451,482 2,882,537 787,280 741,095 
Liabilities
Loans and financing(8,889,048)(5,879,553)— — 
Leases (14,043,101)(14,525,385)— — 
Convertible debt instruments (1,201,610)(1,419,738)— — 
Accounts payable(2,040,546)(1,031,059)— — 
Airport taxes and fees(21,994)(20,320)— — 
Provisions and other liabilities(2,681,857)(3,020,947)— — 
Total liabilities(28,878,156)(25,897,002)— — 
Net exposure(26,426,674)(23,014,465)787,280 741,095 
Net exposure in foreign currency(5,458,590)(4,410,845)147,111 133,066 
35.3.3.1 Sensitivity analysis
Exposure to US$Exposure to €
DescriptionClosing rateDecember 31,
2023		Closing rateDecember 31,
2023
Exposed assets (liabilities), net4.8413 (26,426,674)5.3516 787,280 
Effect on profit or loss
Foreign currency devaluation by -50%2.4207 13,213,337 2.6758 (393,640)
Foreign currency devaluation by -25%3.6310 6,606,669 4.0137 (196,820)
Foreign currency appreciation by 50%7.2620 (13,213,337)8.0274 393,640 
Foreign currency appreciation by 25%6.0516 (6,606,669)6.6895 196,820 
35.4Credit risk
Credit risk is inherent to the Company's operating and financial activities, mainly disclosed in cash and cash equivalents, long-term investments, accounts receivable, aircraft sublease, security deposits and maintenance reserves. Financial assets classified as cash and cash equivalents are deposited with counterparties that have a minimum investment grade rating in the assessment made by agencies S&P Global Ratings, Moody's or Fitch (between AAA and A+). The TAP Bond is guaranteed by intellectual property rights and credits related to the TAP mileage program.
Credit limits are established for all customers based on internal classification criteria and the carrying amounts represent the maximum credit risk exposure. Outstanding receivables from customers are frequently monitored by the Company and, when necessary, allowances for expected credit losses are recognized.
Derivative financial instruments are contracted on the over-the-counter market (OTC) from counterparties with a minimum investment grade rating, or on commodities and futures exchanges (B3 and NYMEX), which substantially mitigates the credit risk. The Company assesses the risks of counterparties in financial instruments and diversifies its exposure periodically.
35.5Liquidity risk
The maturity schedules of the Company’s consolidated financial liabilities as of December 31, 2023 are as follows:
December 31, 2023
DescriptionCarrying amountContractual cash flowsUntil 1 yearFrom 2 to 5 yearsAfter 5 years
Loans and financing9,698,912 15,035,043 2,068,226 10,066,315 2,900,502 
Reverse factoring 290,847 294,164 294,164 — — 
Leases15,146,411 25,123,150 3,936,476 13,921,792 7,264,882 
Convertible debt instruments1,201,610 1,883,787 143,109 1,740,678 — 
Accounts payable3,598,768 3,988,050 2,370,980 1,138,958 478,112 
Airport taxes and fees1,760,083 2,019,044 759,679 1,259,365 — 
Derivative financial instruments 69,745 69,745 68,905 840 — 
31,766,376 48,412,983 9,641,539 28,127,948 10,643,496 
35.6Capital management
The Company seeks capital alternatives in order to satisfy its operational needs, aiming at a capital structure that it considers adequate for the financial costs and the maturity dates of funding and its guarantees. The Company continuously monitors its net indebtedness, see note 2 with details of the Company's actions in the year ended December 31, 2023.