20-F/A

As filed with the Securities and Exchange Commission on May 30, 2018.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________

FORM 20-F/A

(Amendment No. 1)

¨	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
	OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017
	OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	OR
¨	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-32221

Gol Linhas Aéreas Inteligentes S.A.

(Exact name of Registrant as specified in its charter)

Gol Intelligent Airlines Inc.

(Translation of Registrant’s name into English)

_________________

The Federative Republic of Brazil

(Jurisdiction of incorporation or organization)
Richard F. Lark, Jr.
+55 11 5098-7881
Fax: +55 11 5098-2341
E-mail: ri@voegol.com.br
Praça Comandante Linneu Gomes, S/N Portaria 3,
Jardim Aeroporto
04626-020 São Paulo, São Paulo
Federative Republic of Brazil
(+55 11 2128-4700)

(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

___________________________________________

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class:	Name of each exchange on which registered:
Preferred Shares, without par value American Depositary Shares (as evidenced by American Depositary Receipts), each representing one share of Preferred Stock	New York Stock Exchange* New York Stock Exchange

1

* Not for trading purposes, but only in connection with the trading on the New York Stock Exchange of American Depositary Shares representing those preferred shares.

___________________________________________

Securities registered or to be registered pursuant to Section 12(g) of the Act:
None

___________________________________________

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:None

___________________________________________

Number of outstanding shares of each class of stock of Gol Linhas Aéreas Inteligentes S.A. as of December 31, 2017:

2,863,682,710 Shares of Common Stock

265,899,432 Shares of Preferred Stock

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

If this is an annual or transition report, indicate by check mark if the Registrant is not required to file pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ¨ Accelerated Filer x Non-accelerated Filer ¨ Emerging growth company ¨

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ¨

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨ International Financial Reporting Standards as issued by the International Accounting Standards Board x Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow.

Item 17 ¨ Item 18 ¨

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

2

Explanatory Note

This Amendment No. 1 to the Annual Report on Form 20-F for the year ended December 31, 2017 of Gol Linhas Aéreas Inteligentes S.A. (the “Company”), filed with the Securities and Exchange Commission on April 30, 2018 (the “Annual Report”), is being filed for the following reasons:

(i) To file Exhibit 101, which presents financial information of the Company in eXtensible Business Reporting Language (XBRL). “Item 19. Exhibits” of the Annual Report is hereby amended to include the following exhibits:

Exhibit Number	Description
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Scheme Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Scheme Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Scheme Label Linkbase.
101.PRE	XBRL Taxonomy Extension Scheme Presentation Linkbase.

(ii) To amend and restate the second footnote under the table “Reconciliation of Net Income (Loss) to EBITDA and EBITDAR” in “Item 3. Key Information—A. Selected Financial Data,” on page 7 of the Annual Report, as follows:

(2) We calculate EBITDA as net income (loss) plus financial income (expense), net, income taxes and depreciation and amortization. We calculate EBITDAR as net income (loss) plus financial income (expense), net, income taxes, depreciation and amortization and aircraft rent expenses. EBITDA and EBITDAR are not measures of financial performance recognized under Brazilian GAAP or IFRS, nor should they be considered as alternatives to net income (loss) as measures of operating performance, or as alternatives to operating cash flows or as measures of liquidity. EBITDA and EBITDAR are not calculated using a standard methodology and may not be comparable to the definition of EBITDA or EBITDAR or similarly titled measures used by other companies. Because our calculation of EBITDA eliminates financial income (expense), net, income taxes and depreciation and amortization, we believe that our EBITDA provides an indication of our general economic performance, without giving effect to interest rate or exchange rate fluctuations, changes in income and social contribution tax rates or depreciation and amortization. Because our calculation of EBITDAR eliminates aircraft rent expenses, which are a normal and recurring cash operating expense necessary to operate our business, our EBITDAR’s usefulness is especially limited and we present EBITDAR solely as a valuation metric. You should not consider EBITDAR as a measure of our general economic performance.

(iii) To file amended consolidated financial statements, which reflect the following two amendments:

(a) To include additional disclosure on total net income (loss) attributable to equity holders of the parent and the Company’s calculation of earnings (loss) per share in explanatory note “13. Earnings (loss) per share” to the Company’s audited consolidated financial statements for the years ended December 31, 2017, 2016 and 2015, on page F-36 of the Annual Report, to clarify that the Company’s preferred shares carry economic rights, including dividend rights, 35 times those of common shares. Accordingly, net income (loss) for the year attributable to equity holders of the parent is allocated in proportion to equity holders’ interest in common shares and preferred shares.

The following table sets forth net income (loss) for the year attributable to equity holders of the parent for the periods indicated:

	December 31, 2017			December 31, 2016			December 31, 2015
	Common	Preferred	Total	Common	Preferred	Total	Common	Preferred	Total
Numerator
Net income (loss) for the year attributable to equity holders of the parent	7,869	11,315	19,184	353,129	496,490	849,619	(2,123,945)	(2,336,938)	(4,460,883)
	7,869	11,315	19,184	353,129	496,490	849,619	(2,123,945)	(2,336,938)	(4,460,883)
Denominator
Weighted average number of outstanding shares (in thousands)*	4,981,350	204,664		5,035,037	202,261		5,035,037	158,285
Effects of dilution from stock options	-	2,614		-	347		-	-
Adjusted weighted average number of outstanding shares and diluted presumed conversions (in thousands)*	4,981,350	207,278		5,035,037	202,608		5,035,037	158,285
Basic earnings (loss) per share	0.002	0.055		0.070	2.455		(0.422)	(14.764)
Diluted earnings (loss) per share	0.002	0.055		0.070	2.450		(0.422)	(14.764)

(*) Weighted average considers the split of common shares approved at the Company’s extraordinary shareholders’ meeting on March 23, 2015, in accordance with IAS 33. Earnings per share presented herein reflects the economic rights attributable to each class of shares.

(b) To replace the misidentified term “Gross profit” with the correct term “Total net revenue” in the tables presenting net revenue in explanatory note “25.2. Results of the operating segments” to the Company’s audited consolidated financial statements for the years ended December 31, 2017, 2016 and 2015, on pages F-51, F-52 and F-53 of the Annual Report, as follows:

	12/31/2017
	Flight transportation	Smiles loyalty program (d)	Combined information	Eliminations	Total consolidated
Net revenue
Passenger (*)	8,785,938	-	8,785,938	399,867	9,185,805
Cargo and other (*)	768,566	-	768,566	(104,350)	664,216
Mileage revenue (*)	-	1,804,129	1,804,129	(1,078,128)	726,001
Total net revenue	9,554,504	1,804,129	11,358,633	(782,611)	10,576,022

	12/31/2016
	Flight transportation	Smiles loyalty program	Combined information	Eliminations	Total consolidated
Net revenue
Passenger (*)	8,340,545	-	8,340,545	330,897	8,671,442
Cargo and other (*)	729,096	-	729,096	426	729,522
Mileage revenue (*)	-	1,548,109	1,548,109	(1,081,738)	466,371
Total net revenue	9,069,641	1,548,109	10,617,750	(750,415)	9,867,335

	12/31/2015
	Flight transportation	Smiles loyalty program	Combined information	Eliminations	Total consolidated
Net revenue
Passenger (*)	8,294,463	-	8,294,463	288,925	8,583,388
Cargo and other (*)	941,928	47,199	989,127	(19,198)	969,929
Miles revenue (*)	-	1,172,322	1,172,322	(947,632)	224,690
Total net revenue	9,236,391	1,219,521	10,455,912	(677,905)	9,778,007

This Amendment No. 1 comprises a cover page, this explanatory note, the amended consolidated financial statements, the exhibits referred to in paragraph (i) of this explanatory note, the signature page and the required certifications of the chief executive officer and chief financial officer of the Company.

Except as described above, this Amendment No. 1 does not amend any other information set forth in the Annual Report, and the Company has not updated disclosures included therein to reflect any events that occurred subsequent to April 30, 2018.

ITEM 19. EXHIBITS

Exhibit Number		Description
12.1	*	Section 302 Certification of Chief Executive Officer.
12.2	*	Section 302 Certification of Chief Financial Officer.
13.1	*	Section 906 Certification of Chief Executive Officer.
13.2	*	Section 906 Certification of Chief Financial Officer.
101.INS	*	XBRL Instance Document.
101.SCH	*	XBRL Taxonomy Extension Schema.
101.CAL	*	XBRL Taxonomy Extension Scheme Calculation Linkbase.
101.DEF	*	XBRL Taxonomy Extension Scheme Definition Linkbase.
101.LAB	*	XBRL Taxonomy Extension Scheme Label Linkbase.
101.PRE	*	XBRL Taxonomy Extension Scheme Presentation Linkbase.
* Filed herewith.

Consolidated financial statements

GOL Linhas Aéreas Inteligentes S.A.

December 31, 2017, 2016 and 2015

with Reports of Independent Registered Public Accounting Firm

Gol Linhas Aéreas Inteligentes S.A.

Consolidated financial statements

December 31, 2017, 2016 and 2015

Contents

Report of Independent Registered Public Accounting Firm	F-1
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	F-2
Statements of financial position	F-3
Statements of operations	F-5
Statements of comprehensive income (loss)	F-6
Statements of changes in equity	F-7
Statements of cash flows	F-8
Notes to the consolidated financial statements	F-10

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Gol Linhas Aéreas Inteligentes S.A.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Gol Linhas Aéreas Inteligentes S.A. (the Company) as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with International Financial Reporting Standards - IFRS as issued by the International Accounting Standards Board - IASB.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 30, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ ERNST & YOUNG

Auditores Independentes S.S.

We have served as the Company's auditor since 2014.

São Paulo, Brazil

April 30, 2018, except for Notes 13 and 25.2, which are dated May 30, 2018

F - 1

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Gol Linhas Aéreas Inteligentes S.A.

Opinion on Internal Control over Financial Reporting

We have audited Gol Linhas Aéreas Inteligentes S.A.’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Gol Linhas Aéreas Inteligentes S.A. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s consolidated statements of financial position as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2017,and the related notes and our report dated April 30, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ ERNST & YOUNG

Auditores Independentes S.S.

São Paulo, Brazil

April 30, 2018

F - 2

Gol Linhas Aéreas Inteligentes S.A.

Consolidated statements of financial position

As of december 31, 2017 and 2016

(In thousands of Brazilian Reais - R$)

Assets	Note	12/31/2017	12/31/2016
Current assets
Cash and cash equivalents	3	1,026,862	562,207
Short-term investments	4	955,589	431,233
Trade receivables	6	936,478	760,237
Inventories	7	178,491	182,588
Recoverable taxes	8.1	83,210	27,287
Derivatives	27	40,647	3,817
Other current assets		123,721	113,345
Total current assets		3,344,998	2,080,714
Noncurrent assets
Deposits	9	1,163,759	1,188,992
Restricted cash	5	268,047	168,769
Recoverable taxes	8.1	7,045	72,060
Deferred taxes	8.2	276,514	107,159
Other noncurrent assets		-	4,713
Investments	12	1,333	17,222
Property, plant and equipment	14	3,195,767	3,025,010
Intangible assets	15	1,747,285	1,739,716
Total noncurrent assets		6,659,750	6,323,641
Total assets		10,004,748	8,404,355

The accompanying notes are an integral part of these consolidated financial statements.

F - 3

Gol Linhas Aéreas Inteligentes S.A.

Consolidated statements of financial position

As of december 31, 2017 and 2016

(In thousands of Brazilian Reais - R$)

Liabilities and equity	Note	12/31/2017	12/31/2016
Current liabilities
Short-term debt	16	1,162,872	835,290
Suppliers		1,249,124	1,097,997
Suppliers - Forfaiting	17	78,416	-
Salaries		305,454	283,522
Taxes payable	18	134,951	146,174
Landing fees		365,651	239,566
Advance ticket sales	19	1,456,939	1,185,945
Mileage program	20	765,114	781,707
Advances from customers		21,718	16,823
Provisions	21	46,561	66,502
Derivatives	27	34,457	89,211
Operating leases	26	28,387	7,233
Other liabilities		100,401	98,772
Total current liabilities		5,750,045	4,848,742
Noncurrent liabilities
Long-term debt	16	5,942,795	5,543,930
Suppliers		222,026	13,517
Provisions	21	562,628	723,713
Mileage program	20	188,204	219,325
Deferred taxes	8.2	188,005	338,020
Taxes payable	18	66,196	42,803
Operating leases	26	110,723	-
Other liabilities		43,072	31,056
Total noncurrent liabilities		7,323,649	6,912,364
Equity	22
Capital stock		3,082,802	3,080,110
Share issuance costs		(155,618)	(155,618)
Treasury shares		(4,168)	(13,371)
Capital reserves		88,762	91,399
Equity valuation adjustments		(79,316)	(147,229)
Share-based payments reserve		119,308	113,918
Gains on change in investment		760,545	693,251
Accumulated losses		(7,293,274)	(7,312,458)
Deficit attributable to equity holders of the parent		(3,480,959)	(3,649,998)
Non-controlling interests from Smiles		412,013	293,247
Total deficit		(3,068,946)	(3,356,751)
Total liabilities and deficit		10,004,748	8,404,355

The accompanying notes are an integral part of these consolidated financial statements.

F - 4

Gol Linhas Aéreas Inteligentes S.A.

Consolidated statements of operations

For the years ended of December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except basic and diluted earnings (loss) per share)

	Note	12/31/2017	12/31/2016	12/31/2015
Net revenue
Passenger		9,185,805	8,671,442	8,583,388
Cargo and other		1,390,217	1,195,893	1,194,619
Total net revenue	23	10,576,022	9,867,335	9,778,007
Operating costs and expenses
Salaries		(1,708,111)	(1,656,785)	(1,580,531)
Aircraft fuel		(2,887,737)	(2,695,390)	(3,301,368)
Aircraft rent		(939,744)	(996,945)	(1,100,086)
Sales and marketing		(590,814)	(555,984)	(617,403)
Landing fees		(664,170)	(687,366)	(681,378)
Aircraft, traffic and mileage servicing		(874,736)	(753,497)	(678,075)
Maintenance, materials and repairs		(368,719)	(593,090)	(603,925)
Depreciation and amortization		(505,425)	(447,668)	(419,691)
Passenger service expenses		(437,045)	(461,837)	(481,765)
Other operating expenses		(610,310)	(320,948)	(493,621)
Total operating costs and expenses		(9,586,811)	(9,169,510)	(9,957,843)
Equity results	12	544	(1,280)	(3,941)
Income (loss) before financial result, net and income taxes		989,755	696,545	(183,777)
Financial results	24
Financial income		213,446	568,504	332,567
Financial expenses		(1,050,461)	(1,271,564)	(1,328,891)
Exchange rate variation, net		(81,744)	1,367,937	(2,266,999)
Total financial results		(918,759)	664,877	(3,263,323)
Income (loss) before income taxes		70,996	1,361,422	(3,447,100)
Income taxes
Current		(239,846)	(257,944)	(196,140)
Deferred		547,059	(1,114)	(648,000)
Total income taxes	8	307,213	(259,058)	(844,140)
Net income (loss) for the year		378,209	1,102,364	(4,291,240)
Net income (loss) attributable to:
Equity holders of the parent		19,184	849,619	(4,460,883)
Non-controlling interests from Smiles		359,025	252,745	169,643
Basic earnings (loss) per share
Per common share	13	0.002	0.070	(0.422)
Per preferred share	13	0.055	2.455	(14.764)
Diluted earnings (loss) per share
Per common share	13	0.002	0.070	(0.422)
Per preferred share	13	0.055	2.450	(14.764)

The accompanying notes are an integral part of these consolidated financial statements.

F - 5

Gol Linhas Aéreas Inteligentes S.A.

Consolidated statements of comprehensive income (loss)

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$)

	Note	12/31/2017	12/31/2016	12/31/2015
Net income (loss) for the year		378,209	1,102,364	(4,291,240)
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods	27
Cash flow hedge		67,913	123,889	(60,949)
Tax effect		-	(92,179)	20,723
Total		67,913	31,710	(40,226)
Total comprehensive income (loss) for the year		446,122	1,134,074	(4,331,466)
Comprehensive income (loss) for the year attributable to:
Equity holders of the parent		87,097	881,329	(4,501,109)
Non-controlling interests from Smiles		359,025	252,745	169,643

The accompanying notes are an integral part of these consolidated financial statements.

F - 6

Gol Linhas Aéreas Inteligentes S.A.

Consolidated statements of changes in equity

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$)

						Capital reserves
	Note	Capital stock	Advance for future capital increase	Share issuance costs	Treasury shares	Goodwil  on transfer of shares	Special goodwill reserve of subsidiary	Unrealized hedge gains (losses)	Share- based payments	Gains on change in investment	Accumulated losses	Total attributable to equity holders of the parent	Smiles’ non- controlling interests	Total
Balances as of December 31, 2014		2,618,748	51	(150,214)	(31,357)	32,387	70,979	(138,713)	93,763	687,163	(3,701,194)	(518,387)	185,413	(332,974)
Other comprehensive income (loss), net		-	-	-	-	-	-	(40,226)	-	-	-	(40,226)	-	(40,226)
Net loss for the year		-	-	-	-	-	-	-	-	-	(4,460,883)	(4,460,883)	169,643	(4,291,240)
Stock options exercised		89	(51)	-	-	-	-	-	-	-	-	38	3,737	3,775
Capital increase		461,273	-	-	-	-	-	-	-	-	-	461,273	-	461,273
Share issuance costs		-	-	(5,009)	-	-	-	-	-	-	-	(5,009)	-	(5,009)
Share-based payments		-	-	-	-	-	-	-	13,516	-	-	13,516	836	14,352
Gains on change in investment		-	-	-	-	-	-	-	-	3,216	-	3,216	1,215	4,431
Restricted shares transferred		-	-	-	8,658	(4,505)	-	-	(4,153)	-	-	-	-	-
Interest attributable to shareholders’ equity		-	-	-	-	-	-	-	-	-	-	-	(17,566)	(17,566)
Dividends declared		-	-	-	-	-	-	-	-	-	-	-	(119,256)	(119,256)
Balances as of December 31, 2015		3,080,110	-	(155,223)	(22,699)	27,882	70,979	(178,939)	103,126	690,379	(8,162,077)	(4,546,462)	224,022	(4,322,440)
Other comprehensive income, net		-	-	-	-	-	-	31,710	-	-	-	31,710	-	31,710
Stock option exercised		-	-	-	-	-	-	-	-	-	-	-	3,507	3,507
Share issuance costs		-	-	(395)	-	-	-	-	-	-	-	(395)	-	(395)
Share-based payments		-	-	-	-	-	-	-	12,658	-	-	12,658	413	13,071
Gains on change in investment		-	-	-	-	-	-	-	-	2,872	-	2,872	313	3,185
Net income for the year		-	-	-	-	-	-	-	-	-	849,619	849,619	252,745	1,102,364
Restricted shares transferred		-	-	-	9,328	(7,462)	-	-	(1,866)	-	-	-	-	-
Interest attributable to shareholders’ equity		-	-	-	-	-	-	-	-	-	-	-	(10,422)	(10,422)
Dividends declared		-	-	-	-	-	-	-	-	-	-	-	(177,331)	(177,331)
Balances as of December 31, 2016		3,080,110	-	(155,618)	(13,371)	20,420	70,979	(147,229)	113,918	693,251	(7,312,458)	(3,649,998)	293,247	(3,356,751)
Other comprehensive income, net		-	-	-	-	-	-	67,913	-	-	-	67,913	-	67,913
Stock options exercised		2,692	-	-	-	-	-	-	-	-	-	2,692	-	2,692
Capital increase from exercise of stock option in subsidiary		-	-	-	-	-	-	-	-	-	-	-	1,988	1,988
Share issuance costs		-	-	-	-	-	-	-	-	-	-	-	(523)	(523)
Share-based payments	11	-	-	-	-	-	-	-	11,956	-	-	11,956	192	12,148
Gains on change in investment		-	-	-	-	-	-	-	-	3,994	-	3,994	-	3,994
Sale of interest in subsidiary	12	-	-	-	-	-	-	-	-	63,300	-	63,300	4,865	68,165
Restricted shares transferred		-	-	-	9,203	(2,637)	-	-	(6,566)	-	-	-	-	-
Net income for the year		-	-	-	-	-	-	-	-	-	19,184	19,184	359,025	378,209
Interest attributable to shareholders’ equity declared by Smiles		-	-	-	-	-	-	-	-	-	-	-	(14,071)	(14,071)
Minimum dividends declared by Smiles		-	-	-	-	-	-	-	-	-	-	-	(46,931)	(46,931)
Additional dividends distributed by Smiles		-	-	-	-	-	-	-	-	-	-	-	(185,779)	(185,779)
Balances as of December 31, 2017		3,082,802	-	(155,618)	(4,168)	17,783	70,979	(79,316)	119,308	760,545	(7,293,274)	(3,480,959)	412,013	(3,068,946)

The accompanying notes are an integral part of these consolidated financial statements.

F - 7

Gol Linhas Aéreas Inteligentes S.A.

Statements of cash flows

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$)

	12/31/2017	12/31/2016	12/31/2015
Operating activities
Net income (loss) for the year	378,209	1,102,364	(4,291,240)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	505,425	447,668	419,691
Allowance for doubtful accounts	24,913	9,806	39,287
Provisions for legal proceedings	158,263	189,244	44,460
Provisions (reversals) for inventory obsolescence	3,059	-	(414)
Deferred taxes	(547,059)	1,114	648,000
Equity results	(544)	1,280	3,941
Share-based payments	14,849	13,524	14,352
Exchange and monetary variations, net	95,132	(1,149,616)	1,723,441
Interest on debt and finance lease	566,902	682,188	600,410
Unrealized hedge results	8.639	82,990	18,475
Provision for profit sharing	65,573	56,238	10,633
Write-off of property, plant and equipment and intangible assets	145,855	181,308	25,069
Write-off of goodwill on investment in associate	15,184	-	-
Losses from capital increase in associate	-	1,368	-
Other	-	16,232	-
Gain on redemption of debt	-	(286,799)	-
	1,434,400	1,348,909	(743,895)
Changes in assets and liabilities:
Trade receivables	(198,370)	(307,574)	(149,623)
Short-term investments	(353,231)	83,062	309,749
Inventories	1,038	16,648	(60,140)
Deposits	46,388	(323,641)	21,077
Suppliers	(202,462)	204,184	210,474
Suppliers - Forfaiting	76,157	-	-
Advance ticket sales	270,994	(20,710)	105,044
Mileage program	(47,714)	9,374	211,940
Advances from customers	4,895	3,364	10,263
Salaries	(43,641)	(23,351)	(15,438)
Landing fees	126,085	(74,090)	(1,492)
Taxes obligation	460,980	257,464	233,930
Derivatives	(32.310)	(13,384)	(6,267)
Provisions	(270,970)	(253,643)	(61,386)
Operating leases	131,877	(158,994)	166,227
Other assets (liabilities)	18,157	64,220	(67,602)
Interest paid	(528,398)	(606,405)	(548,773)
Income taxes paid	(221,122)	(226,500)	(213,555)
Net cash flows from (used in) operating activities	672,753	(21,067)	(599,467)
Investing activities
Sale of interest in subsidiary	68,163	-	-
Short-term investments of Smiles	(171,174)	(45,651)	(254,416)
Restricted cash	(100,835)	542,107	(403,854)
Capital increase in associate	-	(3,439)	-
Advances for property, plant and equipment acquisition, net	68,679	536,444	(167,646)
Property, plant and equipment	(370,438)	(409,709)	(391,731)
Intangible assets	(55,449)	(29,656)	(42,812)
Dividends received from associate	1,249	1,993	1,302
Net cash flows (used in) from investing activities	(559,805)	592,089	(1,259,157)

F - 8

Gol Linhas Aéreas Inteligentes S.A.

Statements of cash flows

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$)

	2017	2016	2015
Financing activities
Loan funding	1,898,738	-	2,510,521
Debt issuance and exchange offer costs	(65,628)	(27,249)	(41,990)
Loan payments	(274,480)	(520,519)	(1,632,039)
Early payment of Senior Notes	(707,142)	-	-
Finance lease payments	(239,092)	(342,791)	(409,519)
Dividends and interest attributable to shareholders’ equity paid to non-controlling interests of Smiles	(254,892)	(171,829)	(136,822)
Capital increase	2,692	-	465,048
Share issuance costs	(523)	(395)	(5,009)
Net cash flows from (used in) financing activities	359,673	(1,062,783)	750,190
Foreign exchange variation on cash held in foreign currencies	(7,966)	(18,364)	281,993
Net increase (decrease) in cash and cash equivalents	464,655	(510,125)	(826,441)
Cash and cash equivalents at beginning of the year	562,207	1,072,332	1,898,773
Cash and cash equivalents at end of the year	1,026,862	562,207	1,072,332
Statements of cash flows – Additional information
Non-cash transactions
Interest on shareholders’ equity and dividends, net of taxes	(49,602)	-	-
Deposits in guarantee for lease agreements	10,307	-	-
Write-off of finance lease agreements	(15,334)	-	-
Renegotiation of finance lease agreements	-	549,144	145,487
Provision for aircraft return	-	97,423	259,673
Software acquisition	-	25,660	-
Engine maintenance financing	529,775	201,170	-
Property, plant and equipment acquisition through Finimp	63,066	-	107,592

The accompanying notes are an integral part of these consolidated financial statements.

F - 9

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

1.General information

Gol Linhas Aéreas Inteligentes S.A. (the “Company” or “GLAI”) is a publicly-listed company incorporated on March 12, 2004, under the Brazilian Corporate Law. The Company is a holding company of the following main subsidiaries: (i) Gol Linhas Aéreas S.A. (“GLA”, formerly “VRG Linhas Aéreas S.A.”), which is mainly engaged in (a) the regular and non-regular flight transportation services of passengers, cargo and mailbags, domestically or internationally, according to the concessions granted by the regulator; and (b) other activities in relation to flight transport services provided in its by-laws; and (ii) Smiles Fidelidade S.A. (“Smiles Fidelidade”, formerly Webjet Participações S.A. prior to the change in the corporate name on July 1, 2017), which mainly operates (a) the development and management of its own or third party’s customer loyalty program, and (b) sale of redemption rights of awards related to the loyalty program.

Additionally, the Company is the direct parent company of the wholly-owned subsidiaries GAC Inc. (“GAC”), Gol Finance Inc., Gol Finance, formerly Gol LuxCo S.A. (“Gol Finance”), Gol Dominicana Lineas Aereas SAS (“Gol Dominicana”), and indirect parent company of Smiles Viagens e Turismo S.A. (“Smiles Viagens”).

The Company’s corporate address is located at Praça Comandante Linneu Gomes, s/n, concierge 3, building 24, Jardim Aeroporto, São Paulo, Brazil.

The Company’s shares are traded on the B3 S.A. - Brasil, Bolsa, Balcão (“B3”) and on the New York Stock Exchange (“NYSE”). The Company adopted Level 2 Differentiated Corporate Governance Practices from the B3 and is included in the Special Corporate Governance Stock Index (“IGC”) and the Special Tag Along Stock Index (“ITAG”), which were created for companies committed to apply differentiated corporate governance practices.

GLA is highly sensitive to the economy and also to the U.S. dollar, as approximately 50% of its costs are denominated in U.S. dollar. To overcome the challenges faced throughout 2016, the Company implemented a plan to improve its liquidity and its operating margin. As a result, the Company has been improving its liquidity and ability to respond effectively to the adverse events caused by the instability of the Brazilian economic scenario. The diligent work performed to adjust the fleet size to the economy growth and match seat supply to demand are some of the ongoing initiatives implemented to maintain a high load factor. The Company will continue to maintain a solid strategy of liquidity initiatives, such as the adjustment of the route network, initiatives to reduce costs and the adjustment of its capital structure.

Moving forward with its liquidity plan, at the end of December 2017, the Company implemented several initiatives to restructure its debt, reducing the financial cost of its debt. The offering of Senior Notes on December 11, 2017 raised US$500 million, at lower rates, was partially used to amortize the Company’s most onerous debt and will significantly reduce the financial cost as from 2018. Other initiatives are scheduled for 2018, reinforcing the Company’s commitment to reducing the financial cost in order to promote and solidify its liquidity strategy.

Even in a scenario with an outlook for improvement, the Company is subject to uncertainties in the Brazilian economy and political scenario that may directly impact the effectiveness of the expected results.

Management understands that the business plan prepared, presented and approved by the Board of Directors on January 11, 2018, shows strong elements to continue as going concern.

On July 1, 2017, due to change in the organizational structure, and to generate tax savings from the use of tax losses carryforward, the Company approved a corporate restructuring through the merger of Smiles S.A. and Smiles Fidelidade S.A.. As a result of the merger, Smiles S.A. was dissolved and all its assets, rights and obligations were transferred to Smiles Fidelidade S.A., pursuant to articles 224, 225, 227 and 264 of the Brazilian Corporate Law.

Irregular Payments Investigation

In 2016, the Company received inquiries from Brazilian tax authorities regarding certain payments to firms that turned out to be owned by politically exposed persons in Brazil. Following an internal investigation, the Company engaged U.S. and Brazilian legal counsel to conduct an external independent investigation to ascertain the facts with regard to these and any other payments identified as irregular

F - 10

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

and to evaluate the adequacy and effectiveness of the Company’s internal control and compliance programs in light of the findings of the investigation.

In December 2016, the Company entered into a leniency agreement with the Brazilian Federal Public Ministry (the “Leniency Agreement”), under which the Company agreed to pay R$12.0 million in fines and to make improvements to its compliance program. In turn, the Federal Public Ministry agreed not to bring any criminal or civil suits related to activities that are the subject of the Leniency Agreement and that may be characterized as (i) acts of administrative impropriety and related acts involving politically exposed persons or (ii) other possible actions, which at the date of the Leniency Agreement had not been identified by the ongoing investigation (any such actions possibly resulting in an increase in the fines under the Leniency Agreement). In addition, the Company paid R$4.2 million in fines to the Brazilian tax authorities related to the above-mentioned payments. The Company voluntarily informed the U.S. Department of Justice, the SEC and the CVM of the external independent investigation and the Leniency Agreement.

The external independent investigation was concluded in April 2017. It revealed that certain additional irregular payments were made to politically exposed persons. None of the amounts paid were material (individually or in the aggregate) in terms of cash flow, and none of our current employees, representatives or members of the board or Management knew of any illegal purpose behind any of the identified transactions or knew of any illicit benefit to the Company arising out of the transactions investigated. The Company reported the conclusions of the investigation to the relevant authorities and will maintain them informed of any developments, as well as collaborate with them in their analysis. These authorities may impose fines and possibly other sanctions on the Company.

The Company continue to take steps to strengthen and expand its internal control and compliance programs. Among other measures, the Company are monitoring its transactions with politically exposed persons, and enhanced its procurement procedures, including the contracting and execution of services by outside providers. The Company have hired specialists to assess risks and review internal controls related to fraud and corruption to identify and help us implement further improvements, and the Company will continue to hire specialists to implement any necessary improvements, as well as systems to monitor its transactions and train its employees.

2.Approval and summary of significant accounting policies applied in preparing the financial statements

The consolidated financial statements were amended in relation to those issued on April 30, 2018 to present additional information (i) on Note 13 to present the total net income (loss) for the year attributable to equity holders of the parent and additional disclosure to clarify that the Company’s preferred shares carry economic rights, including dividend rights, 35 times those of common shares; and (ii) to replace the misidentified term “gross profit” to “total net revenue” in the tables presenting net revenue by segment in Note 25.2.

The Company’s consolidated financial statements were authorized for issue by Management on May 30, 2018.

2.1.Compliance statement

The consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

2.2.Basis of preparation

These financial statements were prepared based on historical cost, except for certain financial assets and liabilities that are measured at fair value and investments measured using the equity method.

The Company's consolidated financial statements as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 were prepared based on the going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business.

Except for Gol Dominicana, which functional currency is U.S. dollar, the Company and its subsidiaries functional currency is the Brazilian Real. The presentation currency of these consolidated financial statements is the Brazilian Real.

Certain comparative amounts were reclassified to conform to the current year presentation.

F - 11

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Basis of consolidation

The consolidated financial statements comprise Gol Linhas Aéreas Inteligentes S.A., its subsidiaries, jointly controlled and associate, as follows:

Entity	Date of constitution	Location	Operational activity	Type of control	% equity interest
					12/31/2017	12/31/2016
Extensions:
GAC	03/23/2006	Cayman Islands	Aircraft acquisition	Direct	100.0	100.0
Gol Finance Inc.	03/16/2006	Cayman Islands	Financial funding	Direct	100.0	100.0
Gol Finance	06/21/2013	Luxembourg	Financial funding	Direct	100.0	100.0
Subsidiaries:
GLA	04/09/2007	Brazil	Flight transportation	Direct	100.0	100.0
Smiles Fidelidade	08/01/2011	Brazil	Loyalty program	Direct	52.7	53.8
Smiles Viagens (*)	08/10/2017	Brazil	Travel agency	Indirect	100.0	-
Gol Dominicana	02/28/2013	Dominican Republic	Non-operational	Direct	100.0	100.0
Jointly controlled:
SCP Trip	04/27/2012	Brazil	Flight magazine	Indirect	60.0	60.0
Associate:
Netpoints	11/08/2013	Brazil	Loyalty program	Indirect	25.4	25.4

 (*) The entity is a start up.

The accounting policies were applied consistently in all the consolidated entities and are consistent with those used in previous years. All the transactions, balances, income and expenses between the consolidated entities are fully eliminated in the consolidated financial statements.

The summary of significant accounting policies adopted by the Company is as follows:

a)Cash and cash equivalents

Cash and cash equivalents include bank deposits and short-term investments with maturities of three months or less (or with no restriction period for redemption) which have high liquidity and are readily convertible into a known amount of cash and have an insignificant risk of change in value.

b)Short-term investments

Short-term investments are represented by financial investments with first-tier financial institutions and include exclusive investment funds.

c)Restricted cash

Restrict cash comprises mainly deposits in guarantee and linked to securities, and short and long term debt.

F - 12

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

d)Trade receivables

Trade receivables are measured based on cost, less allowances for doubtful accounts, which approximate their fair value, due to their short-term nature. An allowance for doubtful accounts is recorded when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivable through risk analysis and taking into account the historical analysis of the recovery of arrears. The allowance for doubtful receivables is the difference between the original book value and amount considered recoverable. Provision is made for all accounts overdue for more than 90 days for installment sales, travel and cargo agencies, and 180 days in respect of airline partners. Additionally, in some cases, the Company performs an individual analysis of overdue balances.

e)Inventories

Inventories are comprised primarily of maintenance and spare parts and materials, and are stated at the lower of cost and net realizable value. The cost of inventories is determined using the average cost method and includes expenses incurred in their acquisition and transportation to their current location. The provision for inventory obsolescence is recorded when losses are probable.

f)Financial assets and liabilities

Financial assets

After initial recognition, these are measured in each balance sheet with the pre¬defined classification, based on the purposes for which they were acquired or issued, as described below:

i.

Loans and receivables: with fixed or determinable payments that are not quoted in an active market which are measured at amortized cost after initial recognition under the effective interest method. Interest, inflation adjustment, foreign exchange changes, less impairment losses, when applicable, are recognized in profit or loss under financial income or financial expenses, when earned or incurred. The Company has mainly bank deposits and trade receivables classified under this category.

ii.

Financial assets at fair value through profit or loss: include financial assets held for trading (i.e., acquired primarily for the purpose of sale in the short term) and financial assets designated upon initial recognition at fair value through profit or loss. Interest, inflation adjustment, foreign exchange changes and changes arising from the adjustment to fair value are recognized in profit or loss under financial income or financial expenses, when earned or incurred. The Company has cash equivalents, short-term investments and restricted cash classified under this category.

Financial liabilities

i.

Financial liabilities at fair value through profit or loss: include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss, except those designated as hedge instruments. They are remeasured at fair value at every balance sheet date. Interest, inflation adjustment, foreign exchange changes and changes arising from measurement at fair value, when applicable, are recognized in the profit or loss when incurred. The Company classifies under this category derivatives not designated as hedging instruments.

ii.

Loans and borrowings: financial liabilities that are not regularly traded before maturity. After initial recognition, they are remeasured at amortized cost using the effective interest method. Interest, inflation adjustment and foreign exchange changes, if applicable, are recognized in profit or loss when incurred. The Company recognized under this category current and noncurrent short and long term debt (including finance leases) and trade accounts payable.

F - 13

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Derivatives: Changes on aircraft fuel, interest rate and foreign expose the Company and its subsidiaries to risks that may affect its financial performance. In order to mitigate these risks, the Company uses financial instruments that may or may not be designated as hedge accounting, and, if designated, are classified as cash flow hedges or fair value hedges.

·Not designated as hedge accounting: the Company may use derivative financial instruments as not designated as hedge accounting when the objectives of the risk Management do not require such classification. The non¬designated operations have movements in fair value directly recognized in financial results.

·Designated as cash flow hedge: hedge the income or expenses from the fluctuations on exchange rates. The effectiveness is based on statistical correlation methods and the ratio between gains and losses on the financial instruments used as hedge, and the cost and expense fluctuation of the hedged items. The instruments are considered as effective when the fluctuation in the value of derivatives offsets between 80% and 125% the impact of the price fluctuation on the cost or expense of the hedged item. The balance of the actual fluctuations in the fair values of the derivatives are classified in equity (under “Other comprehensive income (loss”) and the ineffective gains or losses are recognized in profit or loss (under “Financial results”), until the revenue recognition or hedged expense under the same item of profit or loss in which the item is recognized.

Derecognition: the Company writes off a financial asset only when the contractual rights to the cash flows from the asset expire, or transfers the asset and substantially all the risks and benefits of ownership to a third party. If the Company does not transfer nor retains substantially all the risks and benefits of ownership of the financial asset, but continues to control the transferred asset, the Company recognizes the participation retained and its liabilities on the values that it will have to pay. If the Company retains substantially all the risks and benefits of ownership of the financial asset transferred, the Company continues recognizing this asset. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss.

Hedge accounting is discontinued prospectively when the Company (i) cancel the hedge operation (ii) the derivative matures or is sold, terminated, or exercised, or (iii) when no longer qualifies as hedge accounting. If the operation is discontinued, any gains or losses previously registered and accumulated in equity in “Other comprehensive income (loss)” until that date are registered on statement of operations as the operation is registered. When the Company expects that the hedge operation will no longer occur, the accumulated and deferred gains or losses in equity are immediately recorded in profit or loss, under the same line that it was initially recorded.

Offsetting of financial instruments: financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

g)Deposits

Aircraft and engine maintenance deposits: refer to payments made in U.S. dollars by the Company to commercial lease companies to be used in future aircraft and engine maintenance work. The realization of these assets occurs substantially by utilization of the deposits to pay the maintenance services and the receipts of funds, according to the negotiations with the lessors. The exchange rate variations arising from payments, net of uses for maintenance, are recognized as an expense or revenue in the financial results. Management performs regular reviews of the recovery of maintenance deposits based on future maintenance events, and believes that the amounts recorded in the consolidated financial position are recoverable.

F - 14

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Certain lease agreements establish that if a maintenance event does not occur, the deposits are not refundable. Any excess amounts retained by the lessor upon termination of the lease agreement are recognized in profit or loss, under “maintenance, materials and repairs”.

Additionally, the Company maintains agreements with some lessors under which the deposits have been replaced by letters of credit, which can be executed by the lessor if the aircraft maintenance is not performed as scheduled. Many of the aircraft lease agreements do not require maintenance deposits and are guaranteed with letters of credit. As of December 31, 2017, no letter of credit has been executed.

Deposits in guarantee and collaterals for lease agreements: the deposits in guarantee and collaterals are denominated in U.S. dollars, and are adjusted on a monthly basis for foreign exchange fluctuations, they do not bear interest and are reimbursable to the Company upon termination of the agreements.

h)Leases and sale-leaseback transactions

In accordance with IAS 17 "Leases", leases are classified as finance leases when the lease arrangement transfers substantially all the risks and rewards of ownership to the lessee, or meet the following conditions:

i.          the lease transfers ownership of the asset to the lessee at the end of the lease agreement;

ii.         the lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than fair value at the date the option becomes exercisable such that, at the inception of the lease, is reasonably certain that the option will be exercised;

iii.        the lease term is the most part of the economic asset life, even if the title is not transferred;

iv.        at the beginning of the lease, the present value of minimum lease payments represents substantially all the fair value of the leased asset;

v.         the leased assets are of such a specialized nature such that only the lessee can use them without major modifications.

The difference between the present value and the total amount of falling due installments is charged to profit or loss as financial expenses. The corresponding obligation to the lessor is accounted for as short and long term debt. The aircraft held under finance leases, which have a purchase option at the end of the contract, are depreciated on a straight¬line basis over the useful life at rates calculated to write down the cost to the estimated residual value of 20% based on market price valuations. All other aircraft recorded in property, plant and equipment, when there is no reasonable certainty that the Company will obtain ownership of the property at the end of the contractual term, are depreciated over the shorter of the useful life of the assets and the lease agreement. The other leases are classified as operating leases and are recognized as an expense in profit or loss on a straight¬line basis over the term of the lease agreement.

Lease payments under operating leases are recognized as an expense on a straight-line basis over the lease term in “Aircraft leases”. Future payments are not recognized in the financial statements but are future commitments undertaken are presented on Note 26.

Gains or losses related to sale-leaseback transactions classified as an operating lease after the rights sale are accounted as follows:

·Immediately recorded in profit or loss when it is clear that the transaction is established at fair value;

·If the sale price is below fair value, any profit or loss is immediately recognized as other (expense) income, however if the loss is compensated by future lease payments at below or above market price (the gains or losses are deferred and amortized in proportion to the lease payments during the period that the assets will be used);

·In the event of the sale price being higher than the fair value of the asset, the value exceeding the fair value is deferred and amortized during the period when the asset is expected to be used. The amortization of the gain is recorded as a reduction in lease expenses.

F - 15

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

The amount of deferred losses is recorded as other current or noncurrent assets, and the amount of deferred gains is recorded as other liabilities. The breakdown between short and long-term is based on the lease terms.

If the sale-leaseback transactions results in finance lease, any excess proceeds over the carrying amount shall be deferred and amortized over the lease term. The Company did not enter into any sale-leaseback transaction that resulted in a finance lease during the years ended December 31, 2017, 2016 and 2015.

i)Property, plant and equipment

Property, plant and equipment, including rotable parts, are recorded at acquisition or construction costs, including interest and other financial charges. Each component of property, plant and equipment that has a cost that is significant in relation to the overall cost of the item is depreciated separately. The estimated useful life for property and equipment, for depreciation purposes, is disclosed in Note 14.

The estimated market value at the end of its useful life is a premise for measuring the residual value of the Company’s property, plant and equipment. Except for aircraft with purchase option at the end of the agreements, the other items have no residual value. The residual value and the useful life of assets are reviewed annually and adjusted, if necessary.

The carrying amount of the property, plant and equipment is analyzed in order to verify possible impairment losses when events or changes in circumstances indicate that the book amount is higher than the estimated recoverable amount.

A write-off of a property, plant and equipment item occurs after disposal or when there is no future economic benefits resulting from continued use of the asset. Any gains or losses on property, plant and equipment sales or write-offs are determined by the difference between the values received in the sale and the asset's book value, and are recognized in the statement of operations.

Additionally, the Company adopts the following treatment for the items below:

Advances for aircraft acquisition: refer to prepayments made based on the agreements entered into with Boeing for the purchase of Boeing 737-800 Next Generation and 737- MAX aircraft. The advances are recorded by historical exchange rate at the conversion date.

Lease agreements: assets held through finance leases, when the risks and rewards are transferred to the Company, the asset is registered on the balance sheet. At the beginning of the lease agreement, the Company registers the finance lease as asset and the liability at fair value, or, if lower, the present value of the minimum lease payments.

The leased asset is depreciated over the useful life of the asset. However, when it is uncertain that ownership will be transferred to the Company at the end of the lease agreement, the asset is depreciated over its expected useful life or the contractual lease term period, which ever is shorter.

Other engine and aircraft leases are classified as operating leases and lease expense on a straight-line basis on the statement of operations.

Aircraft and engine redelivery expenses: the Company records a provision for future costs to be incurred upon the aircraft return. Such provision is determined based on the the estimated costs to be incurred upon redelivery and the contractual requirements of operating lease agreements as described in Note 14. After initial recognition, the corresponding asset is depreciated on a straight line basis over the terms of the contract.

Capitalization of major engine, aircraft and APU (Auxiliary Power Unit) maintenance expenses: costs on major maintenance (including replacement and labor parts) are capitalized only when there is an extension of the estimated useful life of the aircraft or the engine. Such costs are capitalized and depreciated until the next major maintenance. Incurred costs that do not extend the useful life of the aircraft, the engine or APU’s, or related to other components of the aircraft are recognized directly in profit or loss.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

j)Intangible assets

Intangible assets are non-monetary assets without physical properties, which carrying amount of intangible assets with indefinite life is tested for impairment annually or when strong evidence of changes in circumstances indicates that the carrying amount may not be recoverable.

Goodwill: goodwill is annually tested for impairment by comparing the carrying amount of the cash-generating units (GLA and Smiles Fidelidade) with its recoverable amount. Management exercises considerable judgment to assess the impact of operating and macroeconomic changes in order to estimate the future cash flows and measure the recoverable amount of that asset.

Airport operating rights: airport operating rights were acquired as part of the acquisition of GLA and of Webjet (formerly named Webjet Linhas Aéreas S.A.), and were recognized at fair value at the acquisition date and are not amortized. Those rights are considered to have an indefinite useful life due to several factors and considerations, including requirements and necessary permits to operate within Brazil and limited slot availability in the most important airports in terms of traffic volume. The carrying value of these rights is evaluated annually as to its recoverable amount or in case of changes in circumstances indicates that carrying values may not be recoverable. No impairment has been recorded until as of the balance sheet date.

Software: The costs related to the acquisition or development of computer software that is separable from an item of related hardware is capitalized separately and amortized over a period on a straight-line basis in accordance with the software agreement.

k)Income taxes

The income tax and social contribution expenses are represented by the sum of current and deferred income taxes.

Current income taxes: the provision for income tax and social contribution is based on the taxable income. The provisions for income and social contribution taxes are calculated for each company on a stand alone basis using statutory rates in effect at the end of the year.

Deferred income taxes: deferred income taxes are recognized on temporary differences and net operating losses carryforward at the end of the reporting date between the balances of assets and liabilities recorded in the financial statements and their tax basis used in calculation of taxable income.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that is not probable that sufficient taxable income will be incurred to allow all or part of the deferred tax asset to be realized.

Deferred tax related to items recognized directly in equity is also recognized in equity. Deferred tax items are recognized in accordance with the transaction that gave rise to the deferred tax, in other comprehensive income (loss) or directly in equity. Deferred tax assets are recognized only if they are expected to be realized.

Net operating losses carryforward are recorded based on the expected future taxable income for each company, in accordance with legal limitations.

The calculation of the expected future taxable income is based on the business plan, and are annually reviewed and approved by the Company’s Board of Directors.

l)Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Provision for aircraft return: for aircraft operating leases, the Company is contractually required to return the equipment in a predefined level of operational capability. In these cases, the Company accrues the cost of returning, since these are present obligations arising from past events that will generate future disbursements, whose measurement is made with reasonable assurance. These costs are primarily related to expenses of aircraft reconfiguration (interior and exterior), obtaining licenses and certifications techniques, painting, etc. according to return agreement clauses. The estimated cost is initially recorded at present value and the consideration of the provision for aircraft return is made under "Aircraft reconfigurations/overhauling" of property, plant and equipment (see Note 14). After initial recognition, the asset is depreciated on a straight-line basis and liabilities updated according to the discount rate estimated by the Company with the result shown in financial result. Any changes in the estimated costs to be incurred are recorded prospectively.

Provision for engine return: the provision is estimated based on the minimum contractual conditions that the equipment must have when returned to the lessor, considering the historical costs incurred and the conditions of the equipment at the time of evaluation. These provisions are recorded in profit or loss from the time that the minimum contract requirements are reached and the next maintenance is scheduled for a date later than the date set for the return of the engine. The Company estimated the provision for engine return in accordance with the expenditure that is intended be incurred, and, when the effect of the money value over time is considerate relevant, the provision amount will be the present value of the expenses that are expected to settle the obligation. The agreement maturity will be based on the date that the return of aircraft leased is expected, i.e., or the lease term.

Provision for legal proceedings: Provisions are recorded for all the lawsuits that represent probable loss according to its individual assessment, considering the estimated financial outflow. If the Company expects that some or all of the provision to be reimbursed, the reimbursement is recorded as a separate asset. The expense related to any provision is presented in the statement of operations, net of any reimbursement.

m)Revenue recognition

The passenger revenue is recognized when air transportation services are actually provided to the passenger. Tickets sold but not yet used are recognized as advance ticket sales and correspond to deferred revenue from tickets sold to be transported in a future date, net of tickets that will expire in accordance with the Company’s expectations (breakage). Breakage consists of the statistical calculation, on a historical basis, of unused, expired tickets, i.e., passengers to be transported that have a high probability of not flying. The Company periodically records adjusted deferred revenues based on tickets which have actually expired.

Revenues from cargo shipment are recognized when transportation is provided. Other revenues include charter services, onboard sales services, tickets exchange rates, and other additional services, and are recognized when the service is provided.

n)Deferred revenue

The "Smiles Loyalty Program" is designed to retain its customers through the grant of mile credits to its participants. The obligation created by the issuance of miles is measured based on the price that the miles were sold to its airline and non-airline partners, classified by the Company as the fair value of the transaction. The revenue recognition occurs when the miles are redeemed by the Smiles Program participants to exchange the rewards with its partners.

In the consolidated financial statements, the revenue due to exchange of miles from the program and the flight tickets sales is only recognized when the flight transportation is provided.

o)Share-based payments

Stock options: the fair value of stock options granted to executives is estimated at the grant date using the Black-Scholes pricing model and the expense is recognized in profit or loss during the period that the right is acquired (vesting period), based on estimates which granted shares will be acquired, with a corresponding entry in equity.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Restricted shares: the transfer of restricted shares to its beneficiaries is made at the end of three years from the grant date, provided that the recipient has maintained its employment during that period. This transfer takes place through treasury shares, whose value per share is determined by the market price on the date of transfer to the beneficiary. Gains related to differences in the fair value of the share at the grant date and the value on the date of transfer of restricted shares are recorded in equity in capital reserves under "Goodwill on transfer of shares".

The impact of the review of the amounts of the restricted shares or shares to be acquired in comparison with the original estimates, if any, is recognized in profit or loss, such as the cumulative expense reflects the revised estimate, with a corresponding adjustment in equity.

p)Segment information

The Company has two reportable segments, as described below:

Flight transportation: the operations are derived from GLA and consist of air transportation services and the major assets that contribute to the generation of revenues are its aircraft. Other revenues primarily arise from cargo, excess baggage charges and cancellation fares, all directly attributable to flight transportation services.

Smiles loyalty program: the operations in this segment are represented by miles sales transactions to airline and non-airline partners. Under this context, the program management, marketing and rights of redemption of prizes and creating and managing the database of individuals and corporations.

q)Foreign currency transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the time that the transaction occurs. Monetary assets and liabilities denominated in foreign currencies are subsequently calculated based on the conversion using the exchange rate at the balance sheet date and differences resulting from the currency calculated based on conversion are recognized in profit or loss in financial results under “Exchange rate variation, net”.

r)Main accounting estimates and assumptions adopted

The process of preparing these financial statements often requires that Management adopts assumptions, judgments and estimates that may affect the application of the policies and amounts of assets and liabilities, revenues and expenses. The actual results may differ from the adopted estimates, since such use historical experience and some assumptions that are believed to be appropriate under the circumstances. The reviews of accounting estimates are recognized in the same period in which the assumptions are reviewed and the effects are recognized on a prospective basis.

The estimates and assumptions that have a significant risk of material adjustments on the amounts of assets and liabilities are discussed below:

Impairment of financial assets: the Company estimates any impairment losses at every balance sheet date, or when there are evidences that the carrying amounts may not be recoverable. Problems in repatriation or usage of financial assets in other countries are indicative for impairment tests.

Impairment of non-financial assets: the Company assesses if there are indications of impairment for all non-financial assets at the balance sheet date, or when there is evidence that the carrying amount may not be recoverable. The recoverable values of the cash-generating unit were determined using its value-in-use. The value-in-use is determined based on the assumption of discounted cash flows.

Income taxes: The Company believes that the tax positions taken are reasonable. However, it recognizes that the authorities may question the positions taken which may result in additional liabilities for taxes and interest. The Company recognizes provisions that involve considerable judgment of the management. The provisions are reviewed and adjusted to account for changes in circumstances, such as lapsing of applicable statutes of limitations, conclusions of tax authorities, additional exposures based on identification of new issues or

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

court decisions affecting a particular tax issue. Actual results can differ from estimates.

Breakage: As part of the process of revenue recognition, flight tickets issued that will not be used and miles issued that will not be redeemed are estimated and recognized as revenue at the moment of the sale and issuance, respectively. These estimates, referred to as breakage, are reviewed annually and are based on historical data of expired flight tickets and expired miles.

Allowance for doubtful accounts: the allowance for doubtful accounts is recorded in the amount considered sufficient by the management in order to cover possible losses on trade receivables arising from receivables, considering the risks involved. The Company periodically evaluates its receivables and, based on historical data, combined with risk analysis per customer, registers the allowance for losses.

Provision for legal proceedings: provisions are recorded for all lawsuits that represent probable losses, according to the loss probability, which includes the assessment of available evidence, including the legal consultants’ opinion, internal and external, the proceedings nature and past experiences. Additionally, the provisions are periodically reviewed and the management believes that the provisions recorded are sufficient, based on the probability of loss. However, significant changes in judicial decisions can have significant impacts on the Company’s financial statements.

Provision for aircraft return: the Company estimates the provision for aircraft returns considering the costs in accordance with returns conditions agreements as set out in the return conditions in the lease agreements.

Provision for engine return: the Company records the provision for engine return based on an estimate of the agreement obligation of each engine return and recorded in the statement of operations only in the period between the last maintenance and the date of return of the components.

Fair value measurement of financial instruments: when the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model. The inputs to these models are based on observable markets, when possible; however, when this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments.

2.3.New standards, amendments and interpretations

a)       Standards issued but not yet effective:

IFRS 9 – Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9 – “Financial Instruments”, that replaces IAS 39 – “Financial Instruments: Recognition and Measurement” and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing fully comparative information is not compulsory. The adoption of IFRS 9 will not affect the classification and measurement of the Company’s financial assets. One of the main impacts is the measurement of the allowance for doubtful accounts, which will be calculated based on expected credit losses instead of estimated losses. The Company expects a reduction of approximately 30% in estimated losses. Related to the effects on derivatives, the Company expects that the main changes from adoption of IFRS 9 will be related to the documentation of hedging strategy policies.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

IFRS 15 – Revenue from Contracts with Customers

IFRS15 - Revenue from Contracts with Customers was issued in May 2014 and amended in April 2016, and is effective for fiscal years beginning on or after January 1, 2018. IFRS15 presents revenue recognition principles based on a five-step model to be applied to all contracts with customers, in accordance with the entity’s performance requirements. The Company will  adopt the new standard on the date it becomes effective, as of January 1, 2018, using the full retrospective method. In 2017, the Company carried out an assessment of IFRS 15, which is subject to changes due to more detailed analyses that are still in progress. Among the main challenges for the adoption of IFRS 15, the Company believes that the recognition of the following revenues may change compared with the current accounting:

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

a) Passenger revenue arising from codeshare agreements: corresponds to agreements where two or more airlines get into an agreement to provide air transportation services. In transactions when the Company will act as principal, revenue will be recognized based on the gross value of the transaction (price of the ticket to the final customer), and in transactions when the Company will act as agent, revenue will be recognized based on the net value of the transaction (sale price less the amount payable to the other airline). The Company did not identify any impact of the change to this standard on revenue arising from codeshare agreements.

b) Ancillary revenue: comprises all revenue related to air transportation services, such as excess baggage, cancelation fees and refunds, as cancellations, no-show, among others. These revenues were assessed and will be classified as “related to the main service”, and will be recognized only when the air transportation service is incurred. In this regard, the Company concluded its assessment and estimated impacts of approximately R$14 million as a result of changes to the timing of recognition of revenues and approximately R$500 million from the reclassification of revenues from “Other revenue” to “Passenger revenue”.

c) Breakage revenue: comprises the expectation of mileage and tickets that are not likely to be used by the customer. To recognize these revenues, the Company uses analysis tools and statistical data that allow the estimate to be calculated with a reasonable level of certainty. Given the standard’s specific requirements regarding this, the Company concluded that its methodologies are in compliance with IFRS 15.

d) Mileage program: Presentation as agent: the main impact refers to the presentation of gross revenue with redemption of premiums net of their respective costs. Mileage valuation: there are no impacts resulting from the mileage valuation, since they are priced based on the sales value, considering that the Smiles Mileage Program operates independently. As a consequence, there is no change in the valuation of the tickets that are originated from the redemption of the mileage program.

IFRS 16 – Leases

IFRS 16 was issued in January 2016, and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Lease-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets the principles for recognition, measurement, presentation and disclosure of leases and require lessess to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. IFRS 16 is effective for annual periods beginning on or after January 1, 2019. IFRS 16 requires that, for the majority of leases, the lessor records an asset related to the right of use of the leased item, and a liability related to the lease. The Company has 88 aircraft leased as operational leases of the total of 119 aircraft, and the adoption of this standard will have a material impact on the Company, with the potential increase in the assets corresponding to the right of use of the leased item and liabilities related to the leases, which will be recorded in the statements of financial position as from the adoption date.

IFRIC 22 – Foreign Currency Transactions and Advance Consideration

IFRIC 22 clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a nonmonetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or nonmonetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration. IFRIC 22 is effective for annual periods beginning on or after January 1, 2018, and intended to eliminate diversity in practice, when recognising the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or nonmonetary liability relating to advance consideration received or paid in a foreign currency. The Company does not expect this interpretation to have significant impacts, as transactions with these characteristics already comply with this interpretation.

IFRIC 23 – Uncertainty over Income Tax Treatment

IFRIC 23 addresses the accounting for income taxes when tax treatments involve uncertainty that

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

affects the application of IAS 12 and does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. IFRIC 23 is effective for annual periods beginning on or after January 1, 2019, and the Company does not expect significant impacts from the adoption of this interpretation.

IFRS 2 – Classification and Measurement of Share-based Payment Transactions – Amendments to IFRS 2

The IASB iassued amendments to IFRS 2 – Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of an share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permited if elected for all three amendments and the other criteria are met. The amendments are effective for annual periods beginning on January 1, 2018, and early application is permitted. The Company does not expect significant impacts from the adoption of these amendments on its consolidated financial statements.

b) Annual improvements – Applicable to annual periods beginning on or after January 1, 2017:

Amendments to IFRS 12 – Disclosure of Interests in other Entities: Clarification of the scope of disclosure requirements in IFRS 12

The amendments clarify that the disclosure requirements in IFRS 12 apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. These amendments did not affect the Company’s consolidated financial statements.

Amendments to IAS 12 – Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify on the recognition requirements of deferred tax assets for unrealized losses and the method to assess the existence of probable future taxable income against which the deductible temporary differences can be utilized. These amendments did not affect the Company’s consolidated financial statements.

Amendments to IAS 7 – Statement of Cash Flows: Disclosure Initiative

The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for both the current and the comparative periods in Note 28.

There are no other standards and interpretations issued but not yet adopted that, in Management's opinion, have a significant impact on the Company’s results or equity.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

3.Cash and cash equivalents

	12/31/2017	12/31/2016
Cash and bank deposits	427,608	246,528
Cash equivalents	599,254	315,679
Total	1,026,862	562,207

The breakdown of cash equivalents is as follows:

	12/31/2017	12/31/2016
Private bonds	164,959	45,882
Government bonds	14,039	-
Investment funds	420,256	269,797
Total	599,254	315,679

As of December 31, 2017, the private bonds were comprised by buy-back transactions and Bank Deposit Certificates - “CDBs”, remunerated at a weighted average rate equivalent to 77.6% (52.2% as of December 31, 2016) of the Interbank Deposit Certificate rate (“CDI”).

Government bonds were primarily represented by LFT, emunerated at a weighted average rate of 116.3% of the CDI rate.   

The investment funds classified as cash equivalents have high liquidity and, according to the Company’s assessment, are readily convertible to a known amount of cash with insignificant risk of change in value. As of December 31, 2017, investment funds were remunerated at a weighted average rate equivalent to 99.8% (91.3% as of December 31, 2016) of the CDI rate.

4.Short-term investments

	12/31/2017	12/31/2016
Private bonds	731,061	77,080
Government bonds	32,701	41,104
Investment funds	191,827	313,049
Total	955,589	431,233

As of December 31, 2017, private bonds were represented by time deposits and debentures, with first-tier financial institutions, remunerated at a weighted average rate equivalent to 98% of the CDI rate (38% as of December 31, 2016, mainly represented by time deposits and short-term investments with first-tier financial institutions).          

Government bonds were primarily represented by LFT and LTN, remunerated at a weighted average rate of 107.7% (102.3% as of December 31, 2016) of the CDI rate.

Investment funds include private funds and bonds remunerated at a weighted average rate of 98.9% (101.0% as of December 31, 2016) of the CDI rate, the value may be subject to significant changes before redemption or maturity.

5.Restricted cash

	12/31/2017	12/31/2016
Deposits in guarantee of letter of credit	60,423	15,721
Escrow deposits (a)	71,110	67,345
Escrow deposits - Leases (b)	116,131	78,015
Other deposits (c)	20,383	7,688
Total	268,047	168,769

(a)Includes R$32,120 related to a contractual guarantee for the Supreme Court of Justice - STJ related to PIS and COFINS on interest attributable to shareholders’ equity paid to GLAI as described in Note 21. The other amounts relate to guarantees of GLA letters of credit.

(b)Related to deposits made to obtain letters of credit for aircraft operating leases from GLA.

(c)Related  mainly to bank guarantees.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

6.Trade receivables

	12/31/2017	12/31/2016
Local currency
Credit card administrators	454,975	345,798
Travel agencies	307,149	228,089
Cargo agencies	39,225	41,926
Airline partner companies	3,780	4,153
Other	43,871	66,774
Total local currency	849,000	686,740
Foreign currency
Credit card administrators	67,479	49,104
Travel agencies	9,829	16,323
Cargo agencies	823	2,215
Airline partner companies	47,662	31,200
Other	366	8,837
Total foreign currency	126,159	107,679
Total	975,159	794,419
Allowance for doubtful accounts	(38,681)	(34,182)
Total trade receivables	936,478	760,237

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

The aging list of trade receivables, net of allowance for doubtful accounts, is as follows:

	12/31/2017	12/31/2016
Not yet due
Until 30 days	594,968	348,168
31 to 60 days	133,438	151,186
61 to 90 days	44,642	66,925
91 to 180 days	71,116	86,652
181 to 360 days	26,541	11,147
Above 360 days	241	239
Total not yet due	870,946	664,317
Overdue
Until 30 days	21,686	19,117
31 to 60 days	8,338	5,623
61 to 90 days	3,559	10,915
91 to 180 days	15,620	22,648
181 to 360 days	8,059	20,609
Above 360 days	8,270	17,008
Total overdue	65,532	95,920
Total	936,478	760,237

The changes in allowance for doubtful accounts are as follows:

	12/31/2017	12/31/2016
Balance at the beginning of the year	(34,182)	(50,389)
Additions	(24,913)	(9,806)
Unrecoverable amounts	17,649	16,250
Recoveries	2,765	9,763
Balance at the end of the year	(38,681)	(34,182)

7.Inventories

	12/31/2017	12/31/2016
Consumables	28,006	27,281
Parts and maintenance materials	162,409	160,884
Other	585	6,867
Provision for obsolescence	(12,509)	(12,444)
Total	178,491	182,588

The changes in provision for obsolescence are as follows:

	12/31/2017	12/31/2016
Balances at the beginning of the year	(12,444)	(12,444)
Additions	(3,059)	-
Write-off	2,994	-
Balances at the end of the year	(12,509)	(12,444)

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

8.Deferred and recoverable taxes

8.1.Recoverable taxes

	12/31/2017	12/31/2016
Prepaid and recoverable income taxes	66,786	51,215
Withholding income tax (IRRF) (a)	7,308	9,601
PIS and COFINS (b)	408	16,908
Withholding tax of public institutions	6,127	8,130
Value added tax – IVA (c)	5,431	12,044
Other	4,195	1,449
Total	90,255	99,347
Current assets	83,210	27,287
Noncurrent assets	7,045	72,060

(a) IRRF: withholding income tax levied on financial income from financial investments.

(b) Contributions to Social Integration Program (PIS) and Contribution for the Financing of Social Security (COFINS).

(c) IVA: Value added tax on sales of goods and services abroad.

8.2.Deferred tax assets (liabilities) – Noncurrent

	12/31/2017	12/31/2016
Net operating losses carryforward
Income tax losses	129,316	9,149
Negative basis of social contribution	46,555	3,294
Temporary differences:
Mileage program	-	9
Allowance for doubtful accounts and other credits	63,585	13,823
Provision for losses on GLA’s acquisition	143,350	143,350
Provision for legal proceedings and tax liabilities	83,263	17,487
Aircraft return	68,438	32,515
Derivative transactions	9,603	1,635
Tax benefit due to goodwill incorporation (*)	14,588	29,177
Flight rights	(353,226)	(353,226)
Depreciation of engines and parts for aircraft maintenance	(167,913)	(148,581)
Reversal of goodwill amortization on GLA’s acquisition	(127,659)	(127,659)
Aircraft leases	34,660	30,589
Other	143,949	117,577
Total deferred taxes, net	88,509	(230,861)
Deferred tax assets – noncurrent	276,514	107,159
Deferred tax liabilities – noncurrent	(188,005)	(338,020)

(*) Related to the tax benefit from the reverse merger of G.A. Smiles Participações S.A. by Smiles S.A. Under the terms of the current tax legislation, the goodwill amortization for tax purposes will be a deductible expense on the taxable income calculation.

The Company, GLA and Smiles have net operating losses carryforward, comprised of accumulated income tax losses and negative basis of social contribution. The net operating losses carryforward do not expire; however, their compensation is limited to 30% of the annual taxable income. Net operating losses carryforward are as follows:

	GLAI		GLA		Smiles
	12/31/2017	12/31/2016	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Income tax losses	172,547	190,125	4,134,099	3,971,845	758,289	867,403
Negative basis of social contribution	172,547	190,125	4,134,099	3,971,845	758,289	867,403

As of December 31, 2017, the tax credits from tax losses carryforward were recorded based on the reasonably expected generation of future taxable income of GLAI and its subsidiaries, subject to legal limitations. The determination of the expected future taxable income were prepared based on the

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

business plan approved by the Board ofDirectors on January 11, 2018.

The Company’s Management considers that the deferred assets recognized as of December 31, 2017 arising from temporary differences will be realized in connection with the realization of the deferred tax liabilities and the expectation of future results.

The analysis of the realization of deferred tax assets was prepared on a company basis, as follows:

GLAI: the Company has tax credits of R$62,548, of which R$58,666 is related to net operating losses carryforward and R$3,882 is related to temporary differences, with realization supported by the Company’s long-term plan. However, for the year ended December 31, 2017, the Company reassessed its projections and did not recognize deferred tax assets for the amount of R$34,845 related to net operating losses carryforward.

GLA: GLA has tax credits on net operating losses carryforward of R$1,405,594. In view of recent events on the political scenario in Brazil, instability of the economic environment, fluctuations in the U.S. dollar exchange rate and other variables that can affect the projections of future results, as well as the history of losses in recent years, GLA has not recorded the recognition of total tax credits on net operating losses carryforward. On March 10 and September 19, 2017, the Company entered into the Brazilian Tax Regularization Program (“PRT”) and the Special Tax Regularization Program (“PERT”), respectively, which allowed the partial settlement of tax contingencies with tax loss carryforwards, see Note 18. As a result, the Company used tax losses carryforward of R$225,005, which was recorded in the statement of operations for the year. Additionally, the Company analyzed the realization of deferred tax assets on temporary differences and limited the recognition based on the expected realization of deferred tax liabilities on temporary differences. As a result, the Company did not recognize the net amount of R$163,416 of deferred tax assets on temporary differences.

Smiles Fidelidade: As of July 1, 2017, Smiles S.A. was incorporated by Smiles Fidelidade S.A. and, based on the projections of future taxable income, recognized a deferred tax asset on tax losses carryforward of R$193,020. The amount was recorded based on the expected generation of future taxable income of Smiles Fidelidade.

The reconciliation of the income taxes in profit or loss for the years ended December 31, 2017, 2016 and 2015 is as follows:

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

	12/31/2017	12/31/2016	12/31/2015
Income (loss) before income taxes	70,996	1,361,422	(3,447,100)
Income tax and social contribution tax rate	34%	34%	34%
Income at the statutory combined tax rate	(24,139)	(462,883)	1,172,014
Adjustments to calculate the effective tax rate:
Equity results	185	(435)	(1,340)
Tax income (losses) from wholly-owned subsidiaries	(106,533)	56,239	(83,702)
Income tax on permanent differences and other	(14,012)	3,803	1,920
Nontaxable revenues (nondeductible expenses), net	(51,572)	(41,913)	(111,828)
Exchange variation on foreign investments	(20,225)	242,190	(502,938)
Interest attributable to shareholders’ equity	4,817	3,543	4,673
Benefit on tax losses and temporary differences constituted (not constituted)	291,002	(59,602)	(1,322,939)
Use of tax losses in tax installment payment programs(*)	227,690	-	-
Total income taxes	307,213	(259,058)	(844,140)
Income taxes
Current	(239,846)	(257,944)	(196,140)
Deferred	547,059	(1,114)	(648,800)
Total income taxes	307,213	(259,058)	(844,140)

(*) Amount used to reduce by 76% of tax obligation from the PRT/PERT. For further information, see Note 18.

9.Deposits

	12/31/2017	12/31/2016
Judicial deposits (a)	508,515	432,182
Maintenance deposits (b)	484,565	584,149
Deposits in guarantee for lease agreements (c)	170,679	172,661
Total	1,163,759	1,188,992

(a)Judicial deposits

Judicial deposits and escrow accounts represent guarantees of lawsuits related to tax, civil and labor claims deposited in escrow until the resolution of the related claims. Part of the amount in escrow accounts is related to civil and labor claims arising from the succession orders on claims against Varig S.A. and proceedings filed by employees that are not related to the Company or any related party (third-party claims). As the Company is not correctly classified as the defendant of these lawsuits, whenever such blockages occur, the exclusion of such is requested in order to release the resources. As of December 31, 2017, the blocked amounts regarding Varig S.A.’s succession lawsuits and third-party lawsuits were R$108,860 and R$74,300, respectively (R$101,352 and R$77,695 as of December 31, 2016, respectively).

(b)Maintenance deposits

The Company made deposits in U.S. dollars for maintenance of aircraft and engines that will be used in future events as set forth in some lease contracts.

The maintenance deposits do not exempt the Company, as lessee, neither from the contractual obligations relating to maintenance of the aircraft nor from risk associated with operating activities. The Company holds the right to select any of the maintenance service providers or to perform such services internally.

The Company has two categories of maintenance deposits:

i.Maintenance guarantee: related to individual deposits refundable at the end of the agreement, which may also be used in maintenance events, depending on negotiations with lessors. The balance as of December 31, 2017 was R$218,361 (R$336,318 as of December 31, 2016).

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

ii.Maintenance reserve: related to amounts paid monthly based on the utilization of aircraft components, which may be used in maintenance events, according to the lease agreement. As of December 31, 2017, the balance of this reserve was R$266,204 (R$247,831 as of December 31, 2016).

(c)Deposits in guarantee for lease agreements

As required by its lease agreements, the Company holds guarantee deposits in U.S. dollars on behalf of the leasing companies, whose full refund occurs upon the contract expiration date.

10.Transactions with related parties

10.1.Transportation and consulting services with entities controlled by the controlling shareholder

All agreements related to transportation and consulting services are held by GLA. The related parties for these services are listed below, together with the object of the agreements and their main contractual conditions:

Viação Piracicabana Ltda.: provides airport shuttle services for passengers, luggage and employees. As of July 1, 2017, an Assignment Agreement was entered into between Breda Transportes e Serviços S.A. (“assignor”) and Viação Piracicabana Ltda. (“assignee”), through which the assignee will be responsible for the rights and obligations as of the execution of the Assignment Agreement. The agreement expires on November 6, 2018.

Expresso União: provides transportation to employees, and the agreement expires on April 2, 2018.

Pax Participações S.A.: provides consulting and advisory services, and the agreement has no expiration date.

Aller Participações: provides consulting and advisory services, and the agreement has no expiration date.

Limmat Participações S.A.: provides consulting and advisory services, and the agreement has no expiration date.

For the year ended December 31, 2017, GLA recognized total expenses related to these services of R$8,583 (R$13,013 and R$16,106 for the years ended December 31, 2016 and 2015, respectively). As of December 31, 2017, the balance payable to the related parties was R$769 (R$800 as of December 31, 2016), and was mainly related to services provided by Breda Transportes e Serviços S.A. and Viação Piracicabana Ltda.

10.2.Contracts account opening UATP (“Universal Air Transportation Plan”) to grant credit limit

In September 2011, GLA entered into agreements with the related parties Empresa de Ônibus Pássaro Marron S.A., Viação Piracicabana Ltda., Thurgau Participações S.A., Comporte Participações S.A., Quality Bus Comércio De Veículos Ltda., Empresa Princesa Do Norte S.A., Expresso União Ltda., Breda Transporte e Serviços S.A., Oeste Sul Empreendimentos Imobiliários S.A. Spe., Empresa Cruz De Transportes Ltda., Expresso Maringá do Vale S.A., Glarus Serviços Tecnologia e Participações S.A., Expresso Itamarati S.A., Transporte Coletivo Cidade Canção Ltda., Limmat Participações S.A., Turb Transporte Urbano S.A., Vaud Participações S.A., Aller Participações S.A. and BR Mobilidade Baixada Santista S.A. SPE, all with no expiration date, whose purpose is to issue credits to purchase airline tickets issued by the Company. The UATP account (virtual card) is accepted as a payment method on the purchase of airline tickets and related services, seeking to simplify billing and facilitate payment between the participating companies.

10.3.Agreement to use VIP lounge

On April 9, 2012, the Company entered into an agreement with Delta Air Lines Inc. (“Delta Air Lines”) for the mutual use of VIP lounge, with expected payments of US$20 per passenger. On August 30, 2016, the companies signed an  amendment of the agreement establishing a prepayment for the use of VIP lounge in the amount of US$3 milion. As of December 31, 2017, the

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

outstanding balance was R$6,779.

10.4. Maintenance and financing contract for parts and engine maintenance

In 2010, GLA entered into an engine maintenance service agreement with Delta Air Lines. The maintenance agreement was renewed on December 22, 2016 and will expire on December 31, 2020.

On January 31, 2017, GLA entered into a loan agreement with Delta Air Lines in the amount of US$50 milion, with a maturity date on December 31, 2020, with a refund obligation to be performed by the Company, GLA and Gol Finance, pursuant to the refund agreement entered into on August 19, 2015, with a guarantee granted by the Company to GAC. Under the terms of this agreement, the Company holds flexible payment maturities regarding engine maintenance services, through a credit limit available.

During the year ended December 31, 2017, the maintenance expenses performed by Delta Air Lines was R$403,195 (R$210,220 and R$307,658 for the years ended December 31, 2016 and 2015, respectively). As of December 31, 2017, the balance payable for engine maintenance  recorded in “Suppliers” was R$372,511 (R$201,170 as of December 31, 2016).

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

10.5.Term loan guarantee

On August 31, 2015, Delta guaranteed a US$300 million Term Loan borrowed by Gol Finance through Morgan Stanley, with a term of 5 years. The Term Loan bears an effective interest rate of 6.70% per annum, payable semi-annually.    For additional information, see Note 16.

10.6.Strategic business partnership agreement

On February 19, 2014, the Company signed a long term strategic partnership for commercial cooperation agreement with Air France-KLM with the purpose of sales activities improvements and codeshare expansion and mileage programs benefits between the companies for the customers in the Brazilian and European markets.

The agreement provides for the incentive investment in the Company in the amount of R$112,152, fully received by the Company. The agreement will mature within 5 years and the installments will be amortized on a monthly basis. As of December 31, 2017, the Company has deferred revenue in the amount of R$20,557 and R$3,426 recorded in "Other liabilities" in the current and noncurrent liabilities, respectively (R$22,430 and R$26,169 as of December 31, 2016, in the current and noncurrent liabilities, respectively). 

On January 1, 2017, the Company entered into an agreement with Air France – KLM to expand our strategic partnership by means of a credit line granted to us for the financing of maintenance payments. As of December 31, 2017, the Company had a balance of R$157,264 recorded under “Suppliers”.

10.7.Agreements with Smiles

Operating agreement: The operating agreement determines commercial and operational relations between the Company, GLA and Smiles, as well as exclusiveness characteristics related to the Smiles Program. The 20-year operating agreement will be automatically renewed for successive five-year periods if neither party objects at least two years prior to its expiration. If a party is given notice of non-renewal, it may terminate the agreement early by providing written notification to the other party six months prior to the termination date

Back office services agreement: On December 28, 2012, GLA entered into a back office services agreement with Smiles, that contains the terms, conditions and levels of certain services in connection with back office activities including controllership, accounting, internal controls and auditing, finance, information technology, call center, inventory and legal matters. The three-year Back Office Services Agreement is automatically renewed for successive three-year periods if neither party objects 12 months prior to its expiration. Smiles may terminate portions of the Back Office Services Agreement at any time by providing prior written notice to GLA.

Main miles and tickets purchase agreement: this agreement sets the prices and the terms and conditions for the purchase of miles and sales of tickets.

Advance airline ticket purchase agreement: on February 26, 2016, GLA entered into a miles and tickets purchase agreement with Smiles, totaling up to R$1.0 billion, providing for advance ticket sales to Smiles in various tranches through June 30, 2017. In 2016 and 2017, Smiles disbursed the total amount of trhe agreement, of which R$760 million in 2016 and R$ 240 milion in 2017. On April 5, 2017, the Company entered into the first amendment to the advance ticket purchase agreement for the acquisition of new credits in the amount of R$480 milion, which will be paid in installments to be agreed upon by the parties. In 2017, the Company paid R$280 milion related to this first amendment

All the balances and transactions between the Company, GLA and Smiles were eliminated in the consolidated financial statements.

10.8.Remuneration of key management personnel

	12/31/2017	12/31/2016	12/31/2015
Salaries and benefits (*)	57,838	38,134	28,700
Related taxes and charges	6,019	4,690	5,352
Share-based payments	11,219	11,226	10,469
Total	75,076	54,050	44,521

(*) Includes the Board of Directors’ and Audit Committee’s compensation.

As of and for the years ended December 31, 2017, 2016 and 2015, the Company did not offer post-employment benefits, and there were no severance benefits or other long-term benefits for the management and other employees. Specific benefits can be provided to the Company’s key management personnel, limited to a short-term period.

11.Share-based payments

The Company has two share-based payment plans offered to its management personnel: the Stock Option Plan and the Restricted Share Plan. Both plans stimulate and promote the alignment of the Company’s goals with management and employees, mitigate risks for the Company resulting from the loss of executives and strengthen the productivity and commitment of these executives to long-term results.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

11.1.Stock options plan - GLAI

The beneficiaries of the Company’s stock option plan are allowed to purchase shares at the price agreed on the grant date after three years from the grant date, provided that they maintain their employment relationship up to the end of this period.

The stock options vest 20% as from the first year, an additional 30% as from the second year, and the remaining 50% as from the third year. All stock options may also be exercised within 10 years after the grant date. For stock options granted, the expected volatility of the options is based on the historical volatility of 252 working days of the Company’s shares traded on the B3.

Year of grant	Date of the Board Meeting	Total options granted	Number of options outstanding as of 12/31/2017	Exercise price of the option (in Reais)	Fair value  of the option at grant date (in Reais)	Estimated volatility of share price	Expected dividend yield	Risk-free return rate	Average remaining maturity (in years)
2009 (a)	02/04/2009	1,142,473	149,000	10.52	8.53	76.91%	-	12.66%	1.0
2010 (b)	02/02/2010	2,774,640	796,872	20.65	16.81	77.95%	2.73%	8.65%	2.0
2011	12/20/2010	2,722,444	538,915	27.83	16.07 (c)	44.55%	0.47%	10.25%	2.9
2012	10/19/2012	778,912	392,895	12.81	5.32 (d)	52.25%	2.26%	9.00%	4.7
2013	05/13/2013	802,296	437,315	12.76	6.54 (e)	46.91%	2.00%	7.50%	5.3
2014	08/12/2014	653,130	392,042	11.31	7.98 (f)	52.66%	3.27%	11.00%	6.6
2015	08/11/2015	1,930,844	1,323,567	9.35	3.37 (g)	55.57%	5.06%	13.25%	7.6
2016	09/30/2016	5,742,732	4,237,873	2.62	1.24 (h)	98.20%	6.59%	14.25%	8.7
2017	08/08/2017	947,767	771,814	8.44	7.91 (i)	80.62%	1.17%	11.25%	9.6
Total		17,495,238	9,040,293	8.63					7.1

(a)In April 2010, an additional grant of 216,673 shares referring to the 2009 plan was approved.

(b)In April 2010, an additional grant of 101,894 shares referring to the 2010 plan was approved.

(c)The fair value is calculated by the average value from R$16.92, R$16.11 and R$15.17 for the respective vesting periods (2011, 2012 and 2013).

(d)The fair value is calculated by the average value from R$6.04, R$5.35 and R$4.56 for the respective vesting periods (2012, 2013 and 2014).

(e)The fair value is calculated by the average value from R$7.34, R$6.58 and R$5.71 for the respective vesting periods (2013, 2014 and 2015).

(f)The fair value is calculated by the average value from R$8.20, R$7.89 and R$7.85 for the respective vesting periods (2014, 2015 and 2016).

(g)The fair value is calculated by the average value from R$3.61, R$3.30 and R$3.19 for the respective vesting periods (2015, 2016 and 2017).

(h)On July 27, 2016, an additional grant of 900,000 shares related to the 2016 plan was approved. The fair value was calculated by the average value from R$1.29, R$1.21 and R$1.22 for the respective vesting periods (2017, 2018 and 2019).

(i)The fair value is calculated by the average value from R$8.12, R$7.88 and R$7.72 for the respective periods of vesting (2017, 2018 and 2019).

The movement in the stock options outstanding for the year ended December 31, 2017 is as follows:

	Number of stock options	Weighted average exercise price
Options outstanding as of December 31, 2016	8,992,055	9.14
Options granted	947,767	8.44
Options cancelled and adjustments in estimated prescribed rights	(422,763)	22.37
Options exercised	(476,766)	5.65
Options outstanding as of December 31, 2017	9,040,293	8.63
Number of options exercisable as of:
December 31, 2016	6,214,124	13.66
December 31, 2017	7,307,151	9.59

11.2.Restricted share plan - GLAI

The Company’s restricted share plan was approved at the Extraordinary Shareholders’ Meeting of October 19, 2012, and the first grant was approved at the Board of Directors’ Meeting of November 13, 2012.

Year of grant	Date of Board Meeting	Total shares granted	Total vested shares	Average fair value at grant date
2014	08/13/2014	804,073	-	11.31
2015	04/30/2015	1,207,037	875,923	9.35
2016	09/30/2016	4,007,081	3,137,373	2.62
2017	08/08/2017	1,538,213	1,283,895	8.44
Total		7,556,404	5,297,191

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

The movement in the restricted shares for the year ended December 31, 2017 is as follows:

	Total restricted shares
Restricted shares outstanding as of December 31, 2016	4,609,256
Restricted shares granted	1,538,213
Restricted shares cancelled and adjustments in estimated expired rights	(235,097)
Restricted shares transferred (*)	(615,181)
Restricted shares outstanding as of December 31, 2017	5,297,191

 (*) The restricted shares transferred totaled R$6,566.

11.3.Stock option plan – Smiles Fidelidade

The beneficiaries of the Smiles Fidelidade’s stock option plan are allowed to purchase shares at the price agreed on the grant date after three years from the grant date, provided that they maintain their employment relationship up to the end of this period.

The stock options vest 20% as from the first year, an additional 30% as from the second year, and the remaining 50% as from the third year. All stock options may also be exercised within 10 years after the grant date. For stock options granted, the expected volatility of the options is based on the historical volatility of 252 working days of the Smiles’ shares traded on the B3.

Year of  grant	Date of Board Meeting	Total options  granted	Number of options outstanding as of 12/31/2017	Exercise price of the option (in Reais)	Average fair value at grant date	Estimated volatility of share price	Expected dividend yield	Risk-free return rate	Average remaining maturity (in years)
2013	08/08/2013	1,058,043	54,003	21.70	4.25 (a)	36.35%	6.96%	7.40%	5.5
2014	02/04/2014	1,150,000	199,050	31.28	4.90 (b)	33.25%	10.67%	9.90%	6.0
Total		2,208,043	253,053

(a)The fair value is calculated by average value from R$4.84 and R$4.20 for the vesting periods in 2013 and 2014, and R$3.73 for the vesting periods in 2015 and 2016.

(b)The fair value is calculated by average value from R$4.35, R$4.63, R$4.90, R$5.15 and R$5.37 for the respective vesting periods from 2014 to 2018.

The movement of the stock options outstanding for the year ended December 31, 2017 is as follows:

	Number of stock options	Weighted average exercise price
Options outstanding as of December 31, 2016	483,053	30.21
Options exercised	(230,000)	16.45
Options outstanding as of December 31, 2017	253,053	29.24

For the years ended December 31, 2017, 2016 and 2015, the Company recorded in equity a result from share-based payments of R$11,956, R$12,658 and R$13,516, respectively, attributable to equity holders of the parent, and R$192, R$413 and R$836, respectively, related to non-controlling interests, for the plans presented above, with a corresponding entry in profit or loss in Salaries.

12.Investments

The amount of the investments is related to: i) 25.4% of the capital of Netpoints Fidelidade S.A., held by Smiles Fidelidade, and ii) SCP Trip, held by GLA. Both investments are accounted for under the equity method.

The financial information of the Company’s investees and the changes in the investments balance for the years ended December 31, 2017 and 2016 are as follows:

	Trip		Netpoints (b)
	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Relevant information of the Company’s investees:
Total number of shares	-	-	130,492,408	130,492,408
Capital stock	1,318	2,083	75,351	75,351
Interest	60.00%	60.0%	25.4%	25.4%
Total equity (deficit)	2,225	3,395	(22,997)	(14,991)
Goodwill on investment acquisition	-	-	-	15,184
Adjusted equity (a)	1,333	2,038	-	-
Net income (loss) for the year	907	2,081	(9,344)	(29,050)
Adjusted net income (loss) for the year attributable to the Company’s interest (a)	544	1,250	-	(2,530)

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Changes on investments	Trip	Netpoints	Total
Balances as of December 31, 2015	2,781	15,643	18,424
Equity results	1,250	(2,530)	(1,280)
Capital increase	-	3,439	3,439
Loss on capital increase (b)	-	(1,368)	(1,368)
Dividends	(1,993)	-	(1,993)
Balances as of December 31, 2016	2,038	15,184	17,222
Equity results	544	-	544
Write-off of Netpoints goodwill	-	(15,184)	(15,184)
Dividends	(1,249)	-	(1,249)
Balance as of December 31, 2017	1,333	-	1,333

(a) Reflects the Company’s interest on the total equity and net income (loss) of the respective investee.

(b) In September 2016, the Board of Directors of Smiles approved the subscription of the capital increase of its associated Netpoints through the issuance of 20,230,201 new shares. Accordingly, the interest in Netpoints from Smiles increased from 21.3% to 25.4%.

Partial disposal of equity interest – Smiles S.A.

On June 26, 2017, the Company sold 1,250,000 shares of Smiles S.A. through a stock auction totaling R$76,313. With this sale, the Company reduced its interest in Smiles from 53.8% to 52.7%, while maintaining its position as controlling shareholder. The gain from this partial sale of investment was recorded under equity as “Sale of interest in subsidiary”. The amounts related to this transaction are as follows:

	12/31/2017
Shares sold	1,250,000
Value per share	61.05
Sale value	76,313
Investment value	(4,863)
Income taxes on gain on capital decrease (*)	(8,150)
Gain from capital decrease in  investment in subsidiary	63,300

(*) Refers to the income and social contribution taxes on the transaction.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

13.Earnings (loss) per share

Although there are differences between common and preferred shares in terms of voting rights and priority in case of liquidation, the Company’s preferred shares are not entitled to receive any fixed dividends. The Company’s preferred shares carry economic rights, including dividend rights, 35 times those of common shares. Accordingly, net income (loss) for the year attributable to equity holders of the parent is allocated in proportion to equity holders’ interest in common shares and preferred shares.

Consequently, earnings (loss) per share is calculated by dividing the net income or loss by the weighted average number of all classes of shares outstanding during the period.

Diluted earnings or loss per share are computed including stock options granted to key management and employees using the treasury shares method when the effect is dilutive. The Company has only the stock option plan in the category of potentially dilutive shares, as Note 11. For the years ended December 31, 2017, 2016 and 2015, only the stock option plan granted in 2016 had exercise prices higher than the accumulated market average price (in the money) and, therefore, has a dilutive effect. The other plans presented exercise prices lower than the average of the accumulated market prices (out of money), and have antidilutive effect, so were not considered for the diluted earnings per share.

The antidilutive effect of all potential shares is disregarded in calculating diluted earnings or loss per share.

The following table sets forth net income (loss) for the year attributable to equity holders of the parent for the periods indicated:

	Parent Company and Consolidated
	12/31/2017			12/31/2016			12/31/2015
	Common	Preferred	Total	Common	Preferred	Total	Common	Preferred	Total
Numerator
Net income (loss) for the year attributable to equity holders of the parent	7,869	11,315	19,184	353,129	496,490	849,619	(2,123,945)	(2,336,938)	(4,460,883)
	7,869	11,315	19,184	353,129	496,490	849,619	(2,123,945)	(2,336,938)	(4,460,883)
Denominator	3
Weighted average number of outstanding shares (in thousands) (*)	4,981,350	204,664		5,035,037	202,261		5,035,037	158,285
Effects of dilution from stock options	-	2,614		-	347		-	-
Adjusted weighted average number of outstanding shares and diluted presumed conversions (in thousands) (*)	4,981,350	207,278		5,035,037	202, 608		5,035,037	158,285
Basic earnings (loss) per share	0.002	0.055		0.070	2.455		(0.422)	(14.764)
Diluted earnings (loss) per share	0.002	0.055		0.070	2.450		(0.422)	(14.764)

(*) Weighted average considers the split of common shares approved at the Company’s extraordinary shareholders’ meeting on March 23, 2015, in accordance with IAS 33. Earnings per share presented herein reflects the economic rights attributable to each class of shares.

Diluted loss per share is calculated by the weighted average number of outstanding shares, in order to assume the conversion of all potential dilutive shares. Diluted result per share is calculated based on considering the instruments that may have a potential dilutive effect in the future, such as share-based payment instruments, described in Note 11. However, due to the losses reported for the year ended December 31, 2015, these instruments issued have antidilutive effect and, therefore, were not considered in the weighted average number of outstanding shares for the computation of diluted loss per share.

F - 36

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

14.Property, plant and equipment

	12/31/2017				12/31/2016
	Average annual depreciation rate	Cost	Accumulated depreciation	Net amount	Net amount
Flight equipment
Aircraft held under finance leases	5.9%	2,000,866	(649,430)	1,351,436	1,411,932
Sets of replacement parts and spare engines	7.2%	1,345,161	(494,684)	850,477	804,974
Aircraft reconfigurations/overhauling	26.8%	1,807,133	(941,372)	865,761	615,812
Aircraft and safety equipment	20.0%	843	(438)	405	467
Tools	10.0%	36,199	(18,124)	18,075	14,617
		5,190,202	(2,104,048)	3,086,154	2,847,802
Impairment losses (*)	-	(26,076)	-	(26,076)	(30,726)
Total flight equipment		5,164,126	(2,104,048)	3,060,078	2,817,076
Property, plant and equipment in use
Vehicles	20.0%	10,548	(9,100)	1,448	1,660
Machinery and equipment	10.0%	57,834	(37,792)	20,042	22,343
Furniture and fixtures	10.0%	28,148	(16,639)	11,509	10,061
Computers and peripherals	20.0%	39,458	(30,464)	8,994	7,401
Communication equipment	10.0%	2,617	(1,914)	703	823
Facilities	10.0%	1,534	(1,222)	312	332
Maintenance center - Confins	10.0%	107,127	(80,209)	26,918	38,096
Leasehold improvements	18.5%	33,111	(19,571)	13,540	8,248
Construction in progress	-	33,503	-	33,503	31,571
Total property, plant and equipment in use		313,880	(196,911)	116,969	120,535
		5,478,006	(2,300,959)	3,177,047	2,937,611
Advances for property, plant and equipment acquisition	-	18,720	-	18,720	87,399
Total property, plant and equipment		5,496,726	(2,300,959)	3,195,767	3,025,010

(*) Refers to provisions for impairment losses for rotable items, classified under "Sets of replacement parts and spare engines", recorded by the Company in order to present its assets according to the actual capacity for the generation of economic benefits.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Changes in property, plant and equipment balances are as follows:

	Property, plant and equipment under finance lease	Other flight equipment	Advances for property, plant and equipment acquisition	Other	Total
Balances as of December 31, 2015	2,081,973	1,419,596	623,843	131,202	4,256,614
Additions	-	425,218	71,503	27,400	524,121
Disposals	(597,136)	(122,487)	(607,947)	(9,911)	(1,337,481)
Depreciation	(72,905)	(317,183)	-	(28,156)	(418,244)
Balances as of December 31, 2016	1,411,932	1,405,144	87,399	120,535	3,025,010
Additions	-	827,658	263,328	30,511	1,121,497
Disposals	(5,639)	(135,381)	(332,007)	(10,506)	(483,533)
Depreciation	(54,857)	(388,779)	-	(23,571)	(467,207)
Balances as of December 31, 2017	1,351,436	1,708,642	18,720	116,969	3,195,767

During the year ended December 31, 2017, the Company reviewed the useful life of its assets and concluded that the estimates used are in line with its business plan.

15.Intangible assets

	Goodwill	Airport operating rights	Software	Total
Balances as of December 31, 2015	542,302	1,038,900	133,403	1,714,605
Additions	-	-	55,316	55,316
Disposals	-	-	(781)	(781)
Amortization	-	-	(29,424)	(29,424)
Balances as of December 31, 2016	542,302	1,038,900	158,514	1,739,716
Additions	-	-	55,449	55,449
Disposals	-	-	(9,662)	(9,662)
Amortization	-	-	(38,218)	(38,218)
Balances as of December 31, 2017	542,302	1,038,900	166,083	1,747,285

Goodwill and other intangible assets were subject to impairment tests as of December 31, 2017 and 2016 using the discounted cash flows for each cash generating unit to calculate the value in use.

In order to assess the recoverable value, assets are grouped at the lowest levels for which there are separately identifiable cash flows (Cash-Generating Units – “CGUs”). In order to determine the carrying amount of each cash-generating unit, the Company considers the intangible assets recorded and all necessary tangible assets, given that it will only generate economic benefits by using the combination of both.

The Company allocates goodwill to two cash-generating units: GLA and Smiles, and the airport operating rights are fully allocated to GLA, as shown below:

F - 38

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

	Goodwill GLA	Goodwill Smiles	Airport operating rights
December 31, 2017
Book value	325,381	216,921	1,038,900
Book value - CGU	1,061,177	395,105	1,038,900
Value in use	15,206,092	5,464,287	5,069,156
Pre tax discount rate	15.46%	19.26%	14.50%
Perpetuity growth rate	3.50%	3.50%	3.50%
December 31, 2016
Book value	325,381	216,921	1,038,900
Book value - CGU	2,433,861	56,880	1,038,900
Value in use	3,636,201	9,476,173	4,816,306
Pre tax discount rate	23.92%	14.51%	27.34%
Perpetuity growth rate	3.50%	3.50%	8.50%

The amount of value in use was compared to the carrying amount of each cash generating unit and, as a result, the Company did not recognized impairment losses.

The assumptions used in the impairment tests of intangible assets are consistent with internal projections, for a five-year period and after five-year period it was considered a perpetuity growth rate, and operating plans, both reviewed and approved by the Company’s Management. The discounted cash flows that determined the value in use of the cash generating units was prepared in accordance with the Company's business plan approved on January 11, 2018.

The main assumptions taken into consideration by the Company to determine the value in use of the cash-generating units are:

Capacity and fleet: consider the use, the aircraft capacity used in each route and the projected size of the fleet in operation.

Demand: market efficiency is the key input for the projection of the Company's growth in demand. Management believes that market efficiency is the ratio of market share and its participation in the load factor. This indicator reflects how efficiently the Company uses its share of the market’s total supply based on how much demand for air transportation it absorbs.

Revenue per passenger: considers the average price charged by GLA and the effects of market variables (see the variables used below).

Operating costs related to the business: based on the historical cost and updated by indicators, such as inflation, supply, demand and variation of the U.S. dollar.

The Company also considered market variables, including the GDP (source: Brazilian Central Bank), the U.S. dollar (source: Brazilian Central Bank), kerosene prices (per barrel) (source: Brazilian National Agency of Petroleum - ANP) and interest rates (source: Bloomberg).

F - 39

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

16.Short and long-term debt

	Maturity of the contract	Interest rate	12/31/2017	12/31/2016
Short-term debt
Local currency
Safra (a)	May 2018	128% of DI	-	9,690
Debentures VI (g)	Sep. 2019	132% of DI	395,093	-
Interest accrued	-	-	23,921	45,026
Foreign currency (US$)
J.P. Morgan (b)	Aug. 2019	1.32% p.a.	43,909	42,275
Finimp (c)	Dec. 2018	5.75% p.a.	240,973	174,428
Engine Facility (Cacib) (d)	Jun. 2021	Libor 3m+2.25% p.a.	17,145	16,889
ExIm (Cacib)  (e)	Apr. 2019	Libor 3m+0.75% p.a.	47,507	-
Senior Notes I (f)	Apr. 2017	7.60% p.a.	-	182,418
Senior Notes V (k)	Dec. 2018	9.71% p.a.	23,258	-
PK Finance (q)	Aug. 2026	5.70% p.a.	7,883	-
Interest accrued	-	-	74,989	97,670
			874,678	568,396
Finance leases	Jun. 2025	4.04% p.a.	288,194	266,894
Total short-term debt			1,162,872	835,290
Long-term debt
Local currency
Safra (a)	May. 2018	128% of DI	-	4,871
Debentures VI (g)	Sep. 2019	132% of DI	617,333	1,005,242
Foreign currency (US$)
J.P. Morgan (b)	Aug. 2019	Libor 3m+0.75% p.a.	12,451	11,142
Engine Facility (Cacib) (d)	Jun. 2021	Libor 3m+2.25% p.a.	142,137	156,917
ExIm (Cacib)  (e)	Apr. 2019	Libor 3m+0.75% p.a.	35,634	-
PK Finance (p)	Aug. 2026	5.70% p.a.	78,239	-
Senior Notes II (h)	Jul. 2020	9.64% p.a.	314,589	368,000
Senior Notes III (i)	Feb. 2023	11.30% p.a.	69,074	68,053
Senior Notes IV (j)	Jan. 2022	9.24% p.a.	299,524	889,595
Senior Notes V (k)	Dec. 2018	9.71% p.a.	-	43,010
Senior Notes VI (l)	Jul. 2021	9.87% p.a.	127,181	120,631
Senior Notes VII (m)	Dec. 2028	9.84% p.a.	54,752	52,721
Senior Notes VIII (n)	Jan. 2025	7.19% p.a.	1,597,713	-
Perpetual Notes (o)	-	8.75% p.a.	438,201	428,436
Term Loan (p)	Aug. 2020	6.70% p.a.	968,010	944,194
			4,754,838	4,092,812
Finance leases	Jun. 2025	4.04% p.a.	1,187,957	1,451,118
Total long-term debt			5,942,795	5,543,930
Total			7,105,667	6,379,220

(a)Credit line obtained by Webjet fully repaid in 2017, see Note 16.3.

(b)Issuance of 3 series of Guaranteed Notes to finance engine maintenance, as described in Note 10.4.

(c)Credit line with Banco do Brasil and Safra of import financing for purchase of spare parts and aircraft equipment.

(d)Credit line raised on September 30, 2014 with Credit Agricole.

(e)Credit line raised on August 11, 2017 with Credit Agricole.

(f)Issuance of Senior Notes I by Gol Finance Inc. on March 22, 2007, which was used for prepayments of financing for purchase of aircraft. The total amount was settled on its maturity in April 2017.

(g)Issuance of 105,000 debentures by GLA on September 30, 2015 for early settlement of the Debentures IV and V.

(h)Issuance of Senior Notes II by Gol Finance Inc. on July 13, 2010 in order to repay debts held by the Company.

(i)Issuance of Senior Notes III by GLA on February 7, 2013 in order to finance the prepayment of debts due within the next 3 years. The total amount of notes was transferred to Gol Finance along with the financial investments acquired on the date of issuance, and a portion of the loan was prepaid.

(j)Issuance of  Senior Notes IV by Gol Finance on September 24, 2014 in order to finance partial repurchase of Senior Notes I, II and III.

(k)Issuance of Senior Notes series V by Gol Finance on July 7, 2016, as a result of the Exchange Offer of Senior Notes I, II, III, IV and Perpetual Notes.

(l)Issuance of Senior Notes series VI by Gol Finance on July 7, 2016, as a result of the Exchange Offer of Senior Notes I, II, III, IV and Perpetual Notes.

(m)Issuance of Senior Notes series VII by Gol Finance on July 7, 2016, as a result of the Exchange Offer of Senior Notes I, II, III, IV and Perpetual Notes.

(n)Issuance of  Senior Notes series VIII by Gol Finance on December 11, 2017 to repurchase Senior Notes and for other general purposes.

(o)Issuance of Perpetual Notes by Gol Finance on April 5, 2006 to finance aircraft purchase and repayment of loans.

(p)Term Loan issued by Gol Finance on August 31, 2016 for aircraft purchases and bank repayment of loans, with backstop guarantee from Delta. For additional information, see Note 10.5.

(q)Loan obtained with PK Finance, with a guarantee of four engines, as described Note 16.2.

F - 40

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Total debt includes issuance costs of R$101,795 (R$97,433 as of December 31, 2016) which will be amortized over the term of the related debt.

As of December 31, 2017, the maturities of long-term debt, excluding finance leases, are as follows:

	2019	2020	2021	2022	2022 onwards	Without maturity date	Total
Local currency
Debentures VI	617,333	-	-	-	-	-	617,333
Foreign currency (US$)
J.P. Morgan	12,451	-	-	-	-	-	12,451
Engine Facility (Cacib)	17,177	17,177	107,783	-	-	-	142,137
ExIm (Cacib)	35,634	-	-	-	-	-	35,634
PK Finance	8,352	8,838	9,375	9,933	41,741	-	78,239
Senior Notes II	-	314,589	-	-	-	-	314,589
Senior Notes III	-	-	-	-	69,074	-	69,074
Senior Notes IV	-	-	-	299,524	-	-	299,524
Senior Notes VI	-	-	127,181	-	-	-	127,181
Senior Notes VII	-	-	-	-	54,752	-	54,752
Senior Notes VIII	-	-	-	-	1,597,713	-	1,597,713
Perpetual Notes	-	-	-	-	-	438,201	438,201
Term Loan	-	968,010	-	-	-	-	968,010
Total	690,947	1,308,614	244,339	309,457	1,763,280	438,201	4,754,838

F - 41

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

The fair value of debt as of December 31, 2017 is as follows:

	Book value (c)	Market value
Senior Notes and Perpetual Notes (a)	2,974,501	2,955,391
Debentures (b)	1,036,348	1,072,232
Term Loan (b)	989,572	1,013,929
Other	629,095	724,788
Total	5,629,516	5,766,340

(a) Fair value obtained through current market quotations.

(b) Fair value obtained through internal valuation.

(c) The book value presented is net of interest and issuance costs.

16.1.Covenants

As of December 31, 2017, long-term debt (excluding perpetual notes and finance leases) that amounted to R$4,316,637 (R$3,664,376 as of December 31, 2016) is subject to restrictive covenants, including but not limited to those that require the Company to maintain liquidity requirements and the coverage of expense with interest.

The Company has restrictive covenants on the Term Loan and Debentures VI with the following financial institutions: Bradesco and Banco do Brasil. In the Term Loan, the Company must make deposits for reaching contractual limits of the debt pegged to the U.S. dollar. As of December 31, 2017, the Company did not have collateral deposits linked to the contractual limits of the Term Loan.  As of December 31, 2017, Debentures VI were subject to the following covenants: (i) net debt/EBITDAR below 5.50 and (ii) debt coverage ratio (ICSD) of at least 1.33.  According to the most recent measurements on December 31, 2017, the ratios obtained were: (i) net debt/EBITDAR of 4.70; and (ii) debt coverage ratio (ICSD) of 1.43. As a result, the Company met the minimum required levels for the covenants and, consequently, it was in compliance with the covenants. The next measurement will be for the end of the first half of 2018.

16.2.Restructuring of loans and financing in the year ended December 31, 2017

Import financing (Finimp): the Company, through its subsidiary GLA, obtained new funding in the year and renegotiated the maturities of the agreements, with the issue of promissory notes as collateral for these transactions, which are part of a credit line maintained by the Company for import financing in order to purchase spare parts and aircraft equipment. The funding operations during the year were as follows:

F - 42

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Renegotiation and issuance	Bank	Principal amount		Interest	Maturity
date		(US$)	(R$)	rate (p.a.)	date
01/13/2017	Banco do Brasil	5,245	16,803	6.13%	01/05/2018
02/01/2017	Banco do Brasil	8,595	27,057	6.15%	01/28/2018
02/10/2017	Banco do Brasil	4,815	15,001	6.14%	02/05/2018
04/20/2017	Banco do Brasil	4,274	13,442	6.20%	04/16/2018
05/31/2017	Banco Safra	5,407	17,540	4.85%	05/29/2018
06/26/2017	Banco do Brasil	9,638	31,929	5.95%	06/21/2018
06/26/2017	Banco Safra	4,571	15,142	5.17%	06/21/2018
06/30/2017	Banco do Brasil	10,436	34,526	5.85%	06/28/2018
06/30/2017	Banco do Brasil	7,823	25,879	5.85%	06/28/2018
10/30/2017	Banco do Brasil	2,693	8,768	5.53%	01/12/2018
12/04/2017	Banco Safra	9,347	30,383	5.11%	11/29/2018

Engine maintenance financing (J.P. Morgan): On January 11, 2017, GLA obtained a credit line drawn by issuing Guaranteed Notes for engine maintenance services with Delta Air Lines. The amount of the credit line was R$33,620 (US$10,456 on the transaction date), with issuance costs amounting to R$1,802 (US$560 on the transaction date). On August 1, 2017, GLA obtained a new credit line of the same contract, in the amount of R$32,451 (US$10,414 on the transaction date), with issuance costs totaling R$1,628 (US$514 on the transaction date). Both credit lines have quarterly amortization and interest payments, and a financial guarantee from Ex-Im Bank.

Financing of Wi-Fi Kits (Cacib): On August 11, 2017, GLA obtained a credit line for the installation of Wi-Fi technology with GOGO INC., by issuing Guaranteed Notes, in the amount of R$19,365 (US$6,109 on the transaction date), with quarterly amortization and interest payments, issuance costs of R$1,166 (US$367 on the transaction date) and a financial guarantee from Ex-Im Bank.

PK Finance: On August 31, 2017, the Company obtained funding with a guarantee of four engines in the amount of R$84,342 (US$26,800 on the transaction date), with issuance costs amounting to R$512 (US$161 on the transaction date). This type of financing has monthly interest amortization and payment.

Engine maintenance financing (Cacib): On November 29, 2017, GLA obtained a credit line drawn by issuing Guaranteed Notes for engine maintenance services with Delta Air Lines. The amount of the credit line was R$32,136 (US$10,000 on the transaction date), with issuance costs amounting to R$1,866 (US$580 on the transaction date). On December 28, 2017, GLA obtained a credit line of the same contract, in the amount of R$33,080 (US$10,000 on the transaction date), with issuance costs totaling R$1,909 (US$578 on the transaction date). Both credit lines have quarterly amortization and interest payments, and a financial guarantee from Ex-Im Bank.

Senior Notes VIII: On December 11, 2017, the Company, through its subsidiary Gol Finance, issued senior notes due in 2025, in the amount of R$1,642,000 (US$500,000 on the transaction date), with issuance costs totaling R$45,172 (US$17,283 on the transaction date). The Senior Notes are guaranteed by the Company’s sureties, with half-yearly interest payments of 7.00% p.a. The proceeds will be used to repurchase other Notes and for corporate purposes in general.

The other existing loans and financing of the Company have not been affected by contractual alterations during the year ended December 31, 2017.

16.3.Early repayment of debt during the year ended December 31, 2017

Safra: In the year ended December 31, 2017, Smiles Fidelidade fully paid its debt with Banco Safra, and the portion of the debt recorded as noncurrent was early repaid. As a result, the outstanding issuance costs of R$438 and the fine for the early repayment of the loan in the amount of R$137 were fully recorded in the financial result.

Senior Notes Tender Offer: As part of the debt restructuring process (as per Note 1), the Company used the proceeds from the issue of Senior Notes on December 11, 2017 to repurchase debt securities, as shown below:

F - 43

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

	Type	Transaction date	Previous balance	Payments	New issues	Closing balance	Premium paid (*)
Senior Notes II	Tender offer	12/29/2017	116,968	(21,191)	-	95,777	(422)
Senior Notes IV	Tender offer	12/11/2017	276,730	(185,197)	-	91,533	(12,071)
Senior Notes V	Prepayment	12/19/2017	14,685	(7,379)	-	7,306	-
Senior Notes VIII	Issuance	12/11/2017	-	-	482,717	482,717	-
Total in U.S. dollars			408,383	(213,767)	482,717	677,333	(12,493)
Total in Brazilian Reais			1,331,982	(707,141)	1,596,828	2,221,669	(41,327)

(*) Amounts recorded under “Exchange offer costs” in the financial results.

16.4.Finance leases

The future payments of finance agreements indexed to U.S. dollars are detailed as follows:

	12/31/2017	12/31/2016
2017	-	350,883
2018	333,795	328,931
2019	319,511	307,027
2020	267,477	267,885
2021	224,591	227,204
2022	119,200	115,367
Thereafter	326,823	292,362
Total minimum lease payments	1,591,397	1,889,659
Less total interest	(115,246)	(171,647)
Present value of minimum lease payments	1,476,151	1,718,012
Less current portion	(288,194)	(266,894)
Noncurrent portion	1,187,957	1,451,118

The discount rate used to calculate present value of the minimum lease payments was 4.04% as of December 31, 2017 (4.52% as of December 31, 2016). There are no significant differences between the present value of minimum lease payments and the fair value of these financial liabilities.

The Company extended the maturity date of the financing for some of its aircraft leased for 15 years using the SOAR framework (mechanism for extending financing amortization and repayment), which enables the performance of calculated withdrawals to be settled by payment in full at the end of the lease agreement. As of December 31, 2017, amounts of withdrawals for the repayment at maturity date of the lease agreements totaled R$255,644 (R$217,065 as of December 31, 2016) and are recorded in non-current debt.

17.Suppliers - Forfaiting

The Company has operations with Banco Safra that allow suppliers to receive their receivables in advance. This type of operation does not change the existing commercial conditions between the Company and its suppliers. Obligations to suppliers have a longer payment term and a discount rate of 1.03% p.m. As of December 31, 2017, the amount recorded under current liabilities totaled R$78,416.

18. Taxes payable

	12/31/2017	12/31/2016
PIS and COFINS	40,036	89,332
ICMS installments	-	4,852
Tax regularization program in installment payments - PRT and PERT	68,596	-
Withholding income tax on salaries	32,070	29,519
ICMS	45,492	43,226
Tax on import	3,454	3,454
IRPJ and CSLL payable	5,299	12,489
Other	6,200	6,105
Total	201,147	188,977
Current	134,951	146,174
Noncurrent	66,196	42,803

F - 44

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Brazilian tax regularization programs

In the year ended December 31, 2017, the Company and its subsidiary GLA entered into tax regularization programs:

(i)Tax Regularization Program (“PRT”) on March 10, 2017, pursuant to Provisional Presidential Decree No. 766 of January 4, 2017, including tax debts that matured on November 30, 2017. Under this program, GLA chose to pay 76% of its debt by using tax losses carryforward and the remaining 24% in 24 monthly installments adjusted based on the SELIC interest rate as of the month it adhered to the program.

(ii)Special Tax Regularization Program (“PERT”) in September 2017, pursuant to Provisional Presidential Decree No. 783 of May 31, 2017, including tax debts owed to the Brazilian Federal Tax Authorities and to the Office of the General Counsel for the Federal Treasury, which matured on April 30, 2017. Under this program, GLA chose, in September 2017, to pay 5% of total debt in five monthly installments and the remaining amount with tax losses carryforward after reducing interest by 90% and fines by 70%. For most of its debits, GLAI chose, in October 2017, to pay 20% of total debt in three installments and the remainder in 36 monthly installments, reducing interest by 50%, fines by 80% and legal charges by 100%.

The breakdown of the obligation included in the above-mentioned installment payment programs is as follows:

	2017
IPI on customs import	92,153
PIS and COFINS	98,491
PIS and COFINS on financial income (b)	131,844
Income and social contribution taxes	23,372
Other	4,655
Total debt	350,515
Reductions in interest and fines (c)	(21,249)
Use of tax losses carryforward (a)	(227,689)
Amount payable in installments	101,577

(a)Registered in "Other, net". See Note 8.2.

(b)Included in May 2017, after the PRT and PERT adoption.

(c)Reduction of 90% in interest and 50% in fines for PERT.

19.Advance ticket sales

As of December 31, 2017, the balance of Advance ticket sales classified in current liabilities was R$1,456,939 (R$1,185,945 as of December 31, 2016) and is represented by 4,964,925 tickets sold and not yet used (4,447,824 as of December 31, 2016) with an average use of 48 days (46 days as of December 31, 2016).

20.Mileage program

As of December 31, 2017, the balance of Smiles loyalty program deferred revenue was R$765,114 (R$781,707  as of December 31, 2016) and R$188,204 (R$219,325 as of December 31, 2016) classified in current and noncurrent liabilities, respectively.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

21.Provisions

	Insurance provision	Provision for aircraft and engine return (a)	Provision for legal proceedings (b)	Total
Balances as of December 31, 2015	742	725,176	144,355	870,273
Additional provisions recognized	4,237	97,423	189,244	290,904
Utilized provisions	(4,237)	(121,855)	(127,551)	(253,643)
Foreign exchange rate variation, net	-	(116,803)	(516)	(117,319)
Balances as of December 31, 2016	742	583,941	205,532	790,215
Additional provisions recognized (a)	(1)	38,819	158,263	197,081
Utilized provisions (b)	-	(220,082)	(155,999)	(376,081)
Foreign exchange rate variation, net	-	(1,827)	(199)	(2,026)
Balances as of December 31, 2017	741	400,851	207,597	609,189
As of December 31, 2016
Current	742	65,760	-	66,502
Noncurrent	-	518,181	205,532	723,713
Total	742	583,941	205,532	790,215
As of December 31, 2017
Current	741	45,820	-	46,561
Noncurrent	-	355,031	207,597	562,628
Total	741	400,851	207,597	609,189

(a) The additions of provisions for aircraft and engine return also include present value adjustment effects.

(b) include write-offs due to the revision of estimates and processes settled.

(a)Provision for aircraft and engine return

The provision for aircraft and engine return considers the costs that meet the contractual conditions for the return of engines maintained under operating leases, as well as the costs to reconfigure aircraft without purchase option as described in the return conditions of the lease contracts, and which is capitalized in property, plant and equipment (aircraft reconfigurations/overhauling).

(b)Provision for legal proceedings

As of December 31, 2017, the Company and its subsidiaries are parties to lawsuits and administrative proceedings. The lawsuits and administrative proceedings are classified into Operational (those arising from the Company’s normal course of operations), and Succession (those arising from the succession of former Varig S.A. obligations). 

The civil lawsuits are primarily related to compensation claims generally related to flight delays and cancellations, baggage loss and damage. The labor claims primarily consist of discussions related to overtime, hazard pay, risk premium and wage differences.

The provisions related to civil, labor and taxes suits, whose likelihood of loss is assessed as probable, are as follows:

F - 46

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

	12/31/2017	12/31/2016
Civil	67,528	73,356
Labor	137,071	132,163
Taxes	2,998	13
Total	207,597	205,532

Provisions are reviewed based on the progress of the proceedings and history of losses based on the best current estimate for labor and civil lawsuits.

There are other civil and labor lawsuits assessed by management and its legal counsel as possible risk of loss, in the estimated amount of R$30,945 for civil claims and R$124,062 for labor claims as of December 31, 2017 (R$31,598 and R$79,532 as of December 31, 2016, respectively), for which no provisions are recognized.

The tax lawsuits below were evaluated by the Company’s management and its legal counsels as being relevant and with possible risk of loss as of December 31, 2017 and 2016:

· GLA is discussing the non-incidence of the additional 1% COFINS rate on the imports of aircraft and parts, amounting R$48,596 (R$39,428 as of December 31, 2016). The Company’s legal counsel believes that the classification of possible risk was due to the fact that there was no express revocation of the tax relief (zero rate) granted to regular flight transportation companies.  

· Tax on Services (ISS) in the amount of R$21,222 (R$19,443 as of December 31, 2016) arising from assessment notices issued by the Municipality of São Paulo against the Company, in the period from January 2007 to December 2010 regarding a possible ISS taxation on partnerships. The classification of possible risk of loss is a result from the matters under discussion being interpretative, and involves discussions of factual and evidential materials, and has no final positioning of the Superior Courts.  

· Customs penalty in the amount of R$57,823 (R$45,689 as of December 31, 2016) relating to assessment notices issued against the Company for alleged breach of customs rules regarding procedures for temporary import of aircraft. The classification of possible risk is a result of the absence of a final positioning of the Superior Courts.  

· BSSF goodwill (BSSF Air Holdings) in the amount of R$104,213 (R$47,572 as of December 31, 2016) related to an infraction notice due to the deductibility of the goodwill allocated to future profitability. The classification of possible risk is a result of the absence of a final opinion from the Superior Courts.  

· GLA’s goodwill in the amount of R$80,198 (R$72,687 as of December 31, 2016) resulted from assessment notice related to the deductibility of the goodwill classified as future profitability. The classification of possible risk is a result of the absence of a final opinion from the Superior Courts.  

· GLAI had been discussing the non-incidence of taxation of PIS and COFINS on revenues generated by interest attributable to shareholders’ equity related to the years from 2006 to 2008, paid by its subsidiary GTA Transportes Aéreos S.A., succeeded by GLA on September 25, 2008, wich amount assessed as possible loss was R$57,793 as of December 31, 2016. However, due to a recent unfavorable decision in a similar case, the Company reclassified the likelihood of loss in this case from possible to probable. As a result, the Company adhered to the Installment Payment Program (PERT) after the Federal Government signed Provisional Presidential Decree 783/17 into Law, including the amount of R$34,794 in tax installment payments. Additionally, the Company maintains escrow deposits with Bic Banco with a partial guarantee on the lawsuit of R$32,120 as disclosed in Note 5, which will be redeemed after the installment payment is fully settled.   

· Tax on Industrialized Products (“IPI”): supposely levied on the importation of aircraft in the amount of R$115,136 as of December 31, 2016. On March 10, 2017, even though the lawsuit was not yet resolved in the administrative level, the Company included this tax in the PRT program, see Note 18, given that decisions in similar proceedings have not been favorable.  

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

There are other lawsuits that the Company’s Management and its legal counsels assess as possible risk of loss, in the estimated amount of R$58,750 (R$39,113 as of December 31, 2016) which added to the lawsuits mentioned above, totaled R$382,814 as of December 31, 2017 (R$436,861 as of December 31, 2016).

22.Equity

22.1. Capital stock

As of December 31, 2017, the Company’s capital stock was R$3,082,802 and represented by 3,129,582,142 shares, comprised by 2,863,682,710 common shares and 265,899,432 preferred shares. The Fundo de Investimento em Participações Volluto (“Fundo Volluto”) is the Company’s controlling shareholder, which is equally controlled by Constantino de Oliveira Junior, Henrique Constantino, Joaquim Constantino Neto and Ricardo Constantino.

The Company’s shares are held as follows:

	12/31/2017			12/31/2016
	Common	Preferred	Total	Common	Preferred	Total
Fundo Volluto	100.00%	49.25%	61.19%	100.00%	33.88%	61.28%
Delta Air Lines, Inc.	-	12.38%	9.47%	-	16.19%	9.48%
Airfrance - KLM	-	1.60%	1.22%	-	2.09%	1.22%
Treasury shares	-	0.10%	0.08%	-	0.44%	0.26%
Other	-	0.93%	0.71%	-	1.11%	0.65%
Free float	-	35.74%	27.33%	-	46.29%	27.11%
Total	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%

The authorized capital stock as of December 31, 2017 was R$4.0 billion. Within the authorized limit, the Company can, once approved by the Board of Directors, increase its capital regardless of any amendment to its by-laws, by issuing shares, without necessarily maintaining the proportion between the different types of shares. Under the law terms, in case of capital increase within the authorized limit, the Board of Directors will define the issuance conditions, including pricing and payment terms.

On December 22, 2017, Fundo Volluto, the Company’s controlling shareholder, converted 2,171,354,430 common shares into preferred shares of the Company and now holds 130,953,776 preferred shares (accounting for 49.22% of the Company’s total preferred shares as of December 31, 2017). This conversion of common shares into preferred shares does not change the interest held by Fundo Volluto and other shareholders in the Company’s capital stock.

During the year ended December 31, 2017, the Company approved capital increases from the subscription of preferred shares as a result of the exercise of stock options, in the amounts of: (i) R$1,177 as of August 8, 2017, related to the exercise of 244,185 stock options; (ii) R$1,492 as of October 17, 2017, related to the exercise of 230,581 stock options; and (iii) R$23 as of December 13, 2017, related to the exercise of 2,000 stock options.

22.2.Dividends

The Company’s By-laws provide for a mandatory minimum dividend to be paid to common and preferred shareholders, at least 25% of annual adjusted net income after compensation of accumulated losses and allocation to reserves in accordance with the Brazilian Corporate Law.

22.3. Treasury shares

During the year ended December 31, 2017, the Company transferred 615,181 restricted shares to its beneficiaries (632,976 restricted shares in the year ended December 31, 2016).                                                                                                             

As of December 31, 2017, the Company had 278,612 treasury shares, totaling R$4,168, with a market value of R$4,068 (893,793 treasury shares, totaling R$13,371, with a market value of R$4,129 as of December 31, 2016).

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

23.Revenue

	12/31/2017	12/31/2016	12/31/2015
Passenger transportation	9,479,242	8,948,170	8,954,034
Cargo	354,561	324,492	318,573
Mileage revenue	800,976	622,567	421,348
Other revenue (*)	657,609	652,602	690,044
Gross revenue	11,292,388	10,547,831	10,383,999
Related tax	(716,366)	(680,496)	(605,992)
Net revenue	10,576,022	9,867,335	9,778,007

(*) Includes revenues from unused passenger tickets, reissued tickets and cancellation of flight tickets of R$433,639,R$430,898, R$449,263, for the years ended December 31, 2017, 2016 and 2015, respectively                                            

Revenues are net of federal, state and municipal taxes, which are paid to the appropriate government entities.

Revenue by geographical location is as follows:

	12/31/2017	%	12/31/2016	%	12/31/2015	%
Domestic	9,044,990	85.5	8,395,364	85.1	8,670,023	88.7
International	1,531,032	14.5	1,471,971	14.9	1,107,984	11.3
Net revenue	10,576,022	100.0	9,867,335	100.0	9,778,007	100.0

24.Financial results

	12/31/2017	12/31/2016	12/31/2015
Financial income
Income from derivatives	35,053	120,403	174,693
Income from short-term investments	119,863	152,656	178,147
Monetary variation	14,208	12,411	14,531
(-) Taxes on financial income (a)	(24,393)	(23,041)	(47,588)
Gain from the exchange offer	-	286,799	-
Interest income	18,245	4,651	8,539
Other	50,470	14,625	4,245
Total financial income	213,446	568,504	332,567
Financial expenses
Losses from derivatives	(40,770)	(277,183)	(124,536)
Interest on short and long-term debt	(727,285)	(787,661)	(885,947)
Bank charges and expenses	(61,711)	(96,515)	(60,760)
Monetary variation	(2,993)	(3,867)	(3,921)
Tender offer costs (b)	(53,041)	-	-
Other (c)	(164,661)	(106,338)	(253,727)
Total financial expenses	(1,050,461)	(1,271,564)	(1,328,891)
Exchange rate variation, net	(81,744)	1,367,937	(2,266,999)
Total	(918,759)	664,877	(3,263,323)

(a) Relative to taxes on financial income (PIS and COFINS), according to Decree 8,426 of April 1, 2015.

(b) Refers to the tender offer of Senior Notes. Includes the write-off of issuance costs of the tendered debt of R$11,714.

(c) Includes the partial amount regarding the accrued interest in the amount of R$23,345 related to provisions for PIS and COFINS on interest attributable to shareholders’ equity, through the adherence to PERT, see Note 18.

25.Segments

Operating segments are defined based on business activities from which it may earn revenues and incur expenses, which operating results are regularly reviewed by the Company’s relevant decision makers to evaluate performance and allocate resources to the respective segments. The Company holds two operating segments: flight transportation and the Smiles loyalty program.

F - 49

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

The accounting policies of the operating segments are the same as those applied to the consolidated financial statements. Beginning in the year ended December 31, 2017, the Company is presenting the segment information of operating costs and expenses by nature. Additionally, the Company has distinct natures between its two operating segments, so there are no common costs and revenues between operating segments.

The Company is the controlling shareholder of Smiles Fidelidade, and the non-controlling interests of Smiles Fidelidade was 47.3%, 46.2% and 45.9% as of December 31, 2017, 2016 and 2015, respectively.

The information below presents the summarized financial position of the reportable operating segments as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015:

25.1.Assets and liabilities of the operating segments

	12/31/2017
	Flight transportation	Smiles loyalty program	Combined  information	Eliminations	Total consolidated
Assets
Current	2,389,146	1,901,672	4,290,818	(945,820)	3,344,998
Noncurrent	6,769,399	269,239	7,038,638	(378,888)	6,659,750
Total assets	9,158,545	2,170,911	11,329,456	(1,324,708)	10,004,748
Liabilities
Current	5,508,427	1,096,357	6,604,784	(854,739)	5,750,045
Noncurrent	7,131,078	202,835	7,333,913	(10,264)	7,323,649
Total equity (deficit)	(3,480,960)	871,719	(2,609,241)	(459,705)	(3,068,946)
Total liabilities and equity (deficit)	9,158,545	2,170,911	11,329,456	(1,324,708)	10,004,748

	12/31/2016
	Flight  transportation	Smiles loyalty program	Combined information	Eliminations	Total consolidated
Assets
Current	1,426,750	1,413,422	2,840,172	(759,458)	2,080,714
Noncurrent	6,474,404	513,456	6,987,860	(664,219)	6,323,641
Total assets	7,901,154	1,926,878	9,828,032	(1,423,677)	8,404,355
Liabilities
Current	4,767,322	1,061,806	5,829,128	(980,386)	4,848,742
Noncurrent	6,782,835	229,725	7,012,560	(100,196)	6,912,364
Total equity (deficit)	(3,649,003)	635,347	(3,013,656)	(343,095)	(3,356,751)
Total liabilities and equity (deficit)	7,901,154	1,926,878	9,828,032	(1,423,677)	8,404,355

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

25.2.Results of the operating segments

	12/31/2017
	Flight transportation	Smiles loyalty program (d)	Combined  information	Eliminations	Total  consolidated
Net revenue
Passenger (*)	8,785,938	-	8,785,938	399,867	9,185,805
Cargo and other (*)	768,566	-	768,566	(104,350)	664,216
Mileage revenue (*)	-	1,804,129	1,804,129	(1,078,128)	726,001
Total net revenue	9,554,504	1,804,129	11,358,633	(782,611)	10,576,022
Operating costs and expenses
Salaries	(1,654,388)	(53,723)	(1,708,111)	-	(1,708,111)
Aircraft fuel	(2,887,737)	-	(2,887,737)	-	(2,887,737)
Aircraft rent	(939,744)	-	(939,744)	-	(939,744)
Sales and marketing	(518,025)	(69,917)	(587,942)	(2,872)	(590,814)
Landing fees	(664,170)	-	(664,170)	-	(664,170)
Aircraft, traffic and mileage servicing	(649,126)	(990,685)	(1,639,811)	765,075	(874,736)
Maintenance, materials and repairs	(368,719)	-	(368,719)	-	(368,719)
Depreciation and amortization	(491,806)	(13,619)	(505,425)	-	(505,425)
Passenger service expenses	(437,045)	-	(437,045)	-	(437,045)
Other operating expenses	(591,087)	(26,385)	(617,472)	7,162	(610,310)
Total operating costs and expenses	(9,201,847)	(1,154,329)	(10,356,176)	769,365	(9,586,811)
Equity results	395,245	-	395,245	(394,701)	544
Operating result before financial result, net and income taxes	747,902	649,800	1,397,702	(407,947)	989,755
Financial results
Financial income	184,448	205,431	389,879	(176,433)	213,446
Financial expenses	(1,225,315)	(2,201)	(1,227,516)	177,055	(1,050,461)
Exchange rate variation, net	(78,462)	(3,284)	(81,746)	2	(81,744)
Total financial results	(1,119,329)	199,946	(919,383)	624	(918,759)
Income (loss) before income taxes	(371,427)	849,746	478,319	(407,323)	70,996
Income taxes	390,611	(89,131)	301,480	5,733	307,213
Net income for the year	19,184	760,615	779,799	(401,590)	378,209
Attributable to equity holders of the parent	19,184	401,590	420,774	(401,590)	19,184
Attributable to non-controlling interests of Smiles	-	359,025	359,025	-	359,025

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

	12/31/2016
	Flight transportation	Smiles loyalty program	Combined  information	Eliminations	Total  consolidated
Net revenue
Passenger (*)	8,340,545	-	8,340,545	330,897	8,671,442
Cargo and other (*)	729,096	-	729,096	426	729,522
Mileage revenue (*)	-	1,548,109	1,548,109	(1,081,738)	466,371
Total net revenue	9,069,641	1,548,109	10,617,750	(750,415)	9,867,335
Operating costs and expenses
Salaries	(1,615,740)	(41,045)	(1,656,785)	-	(1,656,785)
Aircraft fuel	(2,695,390)	-	(2,695,390)	-	(2,695,390)
Aircraft rent	(996,945)	-	(996,945)	-	(996,945)
Sales and marketing	(494,076)	(61,908)	(555,984)	-	(555,984)
Landing fees	(687,366)	-	(687,366)	-	(687,366)
Aircraft, traffic and mileage servicing	(660,009)	(828,887)	(1,488,896)	735,399	(753,497)
Maintenance, materials and repairs	(593,090)	-	(593,090)	-	(593,090)
Depreciation and amortization	(439,173)	(8,495)	(447,668)	-	(447,668)
Passenger service expenses	(461,837)	-	(461,837)	-	(461,837)
Other operating expenses	(316,766)	(4,197)	(320,963)	15	(320,948)
Total operating costs and expenses	(8,960,392)	(944,532)	(9,904,924)	735,414	(9,169,510)
Equity results	287,134	(2,530)	284,604	(285,884)	(1,280)
Operating result before financial result, net and income taxes	396,383	601,047	997,430	(300,885)	696,545
Financial results
Financial income	395,901	212,758	608,659	(40,155)	568,504
Financial expenses	(1,311,940)	(168)	(1,312,108)	40,544	(1,271,564)
Exchange rate variation, net	1,362,145	5,792	1,367,937	-	1,367,937
Total financial results	446,106	218,382	664,488	389	664,877
Income before income taxes	842,489	819,429	1,661,918	(300,496)	1,361,422
Income taxes	7,130	(271,156)	(264,026)	4,968	(259,058)
Net income for the year	849,619	548,273	1,397,892	(295,528)	1,102,364
Attributable to equity holders of the parent	849,619	295,528	1,145,147	(295,528)	849,619
Attributable to non-controlling interests of Smiles	-	252,745	252,745	-	252,745

F - 52

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

	12/31/2015
	Flight  transportation	Smiles loyalty program	Combined information	Eliminations	Total consolidated
Net revenue
Passenger (*)	8,294,463	-	8,294,463	288,925	8,583,388
Cargo and other (*)	941,928	47,199	989,127	(19,198)	969,929
Miles revenue (*)	-	1,172,322	1,172,322	(947,632)	224,690
Total net revenue	9,236,391	1,219,521	10,455,912	(677,905)	9,778,007
Operating costs and expenses
Salaries	(1,544,157)	(36,374)	(1,580,531)	-	(1,580,531)
Aircraft fuel	(3,301,368)	-	(3,301,368)	-	(3,301,368)
Aircraft rent	(1,100,086)	-	(1,100,086)	-	(1,100,086)
Sales and marketing	(566,329)	(51,074)	(617,403)	-	(617,403)
Landing fees	(681,378)	-	(681,378)	-	(681,378)
Aircraft, traffic and mileage servicing	(615,792)	(700,200)	(1,315,992)	637,917	(678,075)
Maintenance, materials and repairs	(603,925)	-	(603,925)	-	(603,925)
Depreciation and amortization	(416,856)	(2,835)	(419,691)	-	(419,691)
Passenger service expenses	(481,765)	-	(481,765)	-	(481,765)
Other operating expenses	(485,738)	(13,183)	(498,921)	5,300	(493,621)
Total operating costs and expenses	(9,797,394)	(803,666)	(10,601,060)	643,217	(9,957,843)
Equity results	179,377	(5,932)	173,445	(177,386)	(3,941)
Operating result before financial result, net and income taxes	(381,626)	409,923	28,297	(212,074)	(183,777)
Financial results
Financial income	287,058	156,042	443,100	(110,533)	332,567
Financial expenses	(1,424,321)	(15,104)	(1,439,425)	110,534	(1,328,891)
Exchange rate variation, net	(2,264,750)	(2,248)	(2,266,998)	(1)	(2,266,999)
Total financial results	(3,402,013)	138,690	(3,263,323)	-	(3,263,323)
Income (loss) before income taxes	(3,783,639)	548,613	(3,235,026)	(212,074)	(3,447,100)
Income taxes	(677,244)	(178,691)	(855,935)	11,795	(844,140)
Net income (loss) for the year	(4,460,883)	369,922	(4,090,961)	(200,279)	(4,291,240)
Attributable to equity holders of the parent	(4,460,883)	200,279	(4,260,604)	(200,279)	(4,460,883)
Attributable to non-controlling interests of Smiles	-	169,643	169,643	-	169,643

(*) Eliminations are related to transactions between GLA and Smiles Fidelidade.

In the stand alone financial statements of the subsidiary Smiles Fidelidade, which represents the segment Smiles Loyalty Program, and in the information provided to the relevant decision makers, the revenue recognition occurs upon redemption of the miles by the participants. Under the perspective of Smiles Fidelidade, this measurement is appropriate given that this is when the revenue recognition cycle is complete. At this point, Smiles has transferred to its suppliers the obligation to provide services or deliver products to its customers.

However, from a consolidated perspective, the revenue recognition cycle related to miles exchanged for flight tickets is only complete when the passengers are effectively transported. Therefore, for purposes of reconciliation with the consolidated assets, liabilities and income and expenses, as well as for purposes of equity method of accounting and for consolidation purposes, the Company performed, in addition to elimination entries, consolidating adjustments to adjust the accounting practices related to Smiles’ revenues. In this case, under the perspective of the consolidated financial statements, the mileages that were used to redeem airline tickets are only recognized as revenue when passengers are transported, in accordance with accounting practices and policies adopted by the Company.

F - 53

Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

26.Commitments

As of December 31, 2017, the Company had 120 firm orders for aircraft acquisition with Boeing. These aircraft acquisition commitments include estimates for contractual price increases during the construction phase. As of December 31, 2017, the approximate amount of firm orders, not including contractual discounts, was R$45,090,382 (US$13,630,708), and are segregated according to the following years:

	12/31/2017	12/31/2016
2018	-	1,787,388
2019	1,117,604	2,917,833
2020	4,538,258	4,471,172
2021	6,198,259	6,106,634
2022	6,353,457	6,229,538
Thereafter	26,882,804	26,519,864
Total	45,090,382	48,032,429

As of December 31, 2017, from the total order commitments mentioned above, the Company had the amount of R$6,463,564 (US$1,953,919) related to advances for aircraft acquisition to be disbursed, in accordance with the following schedule:

	12/31/2017	12/31/2016
2017	-	286,829
2018	316,215	483,518
2019	773,268	658,930
2020	848,003	835,468
2021	852,458	839,856
2022	866,119	853,316
Thereafter	2,807,501	2,766,624
Total	6,463,564	6,724,541

The installment financed by long-term debt with aircraft guarantee through the U.S. Ex-Im Bank corresponds approximately to 85% of the aircraft total cost. Other establishments finance the acquisitions with equal or higher percentages, reaching up to 100%. 

The Company performs payments related to aircraft acquisition through its own funds, short and long-term debt, cash provided by operating activities, short and medium-term lines of credit and supplier financing.

The Company leases its entire aircraft fleet through a combination of operating and finance leases. As of December 31, 2017, the total fleet leased was comprised of 119 aircraft, of which 88 were under operating leases and 31 were recorded as finance leases. During the year ended December 31, 2017, the Company returned 11 aircraft under operating lease contracts. In addition, the Company changed the classification of three finance lease agreements, which are now classified as operating leases due to the new characteristics arising from the renewal of these contracts.

As of December 31, 2017, the Company recorded operating lease installments in the amount of R$139,110, of which R$28,387 under current liabilities and R$110,723 under noncurrent liabilities (R$7,233 was recorded under current liabilities as of December 31, 2016). Such amounts refer to negotiations with lessors that resulted in postponement of the original payment flows of the leases.

On February 14, 2017 and November 27, 2017, the Company entered in sale-leaseback transactions for 10 aircraft with AWAS and GECAS. The aircraft should be delivered between June 2018 and August 2019 and, pursuant to the agreement, the leases will have a 12-year term as of the arrival date of each aircraft. Under these agreements, AWAS and GECAS undertake to carry out all necessary disbursements to pay for advances based on the disbursement schedule of the aircraft acquisition agreement. Under the same agreement, the Company shall act as a guarantor for the transaction if AWAS and GECAS fail to comply with the commitments established in such agreements.

26.1. Operating leases

The future payments of non-cancelable operating lease contracts are denominated in U.S. dollars, and are as follows:

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

	12/31/2017	12/31/2016
2017	-	857,747
2018	858,508	839,343
2019	928,226	889,940
2020	888,944	873,692
2021	746,595	745,719
2022	630,477	646,388
Thereafter	1,251,964	1,393,896
Total minimum lease payments	5,304,714	6,246,725

26.2. Sale-leaseback transactions

In the year ended December 31, 2017, the Company did not enter in sale-leaseback transactions (net gain of R$233,483 related to 7 aircraft in the year ended December 31, 2016).

Additionally, the Company also has balances of deferred losses from transactions carried out between 2006 and 2009, in the amount of R$2,887 (R$9,959 as of December 31, 2016).

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

27.Financial instruments and risk management

The Company and its subsidiaries have financial asset and financial liability transactions, which consist in part of derivative financial instruments. The financial derivative instruments are used to hedge against the inherent risks related to the Company’s operations. The Company and its subsidiaries consider as most relevant risks: fuel price, foreign currency and interest rate. These risks can be mitigated by using exchange swap derivatives, futures and options contracts based on oil, U.S. dollar and interest markets. The contracts may be held by exclusive investment funds, as described in the Company’s Risk Management Policy.

Financial instruments are managed by the Risk Committee in line with the Risk Management Policy approved by the Risk Policy Committee and submitted to the Board of Directors. The Risk Policy Committee sets guidelines and limits, monitors controls, including mathematical models used to continuously monitor exposures and possible financial effects, and also prevents the execution of speculative financial instruments transactions.

The Company does not hedge its total risk exposure, and is, therefore, subject to market fluctuations for a significant portion of its exposed assets and liabilities. Decisions on the portion to be protected consider the financial risks and the costs for such protection and are determined and reviewed at least quarterly in line with Risk Policy Committee strategies. The results from operations and the application of risk management controls are part of the monitoring process by the Risk Policy Committee and have been satisfactory to the proposed objectives.

The description of the consolidated account balances and the categories of financial instruments included in the statements of financial position as of December 31, 2017 and 2016 is as follows:

	Measured at fair value through profit or loss		Loans and receivables (financing) (c)
	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Assets
Cash and cash equivalents (a)	434,295	269,797	592,567	292,410
Short-term investments (a)	955,589	431,233	-	-
Restricted cash	268,047	168,769	-	-
Derivatives assets	40,647	3,817	-	-
Trade receivables	-	-	936,478	760,237
Deposits (b)	-	-	655,244	756,810
Other assets	-	-	123,721	118,058
Liabilities
Debt	-	-	7,105,667	6,379,220
Suppliers	-	-	1,471,150	1,111,514
Derivatives liabilities	34,457	89,211	-	-
Operating leases	-	-	139,110	7,233

(a)The Company manages its financial investments to pay its short-term operational expenses.

(b)Excludes judicial deposits, as described in Note 9.

(c)Items classified as amortized cost refer to credits, debt with private institutions which, in any early settlement, there are no substantial alterations in relation to the values recorded, except the amounts related to Perpetual Notes and Senior Notes, as disclosed in Note 16. The fair values approximate the book values, according to the short-term maturity period of these assets and liabilities. During the year ended December 31, 2017, there was no change on the classification between categories of the financial instruments.

As of December 31, 2017 and 2016, the Company did not have financial assets classified as available for sale.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

The Company's derivative financial instruments were recognized as follows:

	Fuel	Foreign currency	Interest rate	Equity forward (**)	Total
Derivative assets (liabilities) as of December 31, 2015 (*)	-	1,766	(141,443)	-	(139,677)
Fair value variations:
Net gains (losses) recognized in profit or loss (a)	309	(40,931)	(1)	-	(40,623)
Losses recognized in other comprehensive income (loss)	-	-	(4,842)	-	(4,842)
Settlements during the year	3,508	39,165	57,075	-	99,748
Derivative assets (liabilities) as of December 31, 2016 (*)	3,817	-	(89,211)	-	(85,394)
Fair value variations:
Net gains recognized in profit or loss (a)	13,768	-	-	11,094	24,862
Losses recognized in other comprehensive income (loss)	35,505	-	(1,093)	-	34,412
Settlements (payments received) during the year	(12,443)	-	55,847	(11,094)	32,310
Derivative assets (liabilities) as of December 31, 2017 (*)	40,647	-	(34,457)	-	6,190
Changes in other comprehensive income (loss)
Balances as of December 31, 2015	-	-	(178,942)	-	(178,942)
Fair value adjustments during the year	-	-	(4,842)	-	(4,842)
Net reversal to profit or loss (b)	-	-	128,731	-	128,731
Tax effects	-	-	(92,179)	-	(92,179)
Balances as of December 31, 2016	-	-	(147,229)	-	(147,229)
Fair value adjustments during the year	35,505	-	(1,093)	-	34,412
Net reversal to profit or loss (b)	-	-	33,501	-	33,501
Balances as of December 31, 2017	35,505	-	(114,821)	-	(79,316)
Effects on profit or loss (a-b)	13,768	-	(33,501)	11,094	(8,639)
December 31, 2017
Recognized in operating costs and expenses	8,626	-	(11,548)	-	(2,922)
Recognized in financial results	5,142	-	(21,953)	11,094	(5,717)
December 31, 2016
Recognized in operating costs and expenses	-	-	(12,574)	-	(12,574)
Recognized in financial results	309	(40,931)	(116,158)	-	(156,780)
December 31, 2015
Recognized in operating costs and expenses	-	-	(13,150)	-	(13,150)
Recognized in financial results	(29,964)	102,696	(22,575)	-	50,157

(*)  Classified as "Derivatives assets" if the amount results in an asset or "Derivatives liabilities" if the amount results in a liability.

(**) In 2017, the Company carried out transactions with shares of third-party companies traded on B3 in the amount of R$106,976, and contracted a term derivative attached to the transaction, in order to minimize the risk of volatility of the shares borrowed in the market. This operation was fully settled with the respective derivative in December 2017.

The Company may adopt hedge accounting for derivatives contracted to hedge interest rate risk classified as "cash flow hedge" and that qualify for this classification as per IAS 39. As of December 31, 2017, the Company adopts cash flow hedge for the interest rate (mainly Libor interest rates) and jet fuel.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

The cash flow hedge is programmed to be recycled to profit or loss in the periods stated bellow:

	2018	2019	2020	2021	2022	Thereafter
Interest rate	(14,028)	(15,099)	(14,062)	(12,328)	(11,013)	(48,291)
Fuel	35,505	-	-	-	-	-
Recycle expectation (*)	21,477	(15,099)	(14,062)	(12,328)	(11,013)	(48,291)

(*) The positive amounts represent receivables and the negative amounts represent payables.

27.1.Market risks

a)Fuel price risk

The aircraft fuel prices fluctuate due to the volatility of the price of crude oil by product price fluctuations. To mitigate the risk of fuel price, the Company held the purchase option attached to WTI, as of December 31, 2017. In the year ended December 31, 2017, the Company recognized total gains of R$13,768 (gain of R$309 in the year ended December 31, 2016 and loss of R$29,964 in the year ended December 31, 2015) with fuel hedge transactions.

In the year ended December 31, 2017, the Company held derivatives operations designated as “hedge accounting” (as of December 31, 2016 and 2015, the Company did not hold derivatives operations designated as “hedge accounting”).

b)Foreign currency risk

Foreign currency risk derives from the possibility of unfavorable fluctuation of foreign currencies to which the Company’s liabilities or cash flows are exposed. As of December 31, 2017, the Company had no outstanding derivative financial instruments. The Company recognized a loss on foreign currency derivatives in the amount of R$40,931 for the year ended December 31, 2016 and gain of R$102,969 in the year ended December 31, 2015). The Company does not have foreing currency derivatives designated as “hedge accounting”.

The Company’s foreign currency exposure is summarized below:

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

	12/31/2017	12/31/2016
Assets
Cash and cash equivalents, short-term investments and restricted cash	1,215,716	548,792
Trade receivables	126,140	104,800
Deposits	655,244	756,810
Derivatives	40,647	3,817
Other assets	-	10,184
Total assets	2,037,747	1,424,403
Liabilities
Short and long-term debt	4,593,169	3,596,379
Finance leases	1,476,151	1,718,012
Foreign suppliers	644,775	344,654
Derivatives	34,457	89,211
Operating leases	139,110	7,233
Total liabilities	6,887,662	5,755,489
Exchange exposure	4,849,915	4,331,086
Commitments not recorded in the statements of financial position
Future commitments resulting from operating leases	5,304,714	6,246,725
Future commitments resulting from firm aircraft orders	45,090,382	48,032,429
Total	50,395,096	54,279,154
Total foreign currency exposure - R$	55,245,011	58,610,240
Total foreign currency exposure - US$	16,700,426	17,983,566
Exchange rate (R$/US$)	3.3080	3.2591

The Company’s foreign currency exposure mainly comprises U.S. Dollar rate.

c)Interest rate risk

The Company is mainly exposed to lease transactions indexed to variations in the Libor rate until the aircraft is received. To mitigate such risks, the Company has derivative financial instruments of interest rate (Libor) swaps. During the year ended December 31, 2017, the Company recognized a total loss with interest hedging transactions in the amount of R$33,501 (loss of R$128,732 and R$35,725 in the years ended December 31, 2016 and 2015, respectively).

As of December 31, 2017, 2016 and 2015, the Company and its subsidiaries had interest rate swap derivatives recorded as hedge accounting.

27.2.Credit risk

The credit risk is inherent in the Company’s operating and financing activities, mainly represented by cash and cash equivalents, short-term investments and trade receivables. Financial assets classified as cash, cash equivalents and short-term investments are deposited with counterparties rated investment grade or higher by S&P or Moody's (between AAA and AA-), pursuant to risk management policies. The financial institutions in which the Company concentrates more than 10% of its total financial assets are Itaú and Banco do Brasil. Other assets are diluted among other financial institutions, pursuant to the Company’s risk policy.  Trade receivables consists of amounts falling due from credit card operators, travel agencies, installment sales and government entities, which leaves the Company exposed to a small portion of the credit risk of individuals and other entities. Credit limits are set for all customers based on internal credit rating criteria and carrying amounts represent the maximum credit risk exposure. Customer creditworthiness is assessed based on an internal system of extensive credit rating. Outstanding trade receivables are frequently monitored by the Company.  

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Derivative financial instruments are contracted in the over-the-counter market (OTC) with counterparties rated investment grade or higher, or in a commodities and futures exchange (B3 or NYMEX), thus substantially mitigating credit risk. The Company's obligation is to evaluate counterparty risk involved in financial instruments and periodically diversify its exposure.

27.3.Liquidity risk

The Company is exposed to two distinct forms of liquidity risk: (i) market prices, which vary in accordance with the types of assets and markets where they are traded, and (ii) cash flow liquidity risk related to difficulties in meeting the contracted operating obligations at the maturity dates. In order to manage liquidity risk, the Company invests its funds in liquid assets (government bonds, CDBs and investment funds with daily liquidity) and its Cash Management Policy requires the weighted average maturity of its debt to be longer than the weighted average term of its investment portfolio term.

The schedules of financial liability hold by the Company as of December 31, 2017 and 2016 is as follows:

	Less than 6  months	6 - 12 months	1 - 5 years	More than 5 years	Total
Short and long-term debt	369,496	793,376	2,651,018	3,291,777	7,105,667
Suppliers	1,245,352	3,772	222,026	-	1,471,150
Suppliers - Forfaiting	78,416	-	-	-	78,416
Derivatives liabilities	34,457	-	-	-	34,457
Operating leases	28,387	-	110,723	-	139,110
As of December 31, 2017	1,756,108	797,148	2,983,767	3,291,777	8,828,800
Short and long-term debt	499,542	335,748	2,654,007	2,889,923	6,379,220
Suppliers	1,097,997	-	13,517	-	1,111,514
Derivatives liabilities	89,211	-	-	-	89,211
Operating leases	3,215	4,018	-	-	7,233
As of December 31, 2016	1,689,965	339,766	2,667,524	2,889,923	7,587,178

27.4.Capital management

The Company seeks alternatives to capital in order to meet its operational needs, aiming a capital structure that takes into account suitable parameters for the financial costs, the maturities of funding and its guarantees. The Company monitors its financial leverage ratio, which corresponds to net debt, including short and long-term debt. The table below shows the Company’s capital management as of December 31, 2017 and 2016:

	12/31/2017	12/31/2016
Short and long-term debt	7,105,667	6,379,220
(-) Cash and cash equivalents	(1,026,862)	(562,207)
(-) Short-term investments	(955,589)	(431,233)
(-) Restricted cash	(268,047)	(168,769)
A - Net debt	4,855,169	5,217,011
B – Total deficit	(3,068,946)	(3,356,751)
C = (B + A) - Total capital and net debt	1,786,223	1,860,260

27.5.Sensitivity analysis of financial instruments

The Company also analyzes the impact of the financial instrument fluctuation on the profit or loss and total equity considering:

· Increase and decrease by 25% and -50% in fuel prices, by keeping all the other variables constant;

·    Increase and decrease by 25% and -50% in the U.S. dollar exchange rate, by keeping all the other variables constant;

·             Increase and decrease by 25% and -50% in the Libor interest rate, by keeping all the other variables constant.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

The estimates presented do not necessarily reflect the amounts to be reported in future financial statements. The use of different methodologies and/or assumptions may have a material effect on the estimates presented.

The tables below show the sensitivity analysis of foreign currency exposure, derivatives positions and interest rates on December 31, 2017 to market risks considered relevant by Management. In the tables, positive values are displayed as asset exposures (assets higher than liabilities) and negative values are exposed liabilities (liabilities greater than assets).

a)Fuel risk

The Company and its subsidiaries contract crude oil derivatives (WTI, Brent) and its byproducts (Heating Oil) to hedge fluctuations in jet fuel prices. Historically, oil prices are highly correlated with aircraft fuel prices.

	1Q18	2Q18	3Q18	4Q18	Total 12M
Percentage of fuel exposure hedged	27%	10%	6%	5%	12%
Amount in barrels (thousand barrels)	855	360	220	163	1,598
Future rate agreed per barrel (US$)	51.89	51.33	51.46	51.58	51.67
Total in thousands of Brazilian Reais	146,760	61,124	37,453	27,813	273,120

b)Foreign currency risk

As of December 31, 2017, the Company adopted the closing exchange rate of R$3.3080/US$1.00 as likely scenario. The table below shows the sensitivity analysis and the effect on profit or loss of exchange rate fluctuations in the exposure amount of the period as of December 31, 2017:

	Exchange rate	Effect on profit/loss
Net liabilities exposed to the risk of appreciation of the U.S. dollar (R$3.3080/US$1.00)	3.3080	(4,849,915)
Dollar depreciation (-50%)	1.6540	2,424,957
Dollar depreciation (-25%)	2.4810	1,212,479
Dollar appreciation (+25%)	4.1350	(1,212,479)
Dollar appreciation (+50%)	4.9620	(2,424,957)

c)Interest rate risk

As of December 31, 2017, the Company holds financial investments and financial liabilities indexed to several rates, and position in Libor derivatives. In the sensitivity analysis of non-derivative financial instruments, it was considered the impacts on yearly interest of the exposed values as of December 31, 2017 (see Note 16)arising from fluctuations in interest rates, according to the scenarios presented below. The amounts show the impacts on profit or loss according to the scenarios presented below:

	Financial debt net of short-term investments (a)		Derivatives (c)
Risk	Increase in the CDI rate	Decrease in the Libor rate	Decrease in the  Libor rate
Referential rates	6.89%	1.69%	1.69%
Exposure amount (probable scenario) (b)	1,129,300	(287,608)	(34.457)
Possible adverse scenario (+25%)	90,595	(6,091)	(730)
Remote adverse scenario (+50%)	108,714	(7,309)	(876)

(a)Total invested and raised in the financial market at the CDI rate. A negative amount means more debt than investment.

(b)Balances recorded on December 31, 2017.

(c)Derivatives contracted to hedge the Libor rate variation embedded in the agreements for future delivery of aircraft.

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

Measurement of the fair value of financial instruments

In order to comply with the disclosure requirements for financial instruments measured at fair value, the Company and its subsidiaries must classify its instruments in Levels 1 to 3, based on observable fair value levels:

·Level 1: Fair value measurements are calculated based on quoted prices (without adjustment) in active market or identical liabilities;

·Level 2: Fair value measurements are calculated based on other variables besides quoted prices included in Level 1, that are observable for the asset or liability directly (such as prices) or indirectly (derived from prices); and

·Level 3: Fair value measurements are calculated based on valuation methods that include the asset or liability but that are not based on observable market variables (unobservable inputs).

The following table shows a summary of the Company’s and its subsidiaries’ financial instruments measured at fair value, including their related classifications of the valuation method, as of December 31, 2017 and 2016:

		12/31/122017		12/31/2016
	Fair value level	Book value	Fair value	Book value	Fair value
Cash and cash equivalents	Level 2	434,295	434,295	269,797	269,797
Short-term investments	Level 1	32,701	32,701	41,104	41,104
Short-term investments	Level 2	922,888	922,888	390,129	390,129
Restricted cash	Level 2	268,047	268,047	168,769	168,769
Derivatives assets	Level 2	40,647	40,647	3,817	3,817
Derivatives liabilities	Level 2	(34,457)	(34,457)	(89,211)	(89,211)

28.Changes in liabilities arising from financing activities

The changes in liabilities arising from financing activities in the years ended December 31, 2017, 2016 and 2015 are as follows:

12/31/2017
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Interest paid on loans	Import financing	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	6,379,220	612,396	-	(505,105)	63,066	68,895	502,529	(15,334)	7,105,667
Non-controlling interests from Smiles	293,247	(254,892)	359,025	-	-	-	-	14,633	412,013
Capital stock	3,080,110	2,692	-	-	-	-	-	-	3,082,802
Share issuance costs	(155,618)	(523)	-	-	-	-	-	523	(155,618)

12/31/2016
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Repurchase of debt securities	Interest paid on loans	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	9,304,926	(890,559)	-	(286,799)	(606,405)	(1,220,608)	627,672	(549,007)	6,379,220
Non-controlling interests from Smiles	224,022	(171,829)	252,745	-	-	-	-	(11,691)	293,247
Capital stock	3,080,110	-	-	-	-	-	-	-	3,080,110
Share issuance costs	(155,223)	(395)	-	-	-	-	-	-	(155,618)

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Gol Linhas Aéreas Inteligentes S.A.

Notes to the consolidated financial statements

For the years ended December 31, 2017, 2016 and 2015

(In thousands of Brazilian Reais - R$, except when otherwise indicated)

12/31/2015
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Repurchase of debt securities	Interest paid on loans	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	6,235,239	426,973	-	-	(548,773)	(2,337,999)	600,410	253,078	9,304,926
Non-controlling interests from Smiles	185,413	(136,822)	169,643	-	-	-	-	5,788	224,022
Capital stock	2,618,799	465,048	-	-	-	-	-	(3,737)	3,080,110
Share issuance costs	(150,214)	(5,009)	-	-	-	-	-	-	(155,223)

29.Insurance

As of December 31, 2017, insurance coverage by nature, considering the aircraft fleet and related to the maximum reimbursable amounts indicated in U.S. dollars, along with Smiles’ insurance coverage, is as follows:

Aviation	In thousands of Brazilian Reais	In thousands of U.S. dollars
GLA
Guarantee - hull/war	12,504,240	3,780,000
Civil liability per event/aircraft (*)	2,481,000	750,000
Inventories (local) (*)	992,400	300,000
Smiles
Rent insurance (Rio Negro – Alphaville complex)	1,470	-
D&O liability insurance	50,000	-
Fire insurance (Property insurance Rio Negro – Alphaville complex)	9,025	-

(*)   Values per incident and annual aggregate.

Pursuant to Law No. 10,744 of October 9, 2003, the Brazilian government assumed the commitment to complement any civil-liability expenses related to third parties caused by war or terrorist events, in Brazil or abroad, which GLA may be required to pay, for amounts exceeding the limit of the insurance policies effective since September 10, 2001, limited to the amount in Brazilian Reais equivalent to US$1.0 billion.

30.Subsequent events

On January 16, 2018, the subsidiary Gol Finance approved a tender offer of up to US$50 milion of the Senior Notes due in 2020.

On January 30, 2018, the offering of Senior Notes by Gol Finance was approved, in the amount of US$150 milion, due in 2025, which priced on February 2, 2018. The new Notes will be consolidated with, and form a single series with, the US$500 milion aggregate principal amount of notes that were originally issued on December 11, 2017, raising the outstanding total on the tranche to US$650 milion. Gol Finance will use part of the proceeds from the Senior Notes due in 2025 to fully redeem the Senior Notes due in 2020 that were offered after the Tender Offer and pay related costs and expenses.

Pursuant to a share repurchase program announced on April 10, 2018, to comply with the Company's restricted shares plan, the Company repurchased, through transactions on the B3, 740,000 preferred shares, representing 0.2776% of the total preferred shares issued and 0.2124% of the Company's capital stock, calculated considering the ratio of 35:1 of dividend rights of holders of common shares to those of holders of preferred shares. As a result of these repurchases, the Company holds 1,018,612 preferred shares in treasury, representing 0.3821% of the total preferred shares issued and 0.2924% of our capital stock. The Company terminated the share repurchase program on April 19, 2018.

F - 63

SIGNATURES

The Company hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on Form 20-F on its behalf.

GOL LINHAS AÉREAS INTELIGENTES S.A.

By:               /s/ Paulo Sergio Kakinoff
Name:Paulo Sergio KakinoffTitle:Chief Executive Officer

GOL LINHAS AÉREAS INTELIGENTES S.A.

By:               /s/ Richard F. Lark, Jr.
Name:Richard F. Lark, Jr.Title:Chief Financial Officer

Dated: May 30, 2018

EX-12.1

 

EXHIBIT 12.1

CERTIFICATION

I, Paulo Sergio Kakinoff, certify that:

1. I have reviewed this annual report on Form 20-F of GOL LINHAS AÉREAS INTELIGENTES S.A.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: May 30, 2018

By:               /s/ Paulo Sergio Kakinoff
Name:Paulo Sergio KakinoffTitle:Chief Executive Officer

EX-12.2

 

EXHIBIT 12.2

CERTIFICATION

I, Richard F. Lark, Jr., certify that:

1. I have reviewed this annual report on Form 20-F of GOL LINHAS AÉREAS INTELIGENTES S.A.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: May 30, 2018

By:               /s/ Richard F. Lark, Jr.
Name:Richard F. Lark, Jr.Title:Chief Financial Officer

EX-13.1

 

EXHIBIT 13.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TOSECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

 In connection with the Annual Report of GOL LINHAS AÉREAS INTELIGENTES S.A. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2017, as filed with the U.S. Securities and Exchange Commission on April 30, 2018 and amended on the date hereof (the “Report”), I, Paulo Sergio Kakinoff, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the U.S. Sarbanes Oxley Act of 2002, that to the best of my knowledge:

 (i) the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

 (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 30, 2018

By:         /s/ PauloSergio Kakinoff
Name:Paulo Sergio KakinoffTitle:Chief Executive Officer

EX-13.2

 

EXHIBIT 13.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TOSECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

 In connection with the Annual Report of GOL LINHAS AÉREAS INTELIGENTES S.A. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2017, as filed with the U.S. Securities and Exchange Commission on April 30, 2018 and amended on the date hereof (the “Report”), I, Richard F. Lark, Jr., certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the U.S. Sarbanes Oxley Act of 2002, that to the best of my knowledge:

 (i) the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

 (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 30, 2018

By:               /s/ Richard F. Lark, Jr.
Name:Richard F. Lark, Jr.Title:Chief Financial Officer

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2017 shares
Document And Entity Information
Entity Registrant Name	Gol Intelligent Airlines Inc.
Entity Central Index Key	0001291733
Document Type	20-F
Trading Symbol	GOL
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	2,863,682,710
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2017

XML

Consolidated statements of financial position - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	R$ 1,026,862	R$ 562,207
Short-term investments	955,589	431,233
Trade receivables	936,478	760,237
Inventories	178,491	182,588
Recoverable taxes	83,210	27,287
Derivatives	40,647	3,817
Other current assets	123,721	113,345
Total current assets	3,344,998	2,080,714
Noncurrent assets
Deposits	1,163,759	1,188,992
Restricted cash	268,047	168,769
Recoverable taxes	7,045	72,060
Deferred taxes	276,514	107,159
Other noncurrent assets	0	4,713
Investments	1,333	17,222
Property, plant and equipment	3,195,767	3,025,010
Intangible assets	1,747,285	1,739,716
Total non-current assets	6,659,750	6,323,641
Total assets	10,004,748	8,404,355
Current liabilities
Short-term debt	1,162,872	835,290
Suppliers	1,249,124	1,097,997
Suppliers - Forfaiting	78,416	0
Salaries	305,454	283,522
Taxes payable	134,951	146,174
Landing fees	365,651	239,566
Advance ticket sales	1,456,939	1,185,945
Mileage program	765,114	781,707
Advances from customers	21,718	16,823
Provisions	46,561	66,502
Derivatives	34,457	89,211
Operating leases	28,387	7,233
Other liabilities	100,401	98,772
Total Current liabilities	5,750,045	4,848,742
Noncurrent liabilities
Long-term debt	5,942,795	5,543,930
Suppliers	222,026	13,517
Provisions	562,628	723,713
Mileage program	188,204	219,325
Deferred taxes	188,005	338,020
Taxes payable	66,196	42,803
Operating leases	110,723	0
Other liabilities	43,072	31,056
Total non-current liabilities	7,323,649	6,912,364
Equity
Capital stock	3,082,802	3,080,110
Share issuance costs	(155,618)	(155,618)
Treasury shares	(4,168)	(13,371)
Capital reserves	88,762	91,399
Equity valuation adjustments	(79,316)	(147,229)
Share-based payments reserve	119,308	113,918
Gains on change in investment	760,545	693,251
Accumulated losses	(7,293,274)	(7,312,458)
Deficit attributable to equity holders of the parent	(3,480,959)	(3,649,998)
Non-controlling interests from Smiles	412,013	293,247
Total deficit	(3,068,946)	(3,356,751)
Total liabilities and deficit	R$ 10,004,748	R$ 8,404,355

XML

Consolidated statements of operations - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net revenue
Passenger	R$ 9,185,805	R$ 8,671,442	R$ 8,583,388
Cargo and other	1,390,217	1,195,893	1,194,619
Total net revenue	10,576,022	9,867,335	9,778,007
Operating costs and expenses
Salaries	(1,708,111)	(1,656,785)	(1,580,531)
Aircraft fuel	(2,887,737)	(2,695,390)	(3,301,368)
Aircraft rent	(939,744)	(996,945)	(1,100,086)
Sales and marketing	(590,814)	(555,984)	(617,403)
Landing fees	(664,170)	(687,366)	(681,378)
Aircraft, traffic and mileage servicing	(874,736)	(753,497)	(678,075)
Maintenance, materials and repairs	(368,719)	(593,090)	(603,925)
Depreciation and amortization	(505,425)	(447,668)	(419,691)
Passenger service expenses	(437,045)	(461,837)	(481,765)
Other operating expenses	(610,310)	(320,948)	(493,621)
Total operating costs and expenses	(9,586,811)	(9,169,510)	(9,957,843)
Equity results	544	(1,280)	(3,941)
Income (loss) before financial expense, net and income taxes	989,755	696,545	(183,777)
Financial expense, net
Financial income	213,446	568,504	332,567
Financial expenses	(1,050,461)	(1,271,564)	(1,328,891)
Exchange rate variation, net	(81,744)	1,367,937	(2,266,999)
Total financial results	(918,759)	664,877	(3,263,323)
Income (loss) before income taxes	70,996	1,361,422	(3,447,100)
Current income taxes	(239,846)	(257,944)	(196,140)
Deferred income taxes	547,059	(1,114)	(648,000)
Total income taxes	307,213	(259,058)	(844,140)
Net income (loss) for the year	378,209	1,102,364	(4,291,240)
Net income (loss) attributable to equity holders of the parent	19,184	849,619	(4,460,883)
Net income attributable to non-controlling interests from Smiles	R$ 359,025	R$ 252,745	R$ 169,643
Basic profit (loss) per common share (in dollars per share)	R$ 0.002	R$ 0.07	R$ (0.422)
Basic profit (loss) per preferred share (in dollars per share)	0.055	2.455	(14.764)
Diluted profit (loss) per common share (in dollars per share)	0.002	0.07	(0.422)
Diluted profit (loss) per preferred share (in dollars per share)	R$ 0.055	R$ 2.45	R$ (14.764)

XML

Consolidated statements of comprehensive income (loss) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Profit or loss [abstract]
Net income (loss) for the year	R$ 378,209	R$ 1,102,364	R$ (4,291,240)
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods
Cash flow hedge	67,913	123,889	(60,949)
Tax effect	0	(92,179)	20,723
Total Other comprehensive income	67,913	31,710	(40,226)
Total comprehensive income (loss) for the year	446,122	1,134,074	(4,331,466)
Comprehensive income (loss) for the year attributable to:
Equity holders of the parent	87,097	881,329	(4,501,109)
Non-controlling interests from Smiles	R$ 359,025	R$ 252,745	R$ 169,643

XML

Consolidated statements of changes in equity - BRL (R$) R$ in Thousands	Capital stock [Member]	Advance for future capital increase [Member]	Share issuance cost [Member]	Treasury Shares [Member]	Goodwill on transfer of shares [Member]	Special goodwill reserve of subsidiary [Member]	Unrealized hedge gain (losses) [Member]	Share-based payment [Member]	Gains on change in investment [Member]	Accumu-lated losses [Member]	Total attributable to equity holders of the parent [Member]	Non-controlling interests [Member]	Total
Balances as of beginning of period at Dec. 31, 2014	R$ 2,618,748	R$ 51	R$ (150,214)	R$ (31,357)	R$ 32,387	R$ 70,979	R$ (138,713)	R$ 93,763	R$ 687,163	R$ (3,701,194)	R$ (518,387)	R$ 185,413	R$ (332,974)
Changes in equity [abstract]
Other comprehensive income (loss), net							(40,226)				(40,226)		(40,226)
Net income (loss) for the year										(4,460,883)	(4,460,883)	(169,643)	(4,291,240)
Stock options exercised	89	(51)									38	3,737	3,775
Capital increase (decrease) in subsidiary	461,273										461,273		461,273
Share issuance costs			(5,009)								(5,009)		(5,009)
Share-based payments								13,516			13,516	836	14,352
Gains on change in investment									3,216		3,216	1,215	4,431
Restricted shares transferred				8,658	(4,505)			(4,153)					0
Interest attributable to shareholders’ equity declared by Smiles												17,566	17,566
Dividends declared												(119,256)	(119,256)
Balances as of end of period at Dec. 31, 2015	3,080,110	0	(155,223)	(22,699)	27,882	70,979	(178,939)	103,126	690,379	(8,162,077)	(4,546,462)	224,022	(4,322,440)
Changes in equity [abstract]
Other comprehensive income (loss), net							31,710				31,710		31,710
Net income (loss) for the year										849,619	849,619	252,745	1,102,364
Stock options exercised												3,507	3,507
Share issuance costs			(395)								(395)		(395)
Share-based payments								12,658			12,658	413	13,071
Gains on change in investment									2,872		2,872	313	3,185
Restricted shares transferred				9,328	(7,462)			(1,866)					0
Interest attributable to shareholders’ equity declared by Smiles												10,422	10,422
Dividends declared												(177,331)	(177,331)
Balances as of end of period at Dec. 31, 2016	3,080,110	0	(155,618)	(13,371)	20,420	70,979	(147,229)	113,918	693,251	(7,312,458)	(3,649,998)	293,247	(3,356,751)
Changes in equity [abstract]
Other comprehensive income (loss), net							67,913				67,913		67,913
Net income (loss) for the year										19,184	19,184	359,025	378,209
Stock options exercised	2,692										2,692		2,692
Capital increase (decrease) in subsidiary												1,988	1,988
Share issuance costs												(523)	(523)
Share-based payments								11,956			11,956	192	12,148
Gains on change in investment									3,994		3,994		3,994
Sale of interest in subsidiary									63,300		63,300	4,865	68,165
Restricted shares transferred				9,203	(2,637)			(6,566)					0
Interest attributable to shareholders’ equity declared by Smiles												(14,071)	(14,071)
Minimum dividends declared by Smiles												(46,931)	(46,931)
Additional dividends distributed by Smiles												(185,779)	(185,779)
Balances as of end of period at Dec. 31, 2017	R$ 3,082,802	R$ 0	R$ (155,618)	R$ (4,168)	R$ 17,783	R$ 70,979	R$ (79,316)	R$ 119,308	R$ 760,545	R$ (7,293,274)	R$ (3,480,959)	R$ 412,013	R$ (3,068,946)

XML

Statements of cash flows - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating activities
Net income (loss) for the year	R$ 378,209	R$ 1,102,364	R$ (4,291,240)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	505,425	447,668	419,691
Allowance for doubtful accounts	24,913	9,806	39,287
Provisions for legal proceedings	158,263	189,244	44,460
Provisions (reversals) for inventory obsolescence	3,059	0	(414)
Deferred taxes	(547,059)	1,114	648,000
Equity results	(544)	1,280	3,941
Share-based payments	14,849	13,524	14,352
Exchange and monetary variations, net	95,132	(1,149,616)	1,723,441
Interest on debt and finance leases	566,902	682,188	600,410
Unrealized hedge results	8,639	82,990	18,475
Provision for profit sharing	65,573	56,238	10,633
Write-off property, plant and equipment and intangible assets	145,855	181,308	25,069
Write-off of goodwill on investment in associate	15,184	0	0
Losses from capital increase in associate	0	1,368	0
Other	0	16,232	0
Gain on redemption of debt	0	(286,799)	0
Total adjustments to reconcile net income (loss) to net cash provided by operating activities	1,434,400	1,348,909	(743,895)
Changes in assets and liabilities:
Trade receivables	(198,370)	(307,574)	(149,623)
Short-term investments	(353,231)	83,062	309,749
Inventories	1,038	16,648	(60,140)
Deposits	46,388	(323,641)	21,077
Suppliers	(202,462)	204,184	210,474
Suppliers - Forfaiting	76,157	0	0
Advance ticket sales	270,994	(20,710)	105,044
Mileage program	(47,714)	9,374	211,940
Advances from customers	4,895	3,364	10,263
Salaries	(43,641)	(23,351)	(15,438)
Landing fees	126,085	(74,090)	(1,492)
Tax obligations	460,980	257,464	233,930
Derivatives	(32,310)	(13,384)	(6,267)
Provisions	(270,970)	(253,643)	(61,386)
Operating leases	131,877	(158,994)	166,227
Other assets (liabilities)	18,157	64,220	(67,602)
Interest paid	(528,398)	(606,405)	(548,773)
Income taxes paid	(221,122)	(226,500)	(213,555)
Net cash flows from (used in) operating activities	672,753	(21,067)	(599,467)
Investing activities
Sale of interest in subsidiary	68,163	0	0
Short-term investments of Smiles	(171,174)	(45,651)	(254,416)
Restricted cash	(100,835)	542,107	(403,854)
Capital increase in associate	0	(3,439)	0
Advances for property, plant and equipment acquisition, net	68,679	536,444	(167,646)
Property, plant and equipment	(370,438)	(409,709)	(391,731)
Intangible assets	(55,449)	(29,656)	(42,812)
Dividends received from associate	1,249	1,993	1,302
Net cash flows (used in) from investing activities	(559,805)	592,089	(1,259,157)
Financing activities
Loan funding, net of issuance costs	1,898,738	0	2,510,521
Debt issuance and exchange offer costs	(65,628)	(27,249)	(41,990)
Loan payments	(274,480)	(520,519)	(1,632,039)
Early payment of Senior Notes	(707,142)	0	0
Finance lease payments	(239,092)	(342,791)	(409,519)
Dividends and interest attributable to shareholders’ equity paid to non-controlling interests of Smiles	(254,892)	(171,829)	(136,822)
Capital increase	2,692	0	465,048
Share issuance cost	(523)	(395)	(5,009)
Net cash flows from (used in) financing activities	359,673	(1,062,783)	750,190
Foreign exchange variation on cash held in foreign currencies	(7,966)	(18,364)	281,993
Net increase (decrease) in cash and cash equivalents	464,655	(510,125)	(826,441)
Cash and cash equivalents at beginning of the year	562,207	1,072,332	1,898,773
Cash and cash equivalents at the end of the year	1,026,862	562,207	1,072,332
Non-cash transactions
Interest on shareholders’ equity and dividends, net of taxes	(49,602)	0	0
Deposits in guarantee for lease agreements	10,307	0	0
Write-off of finance lease agreements	(15,334)	0	0
Renegotiation of finance lease agreements	0	549,144	145,487
Provision for aircraft return	0	97,423	259,673
Software acquisition	0	25,660	0
Engine maintenance financing	529,775	201,170	0
Property, plant and equipment acquisition through Finimp	R$ 63,066	R$ 0	R$ 107,592

XML

1. General information

12 Months Ended

Dec. 31, 2017

General Information

General information

Gol Linhas Aéreas Inteligentes S.A. (the “Company” or “GLAI”) is a publicly-listed company incorporated on March 12, 2004, under the Brazilian Corporate Law. The Company is a holding company of the following main subsidiaries: (i) Gol Linhas Aéreas S.A. (“GLA”, formerly “VRG Linhas Aéreas S.A.”), which is mainly engaged in (a) the regular and non-regular flight transportation services of passengers, cargo and mailbags, domestically or internationally, according to the concessions granted by the regulator; and (b) other activities in relation to flight transport services provided in its by-laws; and (ii) Smiles Fidelidade S.A. (“Smiles Fidelidade”, formerly Webjet Participações S.A. prior to the change in the corporate name on July 1, 2017), which mainly operates (a) the development and management of its own or third party’s customer loyalty program, and (b) sale of redemption rights of awards related to the loyalty program.

Additionally, the Company is the direct parent company of the wholly-owned subsidiaries GAC Inc. (“GAC”), Gol Finance Inc., Gol Finance, formerly Gol LuxCo S.A. (“Gol Finance”), Gol Dominicana Lineas Aereas SAS (“Gol Dominicana”), and indirect parent company of Smiles Viagens e Turismo S.A. (“Smiles Viagens”).

The Company’s corporate address is located at Praça Comandante Linneu Gomes, s/n, concierge 3, building 24, Jardim Aeroporto, São Paulo, Brazil.

The Company’s shares are traded on the B3 S.A. - Brasil, Bolsa, Balcão (“B3”) and on the New York Stock Exchange (“NYSE”). The Company adopted Level 2 Differentiated Corporate Governance Practices from the B3 and is included in the Special Corporate Governance Stock Index (“IGC”) and the Special Tag Along Stock Index (“ITAG”), which were created for companies committed to apply differentiated corporate governance practices.

GLA is highly sensitive to the economy and also to the U.S. dollar, as approximately 50% of its costs are denominated in U.S. dollar. To overcome the challenges faced throughout 2016, the Company implemented a plan to improve its liquidity and its operating margin. As a result, the Company has been improving its liquidity and ability to respond effectively to the adverse events caused by the instability of the Brazilian economic scenario. The diligent work performed to adjust the fleet size to the economy growth and match seat supply to demand are some of the ongoing initiatives implemented to maintain a high load factor. The Company will continue to maintain a solid strategy of liquidity initiatives, such as the adjustment of the route network, initiatives to reduce costs and the adjustment of its capital structure.

Moving forward with its liquidity plan, at the end of December 2017, the Company implemented several initiatives to restructure its debt, reducing the financial cost of its debt. The offering of Senior Notes on December 11, 2017 raised US$500 million, at lower rates, was partially used to amortize the Company’s most onerous debt and will significantly reduce the financial cost as from 2018. Other initiatives are scheduled for 2018, reinforcing the Company’s commitment to reducing the financial cost in order to promote and solidify its liquidity strategy.

Even in a scenario with an outlook for improvement, the Company is subject to uncertainties in the Brazilian economy and political scenario that may directly impact the effectiveness of the expected results.

Management understands that the business plan prepared, presented and approved by the Board of Directors on January 11, 2018, shows strong elements to continue as going concern.

On July 1, 2017, due to change in the organizational structure, and to generate tax savings from the use of tax losses carryforward, the Company approved a corporate restructuring through the merger of Smiles S.A. and Smiles Fidelidade S.A.. As a result of the merger, Smiles S.A. was dissolved and all its assets, rights and obligations were transferred to Smiles Fidelidade S.A., pursuant to articles 224, 225, 227 and 264 of the Brazilian Corporate Law.

Irregular Payments Investigation

In 2016, the Company received inquiries from Brazilian tax authorities regarding certain payments to firms that turned out to be owned by politically exposed persons in Brazil. Following an internal investigation, the Company engaged U.S. and Brazilian legal counsel to conduct an external independent investigation to ascertain the facts with regard to these and any other payments identified as irregular and to evaluate the adequacy and effectiveness of the Company’s internal control and compliance programs in light of the findings of the investigation.

In December 2016, the Company entered into a leniency agreement with the Brazilian Federal Public Ministry (the “Leniency Agreement”), under which the Company agreed to pay R$12.0 million in fines and to make improvements to its compliance program. In turn, the Federal Public Ministry agreed not to bring any criminal or civil suits related to activities that are the subject of the Leniency Agreement and that may be characterized as (i) acts of administrative impropriety and related acts involving politically exposed persons or (ii) other possible actions, which at the date of the Leniency Agreement had not been identified by the ongoing investigation (any such actions possibly resulting in an increase in the fines under the Leniency Agreement). In addition, the Company paid R$4.2 million in fines to the Brazilian tax authorities related to the above-mentioned payments. The Company voluntarily informed the U.S. Department of Justice, the SEC and the CVM of the external independent investigation and the Leniency Agreement.

The external independent investigation was concluded in April 2017. It revealed that certain additional irregular payments were made to politically exposed persons. None of the amounts paid were material (individually or in the aggregate) in terms of cash flow, and none of our current employees, representatives or members of the board or Management knew of any illegal purpose behind any of the identified transactions or knew of any illicit benefit to the Company arising out of the transactions investigated. The Company reported the conclusions of the investigation to the relevant authorities and will maintain them informed of any developments, as well as collaborate with them in their analysis. These authorities may impose fines and possibly other sanctions on the Company.

The Company continue to take steps to strengthen and expand its internal control and compliance programs. Among other measures, the Company are monitoring its transactions with politically exposed persons, and enhanced its procurement procedures, including the contracting and execution of services by outside providers. The Company have hired specialists to assess risks and review internal controls related to fraud and corruption to identify and help us implement further improvements, and the Company will continue to hire specialists to implement any necessary improvements, as well as systems to monitor its transactions and train its employees.

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2. Approval and summary of significant accounting policies applied in preparing the financial statements

12 Months Ended

Dec. 31, 2017

Approval And Summary Of Significant Accounting Policies Applied In Preparing Financial Statements

Approval and summary of significant accounting policies applied in preparing the financial statements

The consolidated financial statements were amended in relation to those issued on April 30, 2018 to present additional information (i) on Note 13 to present the total net income (loss) for the year attributable to equity holders of the parent and additional disclosure to clarify that the Company’s preferred shares carry economic rights, including dividend rights, 35 times those of common shares; and (ii) to replace the misidentified term “gross profit” to “total net revenue” in the tables presenting net revenue by segment in Note 25.2.

The Company’s consolidated financial statements were authorized for issue by Management on May 30, 2018.

2.1.      Compliance statement

The consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

2.2.      Basis of preparation

These financial statements were prepared based on historical cost, except for certain financial assets and liabilities that are measured at fair value and investments measured using the equity method.

The Company's consolidated financial statements as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 were prepared based on the going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business.

Except for Gol Dominicana, which functional currency is U.S. dollar, the Company and its subsidiaries functional currency is the Brazilian Real. The presentation currency of these consolidated financial statements is the Brazilian Real.

Certain comparative amounts were reclassified to conform to the current year presentation.

Basis of consolidation

The consolidated financial statements comprise Gol Linhas Aéreas Inteligentes S.A., its subsidiaries, jointly controlled and associate, as follows:

Entity	Date of constitution	Location	Operational activity	Type of control	% equity interest
					12/31/2017	12/31/2016
Extensions:
GAC	03/23/2006	Cayman Islands	Aircraft acquisition	Direct	100.0	100.0
Gol Finance Inc.	03/16/2006	Cayman Islands	Financial funding	Direct	100.0	100.0
Gol Finance	06/21/2013	Luxembourg	Financial funding	Direct	100.0	100.0
Subsidiaries:
GLA	04/09/2007	Brazil	Flight transportation	Direct	100.0	100.0
Smiles Fidelidade	08/01/2011	Brazil	Loyalty program	Direct	52.7	53.8
Smiles Viagens (*)	08/10/2017	Brazil	Travel agency	Indirect	100.0	-
Gol Dominicana	02/28/2013	Dominican Republic	Non-operational	Direct	100.0	100.0
Jointly controlled:
SCP Trip	04/27/2012	Brazil	Flight magazine	Indirect	60.0	60.0
Associate:
Netpoints	11/08/2013	Brazil	Loyalty program	Indirect	25.4	25.4

 (*) The entity is a start up.

The accounting policies were applied consistently in all the consolidated entities and are consistent with those used in previous years. All the transactions, balances, income and expenses between the consolidated entities are fully eliminated in the consolidated financial statements.

The summary of significant accounting policies adopted by the Company is as follows:

a)      Cash and cash equivalents

Cash and cash equivalents include bank deposits and short-term investments with maturities of three months or less (or with no restriction period for redemption) which have high liquidity and are readily convertible into a known amount of cash and have an insignificant risk of change in value.

b)      Short-term investments

Short-term investments are represented by financial investments with first-tier financial institutions and include exclusive investment funds.

c)       Restricted cash

Restrict cash comprises mainly deposits in guarantee and linked to securities, and short and long term debt.

d)      Trade receivables

Trade receivables are measured based on cost, less allowances for doubtful accounts, which approximate their fair value, due to their short-term nature. An allowance for doubtful accounts is recorded when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivable through risk analysis and taking into account the historical analysis of the recovery of arrears. The allowance for doubtful receivables is the difference between the original book value and amount considered recoverable. Provision is made for all accounts overdue for more than 90 days for installment sales, travel and cargo agencies, and 180 days in respect of airline partners. Additionally, in some cases, the Company performs an individual analysis of overdue balances.

e)      Inventories

Inventories are comprised primarily of maintenance and spare parts and materials, and are stated at the lower of cost and net realizable value. The cost of inventories is determined using the average cost method and includes expenses incurred in their acquisition and transportation to their current location. The provision for inventory obsolescence is recorded when losses are probable.

f)       Financial assets and liabilities

Financial assets

After initial recognition, these are measured in each balance sheet with the pre¬defined classification, based on the purposes for which they were acquired or issued, as described below:

i.

Loans and receivables: with fixed or determinable payments that are not quoted in an active market which are measured at amortized cost after initial recognition under the effective interest method. Interest, inflation adjustment, foreign exchange changes, less impairment losses, when applicable, are recognized in profit or loss under financial income or financial expenses, when earned or incurred. The Company has mainly bank deposits and trade receivables classified under this category.

ii.

Financial assets at fair value through profit or loss: include financial assets held for trading (i.e., acquired primarily for the purpose of sale in the short term) and financial assets designated upon initial recognition at fair value through profit or loss. Interest, inflation adjustment, foreign exchange changes and changes arising from the adjustment to fair value are recognized in profit or loss under financial income or financial expenses, when earned or incurred. The Company has cash equivalents, short-term investments and restricted cash classified under this category.

Financial liabilities

i.

Financial liabilities at fair value through profit or loss: include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss, except those designated as hedge instruments. They are remeasured at fair value at every balance sheet date. Interest, inflation adjustment, foreign exchange changes and changes arising from measurement at fair value, when applicable, are recognized in the profit or loss when incurred. The Company classifies under this category derivatives not designated as hedging instruments.

ii.

Loans and borrowings: financial liabilities that are not regularly traded before maturity. After initial recognition, they are remeasured at amortized cost using the effective interest method. Interest, inflation adjustment and foreign exchange changes, if applicable, are recognized in profit or loss when incurred. The Company recognized under this category current and noncurrent short and long term debt (including finance leases) and trade accounts payable.

Derivatives: Changes on aircraft fuel, interest rate and foreign expose the Company and its subsidiaries to risks that may affect its financial performance. In order to mitigate these risks, the Company uses financial instruments that may or may not be designated as hedge accounting, and, if designated, are classified as cash flow hedges or fair value hedges.

·       Not designated as hedge accounting: the Company may use derivative financial instruments as not designated as hedge accounting when the objectives of the risk Management do not require such classification. The non¬designated operations have movements in fair value directly recognized in financial results.

·       Designated as cash flow hedge: hedge the income or expenses from the fluctuations on exchange rates. The effectiveness is based on statistical correlation methods and the ratio between gains and losses on the financial instruments used as hedge, and the cost and expense fluctuation of the hedged items. The instruments are considered as effective when the fluctuation in the value of derivatives offsets between 80% and 125% the impact of the price fluctuation on the cost or expense of the hedged item. The balance of the actual fluctuations in the fair values of the derivatives are classified in equity (under “Other comprehensive income (loss”) and the ineffective gains or losses are recognized in profit or loss (under “Financial results”), until the revenue recognition or hedged expense under the same item of profit or loss in which the item is recognized.

Derecognition: the Company writes off a financial asset only when the contractual rights to the cash flows from the asset expire, or transfers the asset and substantially all the risks and benefits of ownership to a third party. If the Company does not transfer nor retains substantially all the risks and benefits of ownership of the financial asset, but continues to control the transferred asset, the Company recognizes the participation retained and its liabilities on the values that it will have to pay. If the Company retains substantially all the risks and benefits of ownership of the financial asset transferred, the Company continues recognizing this asset. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss.

Hedge accounting is discontinued prospectively when the Company (i) cancel the hedge operation (ii) the derivative matures or is sold, terminated, or exercised, or (iii) when no longer qualifies as hedge accounting. If the operation is discontinued, any gains or losses previously registered and accumulated in equity in “Other comprehensive income (loss)” until that date are registered on statement of operations as the operation is registered. When the Company expects that the hedge operation will no longer occur, the accumulated and deferred gains or losses in equity are immediately recorded in profit or loss, under the same line that it was initially recorded.

Offsetting of financial instruments: financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

g)      Deposits

Aircraft and engine maintenance deposits: refer to payments made in U.S. dollars by the Company to commercial lease companies to be used in future aircraft and engine maintenance work. The realization of these assets occurs substantially by utilization of the deposits to pay the maintenance services and the receipts of funds, according to the negotiations with the lessors. The exchange rate variations arising from payments, net of uses for maintenance, are recognized as an expense or revenue in the financial results. Management performs regular reviews of the recovery of maintenance deposits based on future maintenance events, and believes that the amounts recorded in the consolidated financial position are recoverable.

Certain lease agreements establish that if a maintenance event does not occur, the deposits are not refundable. Any excess amounts retained by the lessor upon termination of the lease agreement are recognized in profit or loss, under “maintenance, materials and repairs”.

Additionally, the Company maintains agreements with some lessors under which the deposits have been replaced by letters of credit, which can be executed by the lessor if the aircraft maintenance is not performed as scheduled. Many of the aircraft lease agreements do not require maintenance deposits and are guaranteed with letters of credit. As of December 31, 2017, no letter of credit has been executed.

Deposits in guarantee and collaterals for lease agreements: the deposits in guarantee and collaterals are denominated in U.S. dollars, and are adjusted on a monthly basis for foreign exchange fluctuations, they do not bear interest and are reimbursable to the Company upon termination of the agreements.

h)      Leases and sale-leaseback transactions

In accordance with IAS 17 "Leases", leases are classified as finance leases when the lease arrangement transfers substantially all the risks and rewards of ownership to the lessee, or meet the following conditions:

i.          the lease transfers ownership of the asset to the lessee at the end of the lease agreement;

ii.         the lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than fair value at the date the option becomes exercisable such that, at the inception of the lease, is reasonably certain that the option will be exercised;

iii.        the lease term is the most part of the economic asset life, even if the title is not transferred;

iv.        at the beginning of the lease, the present value of minimum lease payments represents substantially all the fair value of the leased asset;

v.         the leased assets are of such a specialized nature such that only the lessee can use them without major modifications.

The difference between the present value and the total amount of falling due installments is charged to profit or loss as financial expenses. The corresponding obligation to the lessor is accounted for as short and long term debt. The aircraft held under finance leases, which have a purchase option at the end of the contract, are depreciated on a straight¬line basis over the useful life at rates calculated to write down the cost to the estimated residual value of 20% based on market price valuations. All other aircraft recorded in property, plant and equipment, when there is no reasonable certainty that the Company will obtain ownership of the property at the end of the contractual term, are depreciated over the shorter of the useful life of the assets and the lease agreement. The other leases are classified as operating leases and are recognized as an expense in profit or loss on a straight¬line basis over the term of the lease agreement.

Lease payments under operating leases are recognized as an expense on a straight-line basis over the lease term in “Aircraft leases”. Future payments are not recognized in the financial statements but are future commitments undertaken are presented on Note 26.

Gains or losses related to sale-leaseback transactions classified as an operating lease after the rights sale are accounted as follows:

·       Immediately recorded in profit or loss when it is clear that the transaction is established at fair value;

·       If the sale price is below fair value, any profit or loss is immediately recognized as other (expense) income, however if the loss is compensated by future lease payments at below or above market price (the gains or losses are deferred and amortized in proportion to the lease payments during the period that the assets will be used);

·       In the event of the sale price being higher than the fair value of the asset, the value exceeding the fair value is deferred and amortized during the period when the asset is expected to be used. The amortization of the gain is recorded as a reduction in lease expenses.

The amount of deferred losses is recorded as other current or noncurrent assets, and the amount of deferred gains is recorded as other liabilities. The breakdown between short and long-term is based on the lease terms.

If the sale-leaseback transactions results in finance lease, any excess proceeds over the carrying amount shall be deferred and amortized over the lease term. The Company did not enter into any sale-leaseback transaction that resulted in a finance lease during the years ended December 31, 2017, 2016 and 2015.

i)        Property, plant and equipment

Property, plant and equipment, including rotable parts, are recorded at acquisition or construction costs, including interest and other financial charges. Each component of property, plant and equipment that has a cost that is significant in relation to the overall cost of the item is depreciated separately. The estimated useful life for property and equipment, for depreciation purposes, is disclosed in Note 14.

The estimated market value at the end of its useful life is a premise for measuring the residual value of the Company’s property, plant and equipment. Except for aircraft with purchase option at the end of the agreements, the other items have no residual value. The residual value and the useful life of assets are reviewed annually and adjusted, if necessary.

The carrying amount of the property, plant and equipment is analyzed in order to verify possible impairment losses when events or changes in circumstances indicate that the book amount is higher than the estimated recoverable amount.

A write-off of a property, plant and equipment item occurs after disposal or when there is no future economic benefits resulting from continued use of the asset. Any gains or losses on property, plant and equipment sales or write-offs are determined by the difference between the values received in the sale and the asset's book value, and are recognized in the statement of operations.

Additionally, the Company adopts the following treatment for the items below:

Advances for aircraft acquisition: refer to prepayments made based on the agreements entered into with Boeing for the purchase of Boeing 737-800 Next Generation and 737- MAX aircraft. The advances are recorded by historical exchange rate at the conversion date.

Lease agreements: assets held through finance leases, when the risks and rewards are transferred to the Company, the asset is registered on the balance sheet. At the beginning of the lease agreement, the Company registers the finance lease as asset and the liability at fair value, or, if lower, the present value of the minimum lease payments.

The leased asset is depreciated over the useful life of the asset. However, when it is uncertain that ownership will be transferred to the Company at the end of the lease agreement, the asset is depreciated over its expected useful life or the contractual lease term period, which ever is shorter.

Other engine and aircraft leases are classified as operating leases and lease expense on a straight-line basis on the statement of operations.

Aircraft and engine redelivery expenses: the Company records a provision for future costs to be incurred upon the aircraft return. Such provision is determined based on the the estimated costs to be incurred upon redelivery and the contractual requirements of operating lease agreements as described in Note 14. After initial recognition, the corresponding asset is depreciated on a straight line basis over the terms of the contract.

Capitalization of major engine, aircraft and APU (Auxiliary Power Unit) maintenance expenses: costs on major maintenance (including replacement and labor parts) are capitalized only when there is an extension of the estimated useful life of the aircraft or the engine. Such costs are capitalized and depreciated until the next major maintenance. Incurred costs that do not extend the useful life of the aircraft, the engine or APU’s, or related to other components of the aircraft are recognized directly in profit or loss.

j)       Intangible assets

Intangible assets are non-monetary assets without physical properties, which carrying amount of intangible assets with indefinite life is tested for impairment annually or when strong evidence of changes in circumstances indicates that the carrying amount may not be recoverable.

Goodwill: goodwill is annually tested for impairment by comparing the carrying amount of the cash-generating units (GLA and Smiles Fidelidade) with its recoverable amount. Management exercises considerable judgment to assess the impact of operating and macroeconomic changes in order to estimate the future cash flows and measure the recoverable amount of that asset.

Airport operating rights: airport operating rights were acquired as part of the acquisition of GLA and of Webjet (formerly named Webjet Linhas Aéreas S.A.), and were recognized at fair value at the acquisition date and are not amortized. Those rights are considered to have an indefinite useful life due to several factors and considerations, including requirements and necessary permits to operate within Brazil and limited slot availability in the most important airports in terms of traffic volume. The carrying value of these rights is evaluated annually as to its recoverable amount or in case of changes in circumstances indicates that carrying values may not be recoverable. No impairment has been recorded until as of the balance sheet date.

Software: The costs related to the acquisition or development of computer software that is separable from an item of related hardware is capitalized separately and amortized over a period on a straight-line basis in accordance with the software agreement.

k)      Income taxes

The income tax and social contribution expenses are represented by the sum of current and deferred income taxes.

Current income taxes: the provision for income tax and social contribution is based on the taxable income. The provisions for income and social contribution taxes are calculated for each company on a stand alone basis using statutory rates in effect at the end of the year.

Deferred income taxes: deferred income taxes are recognized on temporary differences and net operating losses carryforward at the end of the reporting date between the balances of assets and liabilities recorded in the financial statements and their tax basis used in calculation of taxable income.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that is not probable that sufficient taxable income will be incurred to allow all or part of the deferred tax asset to be realized.

Deferred tax related to items recognized directly in equity is also recognized in equity. Deferred tax items are recognized in accordance with the transaction that gave rise to the deferred tax, in other comprehensive income (loss) or directly in equity. Deferred tax assets are recognized only if they are expected to be realized.

Net operating losses carryforward are recorded based on the expected future taxable income for each company, in accordance with legal limitations.

The calculation of the expected future taxable income is based on the business plan, and are annually reviewed and approved by the Company’s Board of Directors.

l)        Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation.

Provision for aircraft return: for aircraft operating leases, the Company is contractually required to return the equipment in a predefined level of operational capability. In these cases, the Company accrues the cost of returning, since these are present obligations arising from past events that will generate future disbursements, whose measurement is made with reasonable assurance. These costs are primarily related to expenses of aircraft reconfiguration (interior and exterior), obtaining licenses and certifications techniques, painting, etc. according to return agreement clauses. The estimated cost is initially recorded at present value and the consideration of the provision for aircraft return is made under "Aircraft reconfigurations/overhauling" of property, plant and equipment (see Note 14). After initial recognition, the asset is depreciated on a straight-line basis and liabilities updated according to the discount rate estimated by the Company with the result shown in financial result. Any changes in the estimated costs to be incurred are recorded prospectively.

Provision for engine return: the provision is estimated based on the minimum contractual conditions that the equipment must have when returned to the lessor, considering the historical costs incurred and the conditions of the equipment at the time of evaluation. These provisions are recorded in profit or loss from the time that the minimum contract requirements are reached and the next maintenance is scheduled for a date later than the date set for the return of the engine. The Company estimated the provision for engine return in accordance with the expenditure that is intended be incurred, and, when the effect of the money value over time is considerate relevant, the provision amount will be the present value of the expenses that are expected to settle the obligation. The agreement maturity will be based on the date that the return of aircraft leased is expected, i.e., or the lease term.

Provision for legal proceedings: Provisions are recorded for all the lawsuits that represent probable loss according to its individual assessment, considering the estimated financial outflow. If the Company expects that some or all of the provision to be reimbursed, the reimbursement is recorded as a separate asset. The expense related to any provision is presented in the statement of operations, net of any reimbursement.

m)     Revenue recognition

The passenger revenue is recognized when air transportation services are actually provided to the passenger. Tickets sold but not yet used are recognized as advance ticket sales and correspond to deferred revenue from tickets sold to be transported in a future date, net of tickets that will expire in accordance with the Company’s expectations (breakage). Breakage consists of the statistical calculation, on a historical basis, of unused, expired tickets, i.e., passengers to be transported that have a high probability of not flying. The Company periodically records adjusted deferred revenues based on tickets which have actually expired.

Revenues from cargo shipment are recognized when transportation is provided. Other revenues include charter services, onboard sales services, tickets exchange rates, and other additional services, and are recognized when the service is provided.

n)      Deferred revenue

The "Smiles Loyalty Program" is designed to retain its customers through the grant of mile credits to its participants. The obligation created by the issuance of miles is measured based on the price that the miles were sold to its airline and non-airline partners, classified by the Company as the fair value of the transaction. The revenue recognition occurs when the miles are redeemed by the Smiles Program participants to exchange the rewards with its partners.

In the consolidated financial statements, the revenue due to exchange of miles from the program and the flight tickets sales is only recognized when the flight transportation is provided.

o)      Share-based payments

Stock options: the fair value of stock options granted to executives is estimated at the grant date using the Black-Scholes pricing model and the expense is recognized in profit or loss during the period that the right is acquired (vesting period), based on estimates which granted shares will be acquired, with a corresponding entry in equity.

Restricted shares: the transfer of restricted shares to its beneficiaries is made at the end of three years from the grant date, provided that the recipient has maintained its employment during that period. This transfer takes place through treasury shares, whose value per share is determined by the market price on the date of transfer to the beneficiary. Gains related to differences in the fair value of the share at the grant date and the value on the date of transfer of restricted shares are recorded in equity in capital reserves under "Goodwill on transfer of shares".

The impact of the review of the amounts of the restricted shares or shares to be acquired in comparison with the original estimates, if any, is recognized in profit or loss, such as the cumulative expense reflects the revised estimate, with a corresponding adjustment in equity.

p)      Segment information

The Company has two reportable segments, as described below:

Flight transportation: the operations are derived from GLA and consist of air transportation services and the major assets that contribute to the generation of revenues are its aircraft. Other revenues primarily arise from cargo, excess baggage charges and cancellation fares, all directly attributable to flight transportation services.

Smiles loyalty program: the operations in this segment are represented by miles sales transactions to airline and non-airline partners. Under this context, the program management, marketing and rights of redemption of prizes and creating and managing the database of individuals and corporations.

q)      Foreign currency transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the time that the transaction occurs. Monetary assets and liabilities denominated in foreign currencies are subsequently calculated based on the conversion using the exchange rate at the balance sheet date and differences resulting from the currency calculated based on conversion are recognized in profit or loss in financial results under “Exchange rate variation, net”.

r)       Main accounting estimates and assumptions adopted

The process of preparing these financial statements often requires that Management adopts assumptions, judgments and estimates that may affect the application of the policies and amounts of assets and liabilities, revenues and expenses. The actual results may differ from the adopted estimates, since such use historical experience and some assumptions that are believed to be appropriate under the circumstances. The reviews of accounting estimates are recognized in the same period in which the assumptions are reviewed and the effects are recognized on a prospective basis.

The estimates and assumptions that have a significant risk of material adjustments on the amounts of assets and liabilities are discussed below:

Impairment of financial assets: the Company estimates any impairment losses at every balance sheet date, or when there are evidences that the carrying amounts may not be recoverable. Problems in repatriation or usage of financial assets in other countries are indicative for impairment tests.

Impairment of non-financial assets: the Company assesses if there are indications of impairment for all non-financial assets at the balance sheet date, or when there is evidence that the carrying amount may not be recoverable. The recoverable values of the cash-generating unit were determined using its value-in-use. The value-in-use is determined based on the assumption of discounted cash flows.

Income taxes: The Company believes that the tax positions taken are reasonable. However, it recognizes that the authorities may question the positions taken which may result in additional liabilities for taxes and interest. The Company recognizes provisions that involve considerable judgment of the management. The provisions are reviewed and adjusted to account for changes in circumstances, such as lapsing of applicable statutes of limitations, conclusions of tax authorities, additional exposures based on identification of new issues or

court decisions affecting a particular tax issue. Actual results can differ from estimates.

Breakage: As part of the process of revenue recognition, flight tickets issued that will not be used and miles issued that will not be redeemed are estimated and recognized as revenue at the moment of the sale and issuance, respectively. These estimates, referred to as breakage, are reviewed annually and are based on historical data of expired flight tickets and expired miles.

Allowance for doubtful accounts: the allowance for doubtful accounts is recorded in the amount considered sufficient by the management in order to cover possible losses on trade receivables arising from receivables, considering the risks involved. The Company periodically evaluates its receivables and, based on historical data, combined with risk analysis per customer, registers the allowance for losses.

Provision for legal proceedings: provisions are recorded for all lawsuits that represent probable losses, according to the loss probability, which includes the assessment of available evidence, including the legal consultants’ opinion, internal and external, the proceedings nature and past experiences. Additionally, the provisions are periodically reviewed and the management believes that the provisions recorded are sufficient, based on the probability of loss. However, significant changes in judicial decisions can have significant impacts on the Company’s financial statements.

Provision for aircraft return: the Company estimates the provision for aircraft returns considering the costs in accordance with returns conditions agreements as set out in the return conditions in the lease agreements.

Provision for engine return: the Company records the provision for engine return based on an estimate of the agreement obligation of each engine return and recorded in the statement of operations only in the period between the last maintenance and the date of return of the components.

Fair value measurement of financial instruments: when the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model. The inputs to these models are based on observable markets, when possible; however, when this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments.

2.3.      New standards, amendments and interpretations

a)       Standards issued but not yet effective:

IFRS 9 – Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9 – “Financial Instruments”, that replaces IAS 39 – “Financial Instruments: Recognition and Measurement” and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing fully comparative information is not compulsory. The adoption of IFRS 9 will not affect the classification and measurement of the Company’s financial assets. One of the main impacts is the measurement of the allowance for doubtful accounts, which will be calculated based on expected credit losses instead of estimated losses. The Company expects a reduction of approximately 30% in estimated losses. Related to the effects on derivatives, the Company expects that the main changes from adoption of IFRS 9 will be related to the documentation of hedging strategy policies.

IFRS 15 – Revenue from Contracts with Customers

IFRS15 - Revenue from Contracts with Customers was issued in May 2014 and amended in April 2016, and is effective for fiscal years beginning on or after January 1, 2018. IFRS15 presents revenue recognition principles based on a five-step model to be applied to all contracts with customers, in accordance with the entity’s performance requirements. The Company will adopt the new standard on the date it becomes effective, as of January 1, 2018, using the full retrospective method. In 2017, the Company carried out an assessment of IFRS 15, which is subject to changes due to more detailed analyses that are still in progress. Among the main challenges for the adoption of IFRS 15, the Company believes that the recognition of the following revenues may change compared with the current accounting:

a) Passenger revenue arising from codeshare agreements: corresponds to agreements where two or more airlines get into an agreement to provide air transportation services. In transactions when the Company will act as principal, revenue will be recognized based on the gross value of the transaction (price of the ticket to the final customer), and in transactions when the Company will act as agent, revenue will be recognized based on the net value of the transaction (sale price less the amount payable to the other airline). The Company did not identify any impact of the change to this standard on revenue arising from codeshare agreements.

b) Ancillary revenue: comprises all revenue related to air transportation services, such as excess baggage, cancelation fees and refunds, as cancellations, no-show, among others. These revenues were assessed and will be classified as “related to the main service”, and will be recognized only when the air transportation service is incurred. In this regard, the Company concluded its assessment and estimated impacts of approximately R$14 million as a result of changes to the timing of recognition of revenues and approximately R$500 million from the reclassification of revenues from “Other revenue” to “Passenger revenue”.

c) Breakage revenue: comprises the expectation of mileage and tickets that are not likely to be used by the customer. To recognize these revenues, the Company uses analysis tools and statistical data that allow the estimate to be calculated with a reasonable level of certainty. Given the standard’s specific requirements regarding this, the Company concluded that its methodologies are in compliance with IFRS 15.

d) Mileage program: Presentation as agent: the main impact refers to the presentation of gross revenue with redemption of premiums net of their respective costs. Mileage valuation: there are no impacts resulting from the mileage valuation, since they are priced based on the sales value, considering that the Smiles Mileage Program operates independently. As a consequence, there is no change in the valuation of the tickets that are originated from the redemption of the mileage program.

IFRS 16 – Leases

IFRS 16 was issued in January 2016, and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Lease-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets the principles for recognition, measurement, presentation and disclosure of leases and require lessess to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. IFRS 16 is effective for annual periods beginning on or after January 1, 2019. IFRS 16 requires that, for the majority of leases, the lessor records an asset related to the right of use of the leased item, and a liability related to the lease. The Company has 88 aircraft leased as operational leases of the total of 119 aircraft, and the adoption of this standard will have a material impact on the Company, with the potential increase in the assets corresponding to the right of use of the leased item and liabilities related to the leases, which will be recorded in the statements of financial position as from the adoption date.

IFRIC 22 – Foreign Currency Transactions and Advance Consideration

IFRIC 22 clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a nonmonetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or nonmonetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration. IFRIC 22 is effective for annual periods beginning on or after January 1, 2018, and intended to eliminate diversity in practice, when recognising the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or nonmonetary liability relating to advance consideration received or paid in a foreign currency. The Company does not expect this interpretation to have significant impacts, as transactions with these characteristics already comply with this interpretation.

IFRIC 23 – Uncertainty over Income Tax Treatment

IFRIC 23 addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 and does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. IFRIC 23 is effective for annual periods beginning on or after January 1, 2019, and the Company does not expect significant impacts from the adoption of this interpretation.

IFRS 2 – Classification and Measurement of Share-based Payment Transactions – Amendments to IFRS 2

The IASB iassued amendments to IFRS 2 – Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of an share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permited if elected for all three amendments and the other criteria are met. The amendments are effective for annual periods beginning on January 1, 2018, and early application is permitted. The Company does not expect significant impacts from the adoption of these amendments on its consolidated financial statements.

b) Annual improvements – Applicable to annual periods beginning on or after January 1, 2017:

Amendments to IFRS 12 – Disclosure of Interests in other Entities: Clarification of the scope of disclosure requirements in IFRS 12

The amendments clarify that the disclosure requirements in IFRS 12 apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. These amendments did not affect the Company’s consolidated financial statements.

Amendments to IAS 12 – Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify on the recognition requirements of deferred tax assets for unrealized losses and the method to assess the existence of probable future taxable income against which the deductible temporary differences can be utilized. These amendments did not affect the Company’s consolidated financial statements.

Amendments to IAS 7 – Statement of Cash Flows: Disclosure Initiative

The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for both the current and the comparative periods in Note 28.

There are no other standards and interpretations issued but not yet adopted that, in Management's opinion, have a significant impact on the Company’s results or equity.

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3. Cash and cash equivalents

12 Months Ended

Dec. 31, 2017

Cash and cash equivalents [abstract]

Cash and cash equivalents

	12/31/2017	12/31/2016
Cash and bank deposits	427,608	246,528
Cash equivalents	599,254	315,679
Total	1,026,862	562,207

The breakdown of cash equivalents is as follows:

	12/31/2017	12/31/2016
Private bonds	164,959	45,882
Government bonds	14,039	-
Investment funds	420,256	269,797
Total	599,254	315,679

As of December 31, 2017, the private bonds were comprised by buy-back transactions and Bank Deposit Certificates - “CDBs”, remunerated at a weighted average rate equivalent to 77.6% (52.2% as of December 31, 2016) of the Interbank Deposit Certificate rate (“CDI”).

Government bonds were primarily represented by LFT, emunerated at a weighted average rate of 116.3% of the CDI rate.   

The investment funds classified as cash equivalents have high liquidity and, according to the Company’s assessment, are readily convertible to a known amount of cash with insignificant risk of change in value. As of December 31, 2017, investment funds were remunerated at a weighted average rate equivalent to 99.8% (91.3% as of December 31, 2016) of the CDI rate.

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4. Short-term investments

12 Months Ended

Dec. 31, 2017

Short-term Investments

Short-term investments

	12/31/2017	12/31/2016
Private bonds	731,061	77,080
Government bonds	32,701	41,104
Investment funds	191,827	313,049
Total	955,589	431,233

As of December 31, 2017, private bonds were represented by time deposits and debentures, with first-tier financial institutions, remunerated at a weighted average rate equivalent to 98% of the CDI rate (38% as of December 31, 2016, mainly represented by time deposits and short-term investments with first-tier financial institutions).          

Government bonds were primarily represented by LFT and LTN, remunerated at a weighted average rate of 107.7% (102.3% as of December 31, 2016) of the CDI rate.

Investment funds include private funds and bonds remunerated at a weighted average rate of 98.9% (101.0% as of December 31, 2016) of the CDI rate, the value may be subject to significant changes before redemption or maturity.

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5. Restricted cash

12 Months Ended

Dec. 31, 2017

Restricted Cash

Restricted cash

	12/31/2017	12/31/2016
Deposits in guarantee of letter of credit	60,423	15,721
Escrow deposits (a)	71,110	67,345
Escrow deposits - Leases (b)	116,131	78,015
Other deposits (c)	20,383	7,688
Total	268,047	168,769

(a)     Includes R$32,120 related to a contractual guarantee for the Supreme Court of Justice - STJ related to PIS and COFINS on interest attributable to shareholders’ equity paid to GLAI as described in Note 21. The other amounts relate to guarantees of GLA letters of credit.

(b)    Related to deposits made to obtain letters of credit for aircraft operating leases from GLA.

(c)     Related  mainly to bank guarantees.

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6. Trade receivables

12 Months Ended

Dec. 31, 2017

Trade Receivables

Trade receivables

	12/31/2017			12/31/2016
Local currency
Credit card administrators		454,975			345,798
Travel agencies		307,149			228,089
Cargo agencies		39,225			41,926
Airline partner companies		3,780			4,153
Other		43,871			66,774
Total local currency		849,000			686,740
Foreign currency
Credit card administrators		67,479			49,104
Travel agencies		9,829			16,323
Cargo agencies		823			2,215
Airline partner companies		47,662			31,200
Other		366			8,837
Total foreign currency		126,159			107,679
Total		975,159			794,419
Allowance for doubtful accounts		(38,681	)		(34,182	)
Total trade receivables		936,478			760,237

The aging list of trade receivables, net of allowance for doubtful accounts, is as follows:

	12/31/2017		12/31/2016
Not yet due
Until 30 days		594,968		348,168
31 to 60 days		133,438		151,186
61 to 90 days		44,642		66,925
91 to 180 days		71,116		86,652
181 to 360 days		26,541		11,147
Above 360 days		241		239
Total not yet due		870,946		664,317
Overdue
Until 30 days		21,686		19,117
31 to 60 days		8,338		5,623
61 to 90 days		3,559		10,915
91 to 180 days		15,620		22,648
181 to 360 days		8,059		20,609
Above 360 days		8,270		17,008
Total overdue		65,532		95,920
Total		936,478		760,237

The changes in allowance for doubtful accounts are as follows:

	12/31/2017			12/31/2016
Balance at the beginning of the year		(34,182	)		(50,389	)
Additions		(24,913	)		(9,806	)
Unrecoverable amounts		17,649			16,250
Recoveries		2,765			9,763
Balance at the end of the year		(38,681	)		(34,182	)

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7. Inventories

12 Months Ended

Dec. 31, 2017

Inventories Tables

Inventories

	12/31/2017	12/31/2016
Consumables	28,006	27,281
Parts and maintenance materials	162,409	160,884
Other	585	6,867
Provision for obsolescence	(12,509)	(12,444)
Total	178,491	182,588

The changes in provision for obsolescence are as follows:

	12/31/2017	12/31/2016
Balances at the beginning of the year	(12,444)	(12,444)
Additions	(3,059)	-
Write-off	2,994	-
Balances at the end of the year	(12,509)	(12,444)

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8. Deferred and recoverable taxes

12 Months Ended

Dec. 31, 2017

Deferred And Recoverable Taxes

Deferred and recoverable taxes

8.1.   Recoverable taxes

	12/31/2017	12/31/2016
Prepaid and recoverable income taxes	66,786	51,215
Withholding income tax (IRRF) (a)	7,308	9,601
PIS and COFINS (b)	408	16,908
Withholding tax of public institutions	6,127	8,130
Value added tax – IVA (c)	5,431	12,044
Other	4,195	1,449
Total	90,255	99,347
Current assets	83,210	27,287
Noncurrent assets	7,045	72,060

(a) IRRF: withholding income tax levied on financial income from financial investments.

(b) Contributions to Social Integration Program (PIS) and Contribution for the Financing of Social Security (COFINS).

(c) IVA: Value added tax on sales of goods and services abroad.

8.2.   Deferred tax assets (liabilities) – Noncurrent

	12/31/2017	12/31/2016
Net operating losses carryforward
Income tax losses	129,316	9,149
Negative basis of social contribution	46,555	3,294
Temporary differences:
Mileage program	-	9
Allowance for doubtful accounts and other credits	63,585	13,823
Provision for losses on GLA’s acquisition	143,350	143,350
Provision for legal proceedings and tax liabilities	83,263	17,487
Aircraft return	68,438	32,515
Derivative transactions	9,603	1,635
Tax benefit due to goodwill incorporation (*)	14,588	29,177
Flight rights	(353,226)	(353,226)
Depreciation of engines and parts for aircraft maintenance	(167,913)	(148,581)
Reversal of goodwill amortization on GLA’s acquisition	(127,659)	(127,659)
Aircraft leases	34,660	30,589
Other	143,949	117,577
Total deferred taxes, net	88,509	(230,861)
Deferred tax assets – noncurrent	276,514	107,159
Deferred tax liabilities – noncurrent	(188,005)	(338,020)

(*) Related to the tax benefit from the reverse merger of G.A. Smiles Participações S.A. by Smiles S.A. Under the terms of the current tax legislation, the goodwill amortization for tax purposes will be a deductible expense on the taxable income calculation.

The Company, GLA and Smiles have net operating losses carryforward, comprised of accumulated income tax losses and negative basis of social contribution. The net operating losses carryforward do not expire; however, their compensation is limited to 30% of the annual taxable income. Net operating losses carryforward are as follows:

	GLAI		GLA		Smiles
	12/31/2017	12/31/2016	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Income tax losses	172,547	190,125	4,134,099	3,971,845	758,289	867,403
Negative basis of social contribution	172,547	190,125	4,134,099	3,971,845	758,289	867,403

As of December 31, 2017, the tax credits from tax losses carryforward were recorded based on the reasonably expected generation of future taxable income of GLAI and its subsidiaries, subject to legal limitations. The determination of the expected future taxable income were prepared based on the business plan approved by the Board of Directors on January 11, 2018.

The Company’s Management considers that the deferred assets recognized as of December 31, 2017 arising from temporary differences will be realized in connection with the realization of the deferred tax liabilities and the expectation of future results.

The analysis of the realization of deferred tax assets was prepared on a company basis, as follows:

GLAI: the Company has tax credits of R$62,548, of which R$58,666 is related to net operating losses carryforward and R$3,882 is related to temporary differences, with realization supported by the Company’s long-term plan.  However, for the year ended December 31, 2017, the Company reassessed its projections and did not recognize deferred tax assets for the amount of R$34,845 related to net operating losses carryforward.

GLA: GLA has tax credits on net operating losses carryforward of R$1,405,594. In view of recent events on the political scenario in Brazil, instability of the economic environment, fluctuations in the U.S. dollar exchange rate and other variables that can affect the projections of future results, as well as the history of losses in recent years, GLA has not recorded the recognition of total tax credits on net operating losses carryforward. On March 10 and September 19, 2017, the Company entered into the Brazilian Tax Regularization Program (“PRT”) and the Special Tax Regularization Program (“PERT”), respectively, which allowed the partial settlement of tax contingencies with tax loss carryforwards, see Note 18. As a result, the Company used tax losses carryforward of R$225,005, which was recorded in the statement of operations for the year. Additionally, the Company analyzed the realization of deferred tax assets on temporary differences and limited the recognition based on the expected realization of deferred tax liabilities on temporary differences. As a result, the Company did not recognize the net amount of R$163,416 of deferred tax assets on temporary differences.

Smiles Fidelidade: As of July 1, 2017, Smiles S.A. was incorporated by Smiles Fidelidade S.A. and, based on the projections of future taxable income, recognized a deferred tax asset on tax losses carryforward of R$193,020. The amount was recorded based on the expected generation of future taxable income of Smiles Fidelidade.

The reconciliation of the income taxes in profit or loss for the years ended December 31, 2017, 2016 and 2015 is as follows:

	12/31/2017	12/31/2016	12/31/2015
Income (loss) before income taxes	70,996	1,361,422	(3,447,100)
Income tax and social contribution tax rate	34%	34%	34%
Income at the statutory combined tax rate	(24,139)	(462,883)	1,172,014
Adjustments to calculate the effective tax rate:
Equity results	185	(435)	(1,340)
Tax income (losses) from wholly-owned subsidiaries	(106,533)	56,239	(83,702)
Income tax on permanent differences and other	(14,012)	3,803	1,920
Nontaxable revenues (nondeductible expenses), net	(51,572)	(41,913)	(111,828)
Exchange variation on foreign investments	(20,225)	242,190	(502,938)
Interest attributable to shareholders’ equity	4,817	3,543	4,673
Benefit on tax losses and temporary differences constituted (not constituted)	291,002	(59,602)	(1,322,939)
Use of tax losses in tax installment payment programs(*)	227,690	-	-
Total income taxes	307,213	(259,058)	(844,140)
Income taxes
Current	(239,846)	(257,944)	(196,140)
Deferred	547,059	(1,114)	(648,800)
Total income taxes	307,213	(259,058)	(844,140)

(*) Amount used to reduce by 76% of tax obligation from the PRT/PERT. For further information, see Note 18.

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9. Deposits

12 Months Ended

Dec. 31, 2017

Deposits from customers [abstract]

Deposits

	12/31/2017	12/31/2016
Judicial deposits (a)	508,515	432,182
Maintenance deposits (b)	484,565	584,149
Deposits in guarantee for lease agreements (c)	170,679	172,661
Total	1,163,759	1,188,992

(a)   Judicial deposits

Judicial deposits and escrow accounts represent guarantees of lawsuits related to tax, civil and labor claims deposited in escrow until the resolution of the related claims. Part of the amount in escrow accounts is related to civil and labor claims arising from the succession orders on claims against Varig S.A. and proceedings filed by employees that are not related to the Company or any related party (third-party claims). As the Company is not correctly classified as the defendant of these lawsuits, whenever such blockages occur, the exclusion of such is requested in order to release the resources. As of December 31, 2017, the blocked amounts regarding Varig S.A.’s succession lawsuits and third-party lawsuits were R$108,860 and R$74,300, respectively (R$101,352 and R$77,695 as of December 31, 2016, respectively).

(b)   Maintenance deposits

The Company made deposits in U.S. dollars for maintenance of aircraft and engines that will be used in future events as set forth in some lease contracts.

The maintenance deposits do not exempt the Company, as lessee, neither from the contractual obligations relating to maintenance of the aircraft nor from risk associated with operating activities. The Company holds the right to select any of the maintenance service providers or to perform such services internally.

The Company has two categories of maintenance deposits:

                         i.        Maintenance guarantee: related to individual deposits refundable at the end of the agreement, which may also be used in maintenance events, depending on negotiations with lessors. The balance as of December 31, 2017 was R$218,361 (R$336,318 as of December 31, 2016).

                        ii.        Maintenance reserve: related to amounts paid monthly based on the utilization of aircraft components, which may be used in maintenance events, according to the lease agreement. As of December 31, 2017, the balance of this reserve was R$266,204 (R$247,831 as of December 31, 2016).

(c)    Deposits in guarantee for lease agreements

As required by its lease agreements, the Company holds guarantee deposits in U.S. dollars on behalf of the leasing companies, whose full refund occurs upon the contract expiration date.

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10. Transactions with related parties

12 Months Ended

Dec. 31, 2017

Transactions With Related Parties

Transactions with related parties

10.1.   Transportation and consulting services with entities controlled by the controlling shareholder

All agreements related to transportation and consulting services are held by GLA. The related parties for these services are listed below, together with the object of the agreements and their main contractual conditions:

Viação Piracicabana Ltda.: provides airport shuttle services for passengers, luggage and employees. As of July 1, 2017, an Assignment Agreement was entered into between Breda Transportes e Serviços S.A. (“assignor”) and Viação Piracicabana Ltda. (“assignee”), through which the assignee will be responsible for the rights and obligations as of the execution of the Assignment Agreement. The agreement expires on November 6, 2018.

Expresso União: provides transportation to employees, and the agreement expires on April 2, 2018.

Pax Participações S.A.: provides consulting and advisory services, and the agreement has no expiration date.

Aller Participações: provides consulting and advisory services, and the agreement has no expiration date.

Limmat Participações S.A.: provides consulting and advisory services, and the agreement has no expiration date.

For the year ended December 31, 2017, GLA recognized total expenses related to these services of R$8,583 (R$13,013 and R$16,106 for the years ended December 31, 2016 and 2015, respectively). As of December 31, 2017, the balance payable to the related parties was R$769 (R$800 as of December 31, 2016), and was mainly related to services provided by Breda Transportes e Serviços S.A. and Viação Piracicabana Ltda.

10.2.   Contracts account opening UATP (“Universal Air Transportation Plan”) to grant credit limit

In September 2011, GLA entered into agreements with the related parties Empresa de Ônibus Pássaro Marron S.A., Viação Piracicabana Ltda., Thurgau Participações S.A., Comporte Participações S.A., Quality Bus Comércio De Veículos Ltda., Empresa Princesa Do Norte S.A., Expresso União Ltda., Breda Transporte e Serviços S.A., Oeste Sul Empreendimentos Imobiliários S.A. Spe., Empresa Cruz De Transportes Ltda., Expresso Maringá do Vale S.A., Glarus Serviços Tecnologia e Participações S.A., Expresso Itamarati S.A., Transporte Coletivo Cidade Canção Ltda., Limmat Participações S.A., Turb Transporte Urbano S.A., Vaud Participações S.A., Aller Participações S.A. and BR Mobilidade Baixada Santista S.A. SPE, all with no expiration date, whose purpose is to issue credits to purchase airline tickets issued by the Company. The UATP account (virtual card) is accepted as a payment method on the purchase of airline tickets and related services, seeking to simplify billing and facilitate payment between the participating companies.

10.3.   Agreement to use VIP lounge

On April 9, 2012, the Company entered into an agreement with Delta Air Lines Inc. (“Delta Air Lines”) for the mutual use of VIP lounge, with expected payments of US$20 per passenger. On August 30, 2016, the companies signed an  amendment of the agreement establishing a prepayment for the use of VIP lounge in the amount of US$3 milion. As of December 31, 2017, the outstanding balance was R$6,779.

10.4.    Maintenance and financing contract for parts and engine maintenance

In 2010, GLA entered into an engine maintenance service agreement with Delta Air Lines. The maintenance agreement was renewed on December 22, 2016 and will expire on December 31, 2020.

On January 31, 2017, GLA entered into a loan agreement with Delta Air Lines in the amount of US$50 milion, with a maturity date on December 31, 2020, with a refund obligation to be performed by the Company, GLA and Gol Finance, pursuant to the refund agreement entered into on August 19, 2015, with a guarantee granted by the Company to GAC. Under the terms of this agreement, the Company holds flexible payment maturities regarding engine maintenance services, through a credit limit available.

During the year ended December 31, 2017, the maintenance expenses performed by Delta Air Lines was R$403,195 (R$210,220 and R$307,658 for the years ended December 31, 2016 and 2015, respectively). As of December 31, 2017, the balance payable for engine maintenance  recorded in “Suppliers” was R$372,511 (R$201,170 as of December 31, 2016).

10.5.   Term loan guarantee

On August 31, 2015, Delta guaranteed a US$300 million Term Loan borrowed by Gol Finance through Morgan Stanley, with a term of 5 years. The Term Loan bears an effective interest rate of 6.70% per annum, payable semi-annually.    For additional information, see Note 16.

10.6.   Strategic business partnership agreement

On February 19, 2014, the Company signed a long term strategic partnership for commercial cooperation agreement with Air France-KLM with the purpose of sales activities improvements and codeshare expansion and mileage programs benefits between the companies for the customers in the Brazilian and European markets.

The agreement provides for the incentive investment in the Company in the amount of R$112,152, fully received by the Company. The agreement will mature within 5 years and the installments will be amortized on a monthly basis. As of December 31, 2017, the Company has deferred revenue in the amount of R$20,557 and R$3,426 recorded in "Other liabilities" in the current and noncurrent liabilities, respectively (R$22,430 and R$26,169 as of December 31, 2016, in the current and noncurrent liabilities, respectively). 

On January 1, 2017, the Company entered into an agreement with Air France – KLM to expand our strategic partnership by means of a credit line granted to us for the financing of maintenance payments. As of December 31, 2017, the Company had a balance of R$157,264 recorded under “Suppliers”.

10.7.   Agreements with Smiles

Operating Agreement: The operating agreement determines commercial and operational relations between the Company, GLA and Smiles, as well as exclusiveness characteristics related to the Smiles Program. The 20-year operating agreement will be automatically renewed for successive five-year periods if neither party objects at least two years prior to its expiration. If a party is given notice of non-renewal, it may terminate the agreement early by providing written notification to the other party six months prior to the termination date

Back office services agreement: On December 28, 2012, GLA entered into a back office services agreement with Smiles, that contains the terms, conditions and levels of certain services in connection with back office activities including controllership, accounting, internal controls and auditing, finance, information technology, call center, inventory and legal matters. The three-year Back Office Services Agreement is automatically renewed for successive three-year periods if neither party objects 12 months prior to its expiration. Smiles may terminate portions of the Back Office Services Agreement at any time by providing prior written notice to GLA.

Main miles and tickets purchase agreement: this agreement sets the prices and the terms and conditions for the purchase of miles and sales of tickets.

Advance airline ticket purchase agreement: on February 26, 2016, GLA entered into a miles and tickets purchase agreement with Smiles, totaling up to R$1.0 billion, providing for advance ticket sales to Smiles in various tranches through June 30, 2017. In 2016 and 2017, Smiles disbursed the total amount of trhe agreement, of which R$760 million in 2016 and R$ 240 milion in 2017. On April 5, 2017, the Company entered into the first amendment to the advance ticket purchase agreement for the acquisition of new credits in the amount of R$480 milion, which will be paid in installments to be agreed upon by the parties. In 2017, the Company paid R$280 milion related to this first amendment

All the balances and transactions between the Company, GLA and Smiles were eliminated in the consolidated financial statements.

10.8.   Remuneration of key management personnel

	12/31/2017	12/31/2016	12/31/2015
Salaries and benefits (*)	57,838	38,134	28,700
Related taxes and charges	6,019	4,690	5,352
Share-based payments	11,219	11,226	10,469
Total	75,076	54,050	44,521

(*) Includes the Board of Directors’ and Audit Committee’s compensation.

As of and for the years ended December 31, 2017, 2016 and 2015, the Company did not offer post-employment benefits, and there were no severance benefits or other long-term benefits for the management and other employees. Specific benefits can be provided to the Company’s key management personnel, limited to a short-term period.

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11. Share-based payments

12 Months Ended

Dec. 31, 2017

Share-based Payments

Share-based payments

The Company has two share-based payment plans offered to its management personnel: the Stock Option Plan and the Restricted Share Plan. Both plans stimulate and promote the alignment of the Company’s goals with management and employees, mitigate risks for the Company resulting from the loss of executives and strengthen the productivity and commitment of these executives to long-term results.

11.1.   Stock options plan - GLAI

The beneficiaries of the Company’s stock option plan are allowed to purchase shares at the price agreed on the grant date after three years from the grant date, provided that they maintain their employment relationship up to the end of this period.

The stock options vest 20% as from the first year, an additional 30% as from the second year, and the remaining 50% as from the third year. All stock options may also be exercised within 10 years after the grant date. For stock options granted, the expected volatility of the options is based on the historical volatility of 252 working days of the Company’s shares traded on the B3.

Year of grant	Date of the Board Meeting	Total options granted	Number of options outstanding as of 12/31/2017	Exercise price of the option (in Reais)	Fair value  of the option at grant date (in Reais)	Estimated volatility of share price	Expected dividend yield	Risk-free return rate	Average remaining maturity (in years)
2009 (a)	02/04/2009	1,142,473	149,000	10.52	8.53	76.91%	-	12.66%	1.0
2010 (b)	02/02/2010	2,774,640	796,872	20.65	16.81	77.95%	2.73%	8.65%	2.0
2011	12/20/2010	2,722,444	538,915	27.83	16.07 (c)	44.55%	0.47%	10.25%	2.9
2012	10/19/2012	778,912	392,895	12.81	5.32 (d)	52.25%	2.26%	9.00%	4.7
2013	05/13/2013	802,296	437,315	12.76	6.54 (e)	46.91%	2.00%	7.50%	5.3
2014	08/12/2014	653,130	392,042	11.31	7.98 (f)	52.66%	3.27%	11.00%	6.6
2015	08/11/2015	1,930,844	1,323,567	9.35	3.37 (g)	55.57%	5.06%	13.25%	7.6
2016	09/30/2016	5,742,732	4,237,873	2.62	1.24 (h)	98.20%	6.59%	14.25%	8.7
2017	08/08/2017	947,767	771,814	8.44	7.91 (i)	80.62%	1.17%	11.25%	9.6
Total		17,495,238	9,040,293	8.63					7.1

(a)   In April 2010, an additional grant of 216,673 shares referring to the 2009 plan was approved.

(b)   In April 2010, an additional grant of 101,894 shares referring to the 2010 plan was approved.

(c)   The fair value is calculated by the average value from R$16.92, R$16.11 and R$15.17 for the respective vesting periods (2011, 2012 and 2013).

(d)   The fair value is calculated by the average value from R$6.04, R$5.35 and R$4.56 for the respective vesting periods (2012, 2013 and 2014).

(e)   The fair value is calculated by the average value from R$7.34, R$6.58 and R$5.71 for the respective vesting periods (2013, 2014 and 2015).

(f)    The fair value is calculated by the average value from R$8.20, R$7.89 and R$7.85 for the respective vesting periods (2014, 2015 and 2016).

(g)   The fair value is calculated by the average value from R$3.61, R$3.30 and R$3.19 for the respective vesting periods (2015, 2016 and 2017).

(h)   On July 27, 2016, an additional grant of 900,000 shares related to the 2016 plan was approved. The fair value was calculated by the average value from R$1.29, R$1.21 and R$1.22 for the respective vesting periods (2017, 2018 and 2019).

(i)    The fair value is calculated by the average value from R$8.12, R$7.88 and R$7.72 for the respective periods of vesting (2017, 2018 and 2019).

The movement in the stock options outstanding for the year ended December 31, 2017 is as follows:

	Number of stock options	Weighted average exercise price
Options outstanding as of December 31, 2016	8,992,055	9.14
Options granted	947,767	8.44
Options cancelled and adjustments in estimated prescribed rights	(422,763)	22.37
Options exercised	(476,766)	5.65
Options outstanding as of December 31, 2017	9,040,293	8.63
Number of options exercisable as of:
December 31, 2016	6,214,124	13.66
December 31, 2017	7,307,151	9.59

11.2.   Restricted share plan - GLAI

The Company’s restricted share plan was approved at the Extraordinary Shareholders’ Meeting of October 19, 2012, and the first grant was approved at the Board of Directors’ Meeting of November 13, 2012.

Year of grant	Date of Board Meeting	Total shares granted	Total vested shares	Average fair value at grant date
2014	08/13/2014	804,073	-	11.31
2015	04/30/2015	1,207,037	875,923	9.35
2016	09/30/2016	4,007,081	3,137,373	2.62
2017	08/08/2017	1,538,213	1,283,895	8.44
Total		7,556,404	5,297,191

The movement in the restricted shares for the year ended December 31, 2017 is as follows:

	Total restricted shares
Restricted shares outstanding as of December 31, 2016	4,609,256
Restricted shares granted	1,538,213
Restricted shares cancelled and adjustments in estimated expired rights	(235,097)
Restricted shares transferred (*)	(615,181)
Restricted shares outstanding as of December 31, 2017	5,297,191

 (*) The restricted shares transferred totaled R$6,566.

11.3.   Stock option plan – Smiles Fidelidade

The beneficiaries of the Smiles Fidelidade’s stock option plan are allowed to purchase shares at the price agreed on the grant date after three years from the grant date, provided that they maintain their employment relationship up to the end of this period.

The stock options vest 20% as from the first year, an additional 30% as from the second year, and the remaining 50% as from the third year. All stock options may also be exercised within 10 years after the grant date. For stock options granted, the expected volatility of the options is based on the historical volatility of 252 working days of the Smiles’ shares traded on the B3.

Year of  grant	Date of Board Meeting	Total options  granted	Number of options outstanding as of 12/31/2017	Exercise price of the option (in Reais)	Average fair value at grant date	Estimated volatility of share price	Expected dividend yield	Risk-free return rate	Average remaining maturity (in years)
2013	08/08/2013	1,058,043	54,003	21.70	4.25 (a)	36.35%	6.96%	7.40%	5.5
2014	02/04/2014	1,150,000	199,050	31.28	4.90 (b)	33.25%	10.67%	9.90%	6.0
Total		2,208,043	253,053

(a)         The fair value is calculated by average value from R$4.84 and R$4.20 for the vesting periods in 2013 and 2014, and R$3.73 for the vesting periods in 2015 and 2016.

(b)         The fair value is calculated by average value from R$4.35, R$4.63, R$4.90, R$5.15 and R$5.37 for the respective vesting periods from 2014 to 2018.

The movement of the stock options outstanding for the year ended December 31, 2017 is as follows:

	Number of stock options	Weighted average exercise price
Options outstanding as of December 31, 2016	483,053	30.21
Options exercised	(230,000)	16.45
Options outstanding as of December 31, 2017	253,053	29.24

For the years ended December 31, 2017, 2016 and 2015, the Company recorded in equity a result from share-based payments of R$11,956, R$12,658 and R$13,516, respectively, attributable to equity holders of the parent, and R$192, R$413 and R$836, respectively, related to non-controlling interests, for the plans presented above, with a corresponding entry in profit or loss in Salaries.

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12. Investments

12 Months Ended

Dec. 31, 2017

Investment Abstract

Investments

The amount of the investments is related to: i) 25.4% of the capital of Netpoints Fidelidade S.A., held by Smiles Fidelidade, and ii) SCP Trip, held by GLA. Both investments are accounted for under the equity method.

The financial information of the Company’s investees and the changes in the investments balance for the years ended December 31, 2017 and 2016 are as follows:

	Trip		Netpoints (b)
	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Relevant information of the Company’s investees:
Total number of shares	-	-	130,492,408	130,492,408
Capital stock	1,318	2,083	75,351	75,351
Interest	60.00%	60.0%	25.4%	25.4%
Total equity (deficit)	2,225	3,395	(22,997)	(14,991)
Goodwill on investment acquisition	-	-	-	15,184
Adjusted equity (a)	1,333	2,038	-	-
Net income (loss) for the year	907	2,081	(9,344)	(29,050)
Adjusted net income (loss) for the year attributable to the Company’s interest (a)	544	1,250	-	(2,530)

Changes on investments	Trip	Netpoints	Total
Balances as of December 31, 2015	2,781	15,643	18,424
Equity results	1,250	(2,530)	(1,280)
Capital increase	-	3,439	3,439
Loss on capital increase (b)	-	(1,368)	(1,368)
Dividends	(1,993)	-	(1,993)
Balances as of December 31, 2016	2,038	15,184	17,222
Equity results	544	-	544
Write-off of Netpoints goodwill	-	(15,184)	(15,184)
Dividends	(1,249)	-	(1,249)
Balance as of December 31, 2017	1,333	-	1,333

(a) Reflects the Company’s interest on the total equity and net income (loss) of the respective investee.

(b) In September 2016, the Board of Directors of Smiles approved the subscription of the capital increase of its associated Netpoints through the issuance of 20,230,201 new shares. Accordingly, the interest in Netpoints from Smiles increased from 21.3% to 25.4%.

Partial disposal of equity interest – Smiles S.A.

On June 26, 2017, the Company sold 1,250,000 shares of Smiles S.A. through a stock auction totaling R$76,313. With this sale, the Company reduced its interest in Smiles from 53.8% to 52.7%, while maintaining its position as controlling shareholder. The gain from this partial sale of investment was recorded under equity as “Sale of interest in subsidiary”. The amounts related to this transaction are as follows:

	12/31/2017
Shares sold	1,250,000
Value per share	61.05
Sale value	76,313
Investment value	(4,863)
Income taxes on gain on capital decrease (*)	(8,150)
Gain from capital decrease in  investment in subsidiary	63,300

(*) Refers to the income and social contribution taxes on the transaction.

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13. Earnings (loss) per share

12 Months Ended

Dec. 31, 2017

Earnings Loss Per Share

Earnings (loss) per share

Although there are differences between common and preferred shares in terms of voting rights and priority in case of liquidation, the Company’s preferred shares are not entitled to receive any fixed dividends. The Company’s preferred shares carry economic rights, including dividend rights, 35 times those of common shares. Accordingly, net income (loss) for the year attributable to equity holders of the parent is allocated in proportion to equity holders’ interest in common shares and preferred shares.

Consequently, earnings (loss) per share is calculated by dividing the net income or loss by the weighted average number of all classes of shares outstanding during the period.

Diluted earnings or loss per share are computed including stock options granted to key management and employees using the treasury shares method when the effect is dilutive. The Company has only the stock option plan in the category of potentially dilutive shares, as Note 11. For the years ended December 31, 2017, 2016 and 2015, only the stock option plan granted in 2016 had exercise prices higher than the accumulated market average price (in the money) and, therefore, has a dilutive effect. The other plans presented exercise prices lower than the average of the accumulated market prices (out of money), and have antidilutive effect, so were not considered for the diluted earnings per share.

The antidilutive effect of all potential shares is disregarded in calculating diluted earnings or loss per share.

The following table sets forth net income (loss) for the year attributable to equity holders of the parent for the periods indicated:

	Parent Company and Consolidated
	12/31/2017			12/31/2016			12/31/2015
	Common	Preferred	Total	Common	Preferred	Total	Common	Preferred	Total
Numerator
Net income (loss) for the year attributable to equity holders of the parent	7,869	11,315	19,184	353,129	496,490	849,619	(2,123,945)	(2,336,938)	(4,460,883)
	7,869	11,315	19,184	353,129	496,490	849,619	(2,123,945)	(2,336,938)	(4,460,883)
Denominator
Weighted average number of outstanding shares (in thousands) (*)	4,981,350	204,664		5,035,037	202,261		5,035,037	158,285
Effects of dilution from stock options	-	2,614		-	347		-	-
Adjusted weighted average number  of outstanding shares and diluted presumed  conversions (in thousands) (*)	4,981,350	207,278		5,035,037	202, 608		5,035,037	158,285
Basic earnings (loss) per share	0.002	0.055		0.070	2.455		(0.422)	(14.764)
Diluted earnings (loss) per share	0.002	0.055		0.070	2.450		(0.422)	(14.764)

(*) Weighted average considers the split of common shares approved at the Company’s extraordinary shareholders’ meeting on March 23, 2015, in accordance with IAS 33. Earnings per share presented herein reflects the economic rights attributable to each class of shares.

Diluted loss per share is calculated by the weighted average number of outstanding shares, in order to assume the conversion of all potential dilutive shares. Diluted result per share is calculated based on considering the instruments that may have a potential dilutive effect in the future, such as share-based payment instruments, described in Note 11. However, due to the losses reported for the year ended December 31, 2015, these instruments issued have antidilutive effect and, therefore, were not considered in the weighted average number of outstanding shares for the computation of diluted loss per share.

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14. Property, plant and equipment

12 Months Ended

Dec. 31, 2017

Property, plant and equipment [abstract]

Property, plant and equipment

	12/31/2017				12/31/2016
	Average annual depreciation rate	Cost	Accumulated depreciation	Net amount	Net amount
Flight equipment
Aircraft held under finance leases	5.9%	2,000,866	(649,430)	1,351,436	1,411,932
Sets of replacement parts and spare engines	7.2%	1,345,161	(494,684)	850,477	804,974
Aircraft reconfigurations/overhauling	26.8%	1,807,133	(941,372)	865,761	615,812
Aircraft and safety equipment	20.0%	843	(438)	405	467
Tools	10.0%	36,199	(18,124)	18,075	14,617
		5,190,202	(2,104,048)	3,086,154	2,847,802
Impairment losses (*)	-	(26,076)	-	(26,076)	(30,726)
Total flight equipment		5,164,126	(2,104,048)	3,060,078	2,817,076
Property, plant and equipment in use
Vehicles	20.0%	10,548	(9,100)	1,448	1,660
Machinery and equipment	10.0%	57,834	(37,792)	20,042	22,343
Furniture and fixtures	10.0%	28,148	(16,639)	11,509	10,061
Computers and peripherals	20.0%	39,458	(30,464)	8,994	7,401
Communication equipment	10.0%	2,617	(1,914)	703	823
Facilities	10.0%	1,534	(1,222)	312	332
Maintenance center - Confins	10.0%	107,127	(80,209)	26,918	38,096
Leasehold improvements	18.5%	33,111	(19,571)	13,540	8,248
Construction in progress	-	33,503	-	33,503	31,571
Total property, plant and equipment in use		313,880	(196,911)	116,969	120,535
		5,478,006	(2,300,959)	3,177,047	2,937,611
Advances for property, plant and equipment acquisition	-	18,720	-	18,720	87,399
Total property, plant and equipment		5,496,726	(2,300,959)	3,195,767	3,025,010

(*) Refers to provisions for impairment losses for rotable items, classified under "Sets of replacement parts and spare engines", recorded by the Company in order to present its assets according to the actual capacity for the generation of economic benefits.

Changes in property, plant and equipment balances are as follows:

	Property, plant and equipment under finance lease	Other flight equipment	Advances for property, plant and equipment acquisition	Other	Total
Balances as of December 31, 2015	2,081,973	1,419,596	623,843	131,202	4,256,614
Additions	-	425,218	71,503	27,400	524,121
Disposals	(597,136)	(122,487)	(607,947)	(9,911)	(1,337,481)
Depreciation	(72,905)	(317,183)	-	(28,156)	(418,244)
Balances as of December 31, 2016	1,411,932	1,405,144	87,399	120,535	3,025,010
Additions	-	827,658	263,328	30,511	1,121,497
Disposals	(5,639)	(135,381)	(332,007)	(10,506)	(483,533)
Depreciation	(54,857)	(388,779)	-	(23,571)	(467,207)
Balances as of December 31, 2017	1,351,436	1,708,642	18,720	116,969	3,195,767

During the year ended December 31, 2017, the Company reviewed the useful life of its assets and concluded that the estimates used are in line with its business plan.

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15. Intangible assets

12 Months Ended

Dec. 31, 2017

Intangible Assets

Intangible assets

	Goodwill	Airport operating rights	Software	Total
Balances as of December 31, 2015	542,302	1,038,900	133,403	1,714,605
Additions	-	-	55,316	55,316
Disposals	-	-	(781)	(781)
Amortization	-	-	(29,424)	(29,424)
Balances as of December 31, 2016	542,302	1,038,900	158,514	1,739,716
Additions	-	-	55,449	55,449
Disposals	-	-	(9,662)	(9,662)
Amortization	-	-	(38,218)	(38,218)
Balances as of December 31, 2017	542,302	1,038,900	166,083	1,747,285

Goodwill and other intangible assets were subject to impairment tests as of December 31, 2017 and 2016 using the discounted cash flows for each cash generating unit to calculate the value in use.

In order to assess the recoverable value, assets are grouped at the lowest levels for which there are separately identifiable cash flows (Cash-Generating Units – “CGUs”). In order to determine the carrying amount of each cash-generating unit, the Company considers the intangible assets recorded and all necessary tangible assets, given that it will only generate economic benefits by using the combination of both.

The Company allocates goodwill to two cash-generating units: GLA and Smiles, and the airport operating rights are fully allocated to GLA, as shown below:

	Goodwill GLA	Goodwill Smiles	Airport operating rights
December 31, 2017
Book value	325,381	216,921	1,038,900
Book value - CGU	1,061,177	395,105	1,038,900
Value in use	15,206,092	5,464,287	5,069,156
Pre tax discount rate	15.46%	19.26%	14.50%
Perpetuity growth rate	3.50%	3.50%	3.50%
December 31, 2016
Book value	325,381	216,921	1,038,900
Book value - CGU	2,433,861	56,880	1,038,900
Value in use	3,636,201	9,476,173	4,816,306
Pre tax discount rate	23.92%	14.51%	27.34%
Perpetuity growth rate	3.50%	3.50%	8.50%

The amount of value in use was compared to the carrying amount of each cash generating unit and, as a result, the Company did not recognized impairment losses.

The assumptions used in the impairment tests of intangible assets are consistent with internal projections, for a five-year period and after five-year period it was considered a perpetuity growth rate, and operating plans, both reviewed and approved by the Company’s Management. The discounted cash flows that determined the value in use of the cash generating units was prepared in accordance with the Company's business plan approved on January 11, 2018.

The main assumptions taken into consideration by the Company to determine the value in use of the cash-generating units are:

Capacity and fleet: consider the use, the aircraft capacity used in each route and the projected size of the fleet in operation.

Demand: market efficiency is the key input for the projection of the Company's growth in demand. Management believes that market efficiency is the ratio of market share and its participation in the load factor. This indicator reflects how efficiently the Company uses its share of the market’s total supply based on how much demand for air transportation it absorbs.

Revenue per passenger: considers the average price charged by GLA and the effects of market variables (see the variables used below).

Operating costs related to the business: based on the historical cost and updated by indicators, such as inflation, supply, demand and variation of the U.S. dollar.

The Company also considered market variables, including the GDP (source: Brazilian Central Bank), the U.S. dollar (source: Brazilian Central Bank), kerosene prices (per barrel) (source: Brazilian National Agency of Petroleum - ANP) and interest rates (source: Bloomberg).

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16. Short and long-term debt

12 Months Ended

Dec. 31, 2017

Short And Long-term Debt

Short and long-term debt

	Maturity of the contract	Interest rate	12/31/2017	12/31/2016
Short-term debt
Local currency
Safra (a)	May 2018	128% of DI	-	9,690
Debentures VI (g)	Sep. 2019	132% of DI	395,093	-
Interest accrued	-	-	23,921	45,026
Foreign currency (US$)
J.P. Morgan (b)	Aug. 2019	1.32% p.a.	43,909	42,275
Finimp (c)	Dec. 2018	5.75% p.a.	240,973	174,428
Engine Facility (Cacib) (d)	Jun. 2021	Libor 3m+2.25% p.a.	17,145	16,889
ExIm (Cacib)  (e)	Apr. 2019	Libor 3m+0.75% p.a.	47,507	-
Senior Notes I (f)	Apr. 2017	7.60% p.a.	-	182,418
Senior Notes V (k)	Dec. 2018	9.71% p.a.	23,258	-
PK Finance (q)	Aug. 2026	5.70% p.a.	7,883	-
Interest accrued	-	-	74,989	97,670
			874,678	568,396
Finance leases	Jun. 2025	4.04% p.a.	288,194	266,894
Total short-term debt			1,162,872	835,290
Long-term debt
Local currency
Safra (a)	May. 2018	128% of DI	-	4,871
Debentures VI (g)	Sep. 2019	132% of DI	617,333	1,005,242
Foreign currency (US$)
J.P. Morgan (b)	Aug. 2019	Libor 3m+0.75% p.a.	12,451	11,142
Engine Facility (Cacib) (d)	Jun. 2021	Libor 3m+2.25% p.a.	142,137	156,917
ExIm (Cacib)  (e)	Apr. 2019	Libor 3m+0.75% p.a.	35,634	-
PK Finance (p)	Aug. 2026	5.70% p.a.	78,239	-
Senior Notes II (h)	Jul. 2020	9.64% p.a.	314,589	368,000
Senior Notes III (i)	Feb. 2023	11.30% p.a.	69,074	68,053
Senior Notes IV (j)	Jan. 2022	9.24% p.a.	299,524	889,595
Senior Notes V (k)	Dec. 2018	9.71% p.a.	-	43,010
Senior Notes VI (l)	Jul. 2021	9.87% p.a.	127,181	120,631
Senior Notes VII (m)	Dec. 2028	9.84% p.a.	54,752	52,721
Senior Notes VIII (n)	Jan. 2025	7.19% p.a.	1,597,713	-
Perpetual Notes (o)	-	8.75% p.a.	438,201	428,436
Term Loan (p)	Aug. 2020	6.70% p.a.	968,010	944,194
			4,754,838	4,092,812
Finance leases	Jun. 2025	4.04% p.a.	1,187,957	1,451,118
Total long-term debt			5,942,795	5,543,930
Total			7,105,667	6,379,220

(a)   Credit line obtained by Webjet fully repaid in 2017, see Note 16.3.

(b)   Issuance of 3 series of Guaranteed Notes to finance engine maintenance, as described in Note 10.4.

(c)   Credit line with Banco do Brasil and Safra of import financing for purchase of spare parts and aircraft equipment.

(d)   Credit line raised on September 30, 2014 with Credit Agricole.

(e)   Credit line raised on August 11, 2017 with Credit Agricole.

(f)    Issuance of Senior Notes I by Gol Finance Inc. on March 22, 2007, which was used for prepayments of financing for purchase of aircraft. The total amount was settled on its maturity in April 2017.

(g)   Issuance of 105,000 debentures by GLA on September 30, 2015 for early settlement of the Debentures IV and V.

(h)   Issuance of Senior Notes II by Gol Finance Inc. on July 13, 2010 in order to repay debts held by the Company.

(i)    Issuance of Senior Notes III by GLA on February 7, 2013 in order to finance the prepayment of debts due within the next 3 years. The total amount of notes was transferred to Gol Finance along with the financial investments acquired on the date of issuance, and a portion of the loan was prepaid.

(j)    Issuance of  Senior Notes IV by Gol Finance on September 24, 2014 in order to finance partial repurchase of Senior Notes I, II and III.

(k)   Issuance of Senior Notes series V by Gol Finance on July 7, 2016, as a result of the Exchange Offer of Senior Notes I, II, III, IV and Perpetual Notes.

(l)    Issuance of Senior Notes series VI by Gol Finance on July 7, 2016, as a result of the Exchange Offer of Senior Notes I, II, III, IV and Perpetual Notes.

(m)  Issuance of Senior Notes series VII by Gol Finance on July 7, 2016, as a result of the Exchange Offer of Senior Notes I, II, III, IV and Perpetual Notes.

(n)   Issuance of  Senior Notes series VIII by Gol Finance on December 11, 2017 to repurchase Senior Notes and for other general purposes.

(o)   Issuance of Perpetual Notes by Gol Finance on April 5, 2006 to finance aircraft purchase and repayment of loans.

(p)   Term Loan issued by Gol Finance on August 31, 2016 for aircraft purchases and bank repayment of loans, with backstop guarantee from Delta. For additional information, see Note 10.5.

(q)   Loan obtained with PK Finance, with a guarantee of four engines, as described Note 16.2.

Total debt includes issuance costs of R$101,795 (R$97,433 as of December 31, 2016) which will be amortized over the term of the related debt.

As of December 31, 2017, the maturities of long-term debt, excluding finance leases, are as follows:

	2019	2020	2021	2022	2022 onwards	Without maturity date	Total
Local currency
Debentures VI	617,333	-	-	-	-	-	617,333
Foreign currency (US$)
J.P. Morgan	12,451	-	-	-	-	-	12,451
Engine Facility (Cacib)	17,177	17,177	107,783	-	-	-	142,137
ExIm (Cacib)	35,634	-	-	-	-	-	35,634
PK Finance	8,352	8,838	9,375	9,933	41,741	-	78,239
Senior Notes II	-	314,589	-	-	-	-	314,589
Senior Notes III	-	-	-	-	69,074	-	69,074
Senior Notes IV	-	-	-	299,524	-	-	299,524
Senior Notes VI	-	-	127,181	-	-	-	127,181
Senior Notes VII	-	-	-	-	54,752	-	54,752
Senior Notes VIII	-	-	-	-	1,597,713	-	1,597,713
Perpetual Notes	-	-	-	-	-	438,201	438,201
Term Loan	-	968,010	-	-	-	-	968,010
Total	690,947	1,308,614	244,339	309,457	1,763,280	438,201	4,754,838

The fair value of debt as of December 31, 2017 is as follows:

	Book value (c)	Market value
Senior Notes and Perpetual Notes (a)	2,974,501	2,955,391
Debentures (b)	1,036,348	1,072,232
Term Loan (b)	989,572	1,013,929
Other	629,095	724,788
Total	5,629,516	5,766,340

(a) Fair value obtained through current market quotations.

(b) Fair value obtained through internal valuation.

(c) The book value presented is net of interest and issuance costs.

16.1.     Covenants

As of December 31, 2017, long-term debt (excluding perpetual notes and finance leases) that amounted to R$4,316,637 (R$3,664,376 as of December 31, 2016) is subject to restrictive covenants, including but not limited to those that require the Company to maintain liquidity requirements and the coverage of expense with interest.

The Company has restrictive covenants on the Term Loan and Debentures VI with the following financial institutions: Bradesco and Banco do Brasil. In the Term Loan, the Company must make deposits for reaching contractual limits of the debt pegged to the U.S. dollar. As of December 31, 2017, the Company did not have collateral deposits linked to the contractual limits of the Term Loan. As of December 31, 2017, Debentures VI were subject to the following covenants: (i) net debt/EBITDAR below 5.50 and (ii) debt coverage ratio (ICSD) of at least 1.33. According to the most recent measurements on December 31, 2017, the ratios obtained were: (i) net debt/EBITDAR of 4.70; and (ii) debt coverage ratio (ICSD) of 1.43. As a result, the Company met the minimum required levels for the covenants and, consequently, it was in compliance with the covenants. The next measurement will be for the end of the first half of 2018.

16.2.    Restructuring of loans and financing in the year ended December 31, 2017

Import financing (Finimp): the Company, through its subsidiary GLA, obtained new funding in the year and renegotiated the maturities of the agreements, with the issue of promissory notes as collateral for these transactions, which are part of a credit line maintained by the Company for import financing in order to purchase spare parts and aircraft equipment. The funding operations during the year were as follows:

Renegotiation and issuance	Bank	Principal amount		Interest	Maturity
date		(US$)	(R$)	rate (p.a.)	date
01/13/2017	Banco do Brasil	5,245	16,803	6.13%	01/05/2018
02/01/2017	Banco do Brasil	8,595	27,057	6.15%	01/28/2018
02/10/2017	Banco do Brasil	4,815	15,001	6.14%	02/05/2018
04/20/2017	Banco do Brasil	4,274	13,442	6.20%	04/16/2018
05/31/2017	Banco Safra	5,407	17,540	4.85%	05/29/2018
06/26/2017	Banco do Brasil	9,638	31,929	5.95%	06/21/2018
06/26/2017	Banco Safra	4,571	15,142	5.17%	06/21/2018
06/30/2017	Banco do Brasil	10,436	34,526	5.85%	06/28/2018
06/30/2017	Banco do Brasil	7,823	25,879	5.85%	06/28/2018
10/30/2017	Banco do Brasil	2,693	8,768	5.53%	01/12/2018
12/04/2017	Banco Safra	9,347	30,383	5.11%	11/29/2018

Engine maintenance financing (J.P. Morgan): On January 11, 2017, GLA obtained a credit line drawn by issuing Guaranteed Notes for engine maintenance services with Delta Air Lines. The amount of the credit line was R$33,620 (US$10,456 on the transaction date), with issuance costs amounting to R$1,802 (US$560 on the transaction date). On August 1, 2017, GLA obtained a new credit line of the same contract, in the amount of R$32,451 (US$10,414 on the transaction date), with issuance costs totaling R$1,628 (US$514 on the transaction date). Both credit lines have quarterly amortization and interest payments, and a financial guarantee from Ex-Im Bank.

Financing of Wi-Fi Kits (Cacib): On August 11, 2017, GLA obtained a credit line for the installation of Wi-Fi technology with GOGO INC., by issuing Guaranteed Notes, in the amount of R$19,365 (US$6,109 on the transaction date), with quarterly amortization and interest payments, issuance costs of R$1,166 (US$367 on the transaction date) and a financial guarantee from Ex-Im Bank.

PK Finance: On August 31, 2017, the Company obtained funding with a guarantee of four engines in the amount of R$84,342 (US$26,800 on the transaction date), with issuance costs amounting to R$512 (US$161 on the transaction date). This type of financing has monthly interest amortization and payment.

Engine maintenance financing (Cacib): On November 29, 2017, GLA obtained a credit line drawn by issuing Guaranteed Notes for engine maintenance services with Delta Air Lines. The amount of the credit line was R$32,136 (US$10,000 on the transaction date), with issuance costs amounting to R$1,866 (US$580 on the transaction date). On December 28, 2017, GLA obtained a credit line of the same contract, in the amount of R$33,080 (US$10,000 on the transaction date), with issuance costs totaling R$1,909 (US$578 on the transaction date). Both credit lines have quarterly amortization and interest payments, and a financial guarantee from Ex-Im Bank.

Senior Notes VIII: On December 11, 2017, the Company, through its subsidiary Gol Finance, issued senior notes due in 2025, in the amount of R$1,642,000 (US$500,000 on the transaction date), with issuance costs totaling R$45,172 (US$17,283 on the transaction date). The Senior Notes are guaranteed by the Company’s sureties, with half-yearly interest payments of 7.00% p.a. The proceeds will be used to repurchase other Notes and for corporate purposes in general.

The other existing loans and financing of the Company have not been affected by contractual alterations during the year ended December 31, 2017.

16.3.    Early repayment of debt during the year ended December 31, 2017

Safra: In the year ended December 31, 2017, Smiles Fidelidade fully paid its debt with Banco Safra, and the portion of the debt recorded as noncurrent was early repaid. As a result, the outstanding issuance costs of R$438 and the fine for the early repayment of the loan in the amount of R$137 were fully recorded in the financial result.

Senior Notes Tender Offer: As part of the debt restructuring process (as per Note 1), the Company used the proceeds from the issue of Senior Notes on December 11, 2017 to repurchase debt securities, as shown below:

	Type	Transaction date	Previous balance	Payments	New issues	Closing balance	Premium paid (*)
Senior Notes II	Tender offer	12/29/2017	116,968	(21,191)	-	95,777	(422)
Senior Notes IV	Tender offer	12/11/2017	276,730	(185,197)	-	91,533	(12,071)
Senior Notes V	Prepayment	12/19/2017	14,685	(7,379)	-	7,306	-
Senior Notes VIII	Issuance	12/11/2017	-	-	482,717	482,717	-
Total in U.S. dollars			408,383	(213,767)	482,717	677,333	(12,493)
Total in Brazilian Reais			1,331,982	(707,141)	1,596,828	2,221,669	(41,327)

(*) Amounts recorded under “Exchange offer costs” in the financial results.

16.4.     Finance leases

The future payments of finance agreements indexed to U.S. dollars are detailed as follows:

	12/31/2017	12/31/2016
2017	-	350,883
2018	333,795	328,931
2019	319,511	307,027
2020	267,477	267,885
2021	224,591	227,204
2022	119,200	115,367
Thereafter	326,823	292,362
Total minimum lease payments	1,591,397	1,889,659
Less total interest	(115,246)	(171,647)
Present value of minimum lease payments	1,476,151	1,718,012
Less current portion	(288,194)	(266,894)
Noncurrent portion	1,187,957	1,451,118

The discount rate used to calculate present value of the minimum lease payments was 4.04% as of December 31, 2017 (4.52% as of December 31, 2016). There are no significant differences between the present value of minimum lease payments and the fair value of these financial liabilities.

The Company extended the maturity date of the financing for some of its aircraft leased for 15 years using the SOAR framework (mechanism for extending financing amortization and repayment), which enables the performance of calculated withdrawals to be settled by payment in full at the end of the lease agreement. As of December 31, 2017, amounts of withdrawals for the repayment at maturity date of the lease agreements totaled R$255,644 (R$217,065 as of December 31, 2016) and are recorded in non-current debt.

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17. Suppliers - Forfaiting

12 Months Ended

Dec. 31, 2017

Suppliers Forfaiting Abstract

Suppliers - Forfaiting

The Company has operations with Banco Safra that allow suppliers to receive their receivables in advance. This type of operation does not change the existing commercial conditions between the Company and its suppliers. Obligations to suppliers have a longer payment term and a discount rate of 1.03% p.m. As of December 31, 2017, the amount recorded under current liabilities totaled R$78,416.

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18. Taxes payable

12 Months Ended

Dec. 31, 2017

Taxes Payable

Taxes payable

	12/31/2017	12/31/2016
PIS and COFINS	40,036	89,332
ICMS installments	-	4,852
Tax regularization program in installment payments - PRT and PERT	68,596	-
Withholding income tax on salaries	32,070	29,519
ICMS	45,492	43,226
Tax on import	3,454	3,454
IRPJ and CSLL payable	5,299	12,489
Other	6,200	6,105
Total	201,147	188,977
Current	134,951	146,174
Noncurrent	66,196	42,803

Brazilian tax regularization programs

In the year ended December 31, 2017, the Company and its subsidiary GLA entered into tax regularization programs:

(i)   Tax Regularization Program (“PRT”) on March 10, 2017, pursuant to Provisional Presidential Decree No. 766 of January 4, 2017, including tax debts that matured on November 30, 2017. Under this program, GLA chose to pay 76% of its debt by using tax losses carryforward and the remaining 24% in 24 monthly installments adjusted based on the SELIC interest rate as of the month it adhered to the program.

(ii)  Special Tax Regularization Program (“PERT”) in September 2017, pursuant to Provisional Presidential Decree No. 783 of May 31, 2017, including tax debts owed to the Brazilian Federal Tax Authorities and to the Office of the General Counsel for the Federal Treasury, which matured on April 30, 2017. Under this program, GLA chose, in September 2017, to pay 5% of total debt in five monthly installments and the remaining amount with tax losses carryforward after reducing interest by 90% and fines by 70%. For most of its debits, GLAI chose, in October 2017, to pay 20% of total debt in three installments and the remainder in 36 monthly installments, reducing interest by 50%, fines by 80% and legal charges by 100%.

The breakdown of the obligation included in the above-mentioned installment payment programs is as follows:

	2017
IPI on customs import	92,153
PIS and COFINS	98,491
PIS and COFINS on financial income (b)	131,844
Income and social contribution taxes	23,372
Other	4,655
Total debt	350,515
Reductions in interest and fines (c)	(21,249)
Use of tax losses carryforward (a)	(227,689)
Amount payable in installments	101,577

(a)     Reistered in "Other, net". See Note 8.2.

(b)     Included in May 2017, after the PRT and PERT adoption.

(c)    Reduction of 90% in interest and 50% in fines for PERT.

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19. Advance ticket sales

12 Months Ended

Dec. 31, 2017

Advance Ticket Sales

Advance ticket sales

As of December 31, 2017, the balance of Advance ticket sales classified in current liabilities was R$1,456,939 (R$1,185,945 as of December 31, 2016) and is represented by 4,964,925 tickets sold and not yet used (4,447,824 as of December 31, 2016) with an average use of 48 days (46 days as of December 31, 2016).

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20. Mileage program

12 Months Ended

Dec. 31, 2017

Mileage Program

Mileage program

As of December 31, 2017, the balance of Smiles loyalty program deferred revenue was R$765,114 (R$781,707  as of December 31, 2016) and R$188,204 (R$219,325 as of December 31, 2016) classified in current and noncurrent liabilities, respectively.

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21. Provisions

12 Months Ended

Dec. 31, 2017

Provisions [abstract]

Provisions

	Insurance provision	Provision for aircraft and engine return (a)	Provision for legal proceedings (b)	Total
Balances as of December 31, 2015	742	725,176	144,355	870,273
Additional provisions recognized	4,237	97,423	189,244	290,904
Utilized provisions	(4,237)	(121,855)	(127,551)	(253,643)
Foreign exchange rate variation, net	-	(116,803)	(516)	(117,319)
Balances as of December 31, 2016	742	583,941	205,532	790,215
Additional provisions recognized (a)	(1)	38,819	158,263	197,081
Utilized provisions (b)	-	(220,082)	(155,999)	(376,081)
Foreign exchange rate variation, net	-	(1,827)	(199)	(2,026)
Balances as of December 31, 2017	741	400,851	207,597	609,189
As of December 31, 2016
Current	742	65,760	-	66,502
Noncurrent	-	518,181	205,532	723,713
Total	742	583,941	205,532	790,215
As of December 31, 2017
Current	741	45,820	-	46,561
Noncurrent	-	355,031	207,597	562,628
Total	741	400,851	207,597	609,189

(a) The additions of provisions for aircraft and engine return also include present value adjustment effects.

(b) include write-offs due to the revision of estimates and processes settled.

(a)     Provision for aircraft and engine return

The provision for aircraft and engine return considers the costs that meet the contractual conditions for the return of engines maintained under operating leases, as well as the costs to reconfigure aircraft without purchase option as described in the return conditions of the lease contracts, and which is capitalized in property, plant and equipment (aircraft reconfigurations/overhauling).

(b)   Provision for legal proceedings

As of December 31, 2017, the Company and its subsidiaries are parties to lawsuits and administrative proceedings. The lawsuits and administrative proceedings are classified into Operational (those arising from the Company’s normal course of operations), and Succession (those arising from the succession of former Varig S.A. obligations). 

The civil lawsuits are primarily related to compensation claims generally related to flight delays and cancellations, baggage loss and damage. The labor claims primarily consist of discussions related to overtime, hazard pay, risk premium and wage differences.

The provisions related to civil, labor and taxes suits, whose likelihood of loss is assessed as probable, are as follows:

	12/31/2017	12/31/2016
Civil	67,528	73,356
Labor	137,071	132,163
Taxes	2,998	13
Total	207,597	205,532

Provisions are reviewed based on the progress of the proceedings and history of losses based on the best current estimate for labor and civil lawsuits.

There are other civil and labor lawsuits assessed by management and its legal counsel as possible risk of loss, in the estimated amount of R$30,945 for civil claims and R$124,062 for labor claims as of December 31, 2017 (R$31,598 and R$79,532 as of December 31, 2016, respectively), for which no provisions are recognized.

The tax lawsuits below were evaluated by the Company’s management and its legal counsels as being relevant and with possible risk of loss as of December 31, 2017 and 2016:

·         GLA is discussing the non-incidence of the additional 1% COFINS rate on the imports of aircraft and parts, amounting R$48,596 (R$39,428 as of December 31, 2016). The Company’s legal counsel believes that the classification of possible risk was due to the fact that there was no express revocation of the tax relief (zero rate) granted to regular flight transportation companies.  

·         Tax on Services (ISS) in the amount of R$21,222 (R$19,443 as of December 31, 2016) arising from assessment notices issued by the Municipality of São Paulo against the Company, in the period from January 2007 to December 2010 regarding a possible ISS taxation on partnerships. The classification of possible risk of loss is a result from the matters under discussion being interpretative, and involves discussions of factual and evidential materials, and has no final positioning of the Superior Courts.  

·         Customs penalty in the amount of R$57,823 (R$45,689 as of December 31, 2016) relating to assessment notices issued against the Company for alleged breach of customs rules regarding procedures for temporary import of aircraft. The classification of possible risk is a result of the absence of a final positioning of the Superior Courts.  

·         BSSF goodwill (BSSF Air Holdings) in the amount of R$104,213 (R$47,572 as of December 31, 2016) related to an infraction notice due to the deductibility of the goodwill allocated to future profitability. The classification of possible risk is a result of the absence of a final opinion from the Superior Courts.  

·         GLA’s goodwill in the amount of R$80,198 (R$72,687 as of December 31, 2016) resulted from assessment notice related to the deductibility of the goodwill classified as future profitability. The classification of possible risk is a result of the absence of a final opinion from the Superior Courts.  

·         GLAI had been discussing the non-incidence of taxation of PIS and COFINS on revenues generated by interest attributable to shareholders’ equity related to the years from 2006 to 2008, paid by its subsidiary GTA Transportes Aéreos S.A., succeeded by GLA on September 25, 2008, wich amount assessed as possible loss was R$57,793 as of December 31, 2016. However, due to a recent unfavorable decision in a similar case, the Company reclassified the likelihood of loss in this case from possible to probable. As a result, the Company adhered to the Installment Payment Program (PERT) after the Federal Government signed Provisional Presidential Decree 783/17 into Law, including the amount of R$34,794 in tax installment payments. Additionally, the Company maintains escrow deposits with Bic Banco with a partial guarantee on the lawsuit of R$32,120 as disclosed in Note 5, which will be redeemed after the installment payment is fully settled.   

·         Tax on Industrialized Products (“IPI”): supposely levied on the importation of aircraft in the amount of R$115,136 as of December 31, 2016. On March 10, 2017, even though the lawsuit was not yet resolved in the administrative level, the Company included this tax in the PRT program, see Note 18, given that decisions in similar proceedings have not been favorable.  

There are other lawsuits that the Company’s Management and its legal counsels assess as possible risk of loss, in the estimated amount of R$58,750 (R$39,113 as of December 31, 2016) which added to the lawsuits mentioned above, totaled R$382,814 as of December 31, 2017 (R$436,861 as of December 31, 2016).

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22. Equity

12 Months Ended

Dec. 31, 2017

Equity

Equity

22.1.     Capital stock

As of December 31, 2017, the Company’s capital stock was R$3,082,802 and represented by 3,129,582,142 shares, comprised by 2,863,682,710 common shares and 265,899,432 preferred shares. The Fundo de Investimento em Participações Volluto (“Fundo Volluto”) is the Company’s controlling shareholder, which is equally controlled by Constantino de Oliveira Junior, Henrique Constantino, Joaquim Constantino Neto and Ricardo Constantino.

The Company’s shares are held as follows:

	12/31/2017			12/31/2016
	Common	Preferred	Total	Common	Preferred	Total
Fundo Volluto	100.00%	49.25%	61.19%	100.00%	33.88%	61.28%
Delta Air Lines, Inc.	-	12.38%	9.47%	-	16.19%	9.48%
Airfrance - KLM	-	1.60%	1.22%	-	2.09%	1.22%
Treasury shares	-	0.10%	0.08%	-	0.44%	0.26%
Other	-	0.93%	0.71%	-	1.11%	0.65%
Free float	-	35.74%	27.33%	-	46.29%	27.11%
Total	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%

The authorized capital stock as of December 31, 2017 was R$4.0 billion. Within the authorized limit, the Company can, once approved by the Board of Directors, increase its capital regardless of any amendment to its by-laws, by issuing shares, without necessarily maintaining the proportion between the different types of shares. Under the law terms, in case of capital increase within the authorized limit, the Board of Directors will define the issuance conditions, including pricing and payment terms.

On December 22, 2017, Fundo Volluto, the Company’s controlling shareholder, converted 2,171,354,430 common shares into preferred shares of the Company and now holds 130,953,776 preferred shares (accounting for 49.22% of the Company’s total preferred shares as of December 31, 2017). This conversion of common shares into preferred shares does not change the interest held by Fundo Volluto and other shareholders in the Company’s capital stock.

During the year ended December 31, 2017, the Company approved capital increases from the subscription of preferred shares as a result of the exercise of stock options, in the amounts of: (i) R$1,177 as of August 8, 2017, related to the exercise of 244,185 stock options; (ii) R$1,492 as of October 17, 2017, related to the exercise of 230,581 stock options; and (iii) R$23 as of December 13, 2017, related to the exercise of 2,000 stock options.

22.2.    Dividends

The Company’s By-laws provide for a mandatory minimum dividend to be paid to common and preferred shareholders, at least 25% of annual adjusted net income after compensation of accumulated losses and allocation to reserves in accordance with the Brazilian Corporate Law.

22.3.     Treasury shares

During the year ended December 31, 2017, the Company transferred 615,181 restricted shares to its beneficiaries (632,976 restricted shares in the year ended December 31, 2016).                                                                                                             

As of December 31, 2017, the Company had 278,612 treasury shares, totaling R$4,168, with a market value of R$4,068 (893,793 treasury shares, totaling R$13,371, with a market value of R$4,129 as of December 31, 2016).

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23. Revenue

12 Months Ended

Dec. 31, 2017

Net revenue

Revenue

	12/31/2017	12/31/2016	12/31/2015
Passenger transportation	9,479,242	8,948,170	8,954,034
Cargo	354,561	324,492	318,573
Mileage revenue	800,976	622,567	421,348
Other revenue (*)	657,609	652,602	690,044
Gross revenue	11,292,388	10,547,831	10,383,999
Related tax	(716,366)	(680,496)	(605,992)
Net revenue	10,576,022	9,867,335	9,778,007

(*) Includes revenues from unused passenger tickets, reissued tickets and cancellation of flight tickets of R$433,639, R$430,898, R$449,263, for the years ended December 31, 2017, 2016 and 2015, respectively                                            

Revenues are net of federal, state and municipal taxes, which are paid to the appropriate government entities.

Revenue by geographical location is as follows:

	12/31/2017	%	12/31/2016	%	12/31/2015	%
Domestic	9,044,990	85.5	8,395,364	85.1	8,670,023	88.7
International	1,531,032	14.5	1,471,971	14.9	1,107,984	11.3
Net revenue	10,576,022	100.0	9,867,335	100.0	9,778,007	100.0

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24. Financial results

12 Months Ended

Dec. 31, 2017

Financial Results

Financial results

	12/31/2017	12/31/2016	12/31/2015
Financial income
Income from derivatives	35,053	120,403	174,693
Income from short-term investments	119,863	152,656	178,147
Monetary variation	14,208	12,411	14,531
(-) Taxes on financial income (a)	(24,393)	(23,041)	(47,588)
Gain from the exchange offer	-	286,799	-
Interest income	18,245	4,651	8,539
Other	50,470	14,625	4,245
Total financial income	213,446	568,504	332,567
Financial expenses
Losses from derivatives	(40,770)	(277,183)	(124,536)
Interest on short and long-term debt	(727,285)	(787,661)	(885,947)
Bank charges and expenses	(61,711)	(96,515)	(60,760)
Monetary variation	(2,993)	(3,867)	(3,921)
Tender offer costs (b)	(53,041)	-	-
Other (c)	(164,661)	(106,338)	(253,727)
Total financial expenses	(1,050,461)	(1,271,564)	(1,328,891)
Exchange rate variation, net	(81,744)	1,367,937	(2,266,999)
Total	(918,759)	664,877	(3,263,323)

(a) Relative to taxes on financial income (PIS and COFINS), according to Decree 8,426 of April 1, 2015.

(b) Refers to the tender offer of Senior Notes. Includes the write-off of issuance costs of the tendered debt of R$11,714.

(c) Includes the partial amount regarding the accrued interest in the amount of R$23,345 related to provisions for PIS and COFINS on interest attributable to shareholders’ equity, through the adherence to PERT, see Note 18.

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25. Segments

12 Months Ended

Dec. 31, 2017

Segments

Segments

Operating segments are defined based on business activities from which it may earn revenues and incur expenses, which operating results are regularly reviewed by the Company’s relevant decision makers to evaluate performance and allocate resources to the respective segments. The Company holds two operating segments: flight transportation and the Smiles loyalty program.

The accounting policies of the operating segments are the same as those applied to the consolidated financial statements. Beginning in the year ended December 31, 2017, the Company is presenting the segment information of operating costs and expenses by nature. Additionally, the Company has distinct natures between its two operating segments, so there are no common costs and revenues between operating segments.

The Company is the controlling shareholder of Smiles Fidelidade, and the non-controlling interests of Smiles Fidelidade was 47.3%, 46.2% and 45.9% as of December 31, 2017, 2016 and 2015, respectively.

The information below presents the summarized financial position of the reportable operating segments as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015:

25.1.    Assets and liabilities of the operating segments

	12/31/2017
	Flight transportation	Smiles loyalty program	Combined  information	Eliminations	Total consolidated
Assets
Current	2,389,146	1,901,672	4,290,818	(945,820)	3,344,998
Noncurrent	6,769,399	269,239	7,038,638	(378,888)	6,659,750
Total assets	9,158,545	2,170,911	11,329,456	(1,324,708)	10,004,748
Liabilities
Current	5,508,427	1,096,357	6,604,784	(854,739)	5,750,045
Noncurrent	7,131,078	202,835	7,333,913	(10,264)	7,323,649
Total equity (deficit)	(3,480,960)	871,719	(2,609,241)	(459,705)	(3,068,946)
Total liabilities and equity (deficit)	9,158,545	2,170,911	11,329,456	(1,324,708)	10,004,748

	12/31/2016
	Flight  transportation	Smiles loyalty program	Combined information	Eliminations	Total consolidated
Assets
Current	1,426,750	1,413,422	2,840,172	(759,458)	2,080,714
Noncurrent	6,474,404	513,456	6,987,860	(664,219)	6,323,641
Total assets	7,901,154	1,926,878	9,828,032	(1,423,677)	8,404,355
Liabilities
Current	4,767,322	1,061,806	5,829,128	(980,386)	4,848,742
Noncurrent	6,782,835	229,725	7,012,560	(100,196)	6,912,364
Total equity (deficit)	(3,649,003)	635,347	(3,013,656)	(343,095)	(3,356,751)
Total liabilities and equity (deficit)	7,901,154	1,926,878	9,828,032	(1,423,677)	8,404,355

25.2.    Results of the operating segments

	12/31/2017
	Flight transportation	Smiles loyalty program (d)	Combined  information	Eliminations	Total  consolidated
Net revenue
Passenger (*)	8,785,938	-	8,785,938	399,867	9,185,805
Cargo and other (*)	768,566	-	768,566	(104,350)	664,216
Mileage revenue (*)	-	1,804,129	1,804,129	(1,078,128)	726,001
Total net revenue	9,554,504	1,804,129	11,358,633	(782,611)	10,576,022
Operating costs and expenses
Salaries	(1,654,388)	(53,723)	(1,708,111)	-	(1,708,111)
Aircraft fuel	(2,887,737)	-	(2,887,737)	-	(2,887,737)
Aircraft rent	(939,744)	-	(939,744)	-	(939,744)
Sales and marketing	(518,025)	(69,917)	(587,942)	(2,872)	(590,814)
Landing fees	(664,170)	-	(664,170)	-	(664,170)
Aircraft, traffic and mileage servicing	(649,126)	(990,685)	(1,639,811)	765,075	(874,736)
Maintenance, materials and repairs	(368,719)	-	(368,719)	-	(368,719)
Depreciation and amortization	(491,806)	(13,619)	(505,425)	-	(505,425)
Passenger service expenses	(437,045)	-	(437,045)	-	(437,045)
Other operating expenses	(591,087)	(26,385)	(617,472)	7,162	(610,310)
Total operating costs and expenses	(9,201,847)	(1,154,329)	(10,356,176)	769,365	(9,586,811)
Equity results	395,245	-	395,245	(394,701)	544
Operating result before financial result, net and income taxes	747,902	649,800	1,397,702	(407,947)	989,755
Financial results
Financial income	184,448	205,431	389,879	(176,433)	213,446
Financial expenses	(1,225,315)	(2,201)	(1,227,516)	177,055	(1,050,461)
Exchange rate variation, net	(78,462)	(3,284)	(81,746)	2	(81,744)
Total financial results	(1,119,329)	199,946	(919,383)	624	(918,759)
Income (loss) before income taxes	(371,427)	849,746	478,319	(407,323)	70,996
Income taxes	390,611	(89,131)	301,480	5,733	307,213
Net income for the year	19,184	760,615	779,799	(401,590)	378,209
Attributable to equity holders of the parent	19,184	401,590	420,774	(401,590)	19,184
Attributable to non-controlling interests of Smiles	-	359,025	359,025	-	359,025

	12/31/2016
	Flight transportation	Smiles loyalty program	Combined  information	Eliminations	Total  consolidated
Net revenue
Passenger (*)	8,340,545	-	8,340,545	330,897	8,671,442
Cargo and other (*)	729,096	-	729,096	426	729,522
Mileage revenue (*)	-	1,548,109	1,548,109	(1,081,738)	466,371
Total net revenue	9,069,641	1,548,109	10,617,750	(750,415)	9,867,335
Operating costs and expenses
Salaries	(1,615,740)	(41,045)	(1,656,785)	-	(1,656,785)
Aircraft fuel	(2,695,390)	-	(2,695,390)	-	(2,695,390)
Aircraft rent	(996,945)	-	(996,945)	-	(996,945)
Sales and marketing	(494,076)	(61,908)	(555,984)	-	(555,984)
Landing fees	(687,366)	-	(687,366)	-	(687,366)
Aircraft, traffic and mileage servicing	(660,009)	(828,887)	(1,488,896)	735,399	(753,497)
Maintenance, materials and repairs	(593,090)	-	(593,090)	-	(593,090)
Depreciation and amortization	(439,173)	(8,495)	(447,668)	-	(447,668)
Passenger service expenses	(461,837)	-	(461,837)	-	(461,837)
Other operating expenses	(316,766)	(4,197)	(320,963)	15	(320,948)
Total operating costs and expenses	(8,960,392)	(944,532)	(9,904,924)	735,414	(9,169,510)
Equity results	287,134	(2,530)	284,604	(285,884)	(1,280)
Operating result before financial result, net and income taxes	396,383	601,047	997,430	(300,885)	696,545
Financial results
Financial income	395,901	212,758	608,659	(40,155)	568,504
Financial expenses	(1,311,940)	(168)	(1,312,108)	40,544	(1,271,564)
Exchange rate variation, net	1,362,145	5,792	1,367,937	-	1,367,937
Total financial results	446,106	218,382	664,488	389	664,877
Income before income taxes	842,489	819,429	1,661,918	(300,496)	1,361,422
Income taxes	7,130	(271,156)	(264,026)	4,968	(259,058)
Net income for the year	849,619	548,273	1,397,892	(295,528)	1,102,364
Attributable to equity holders of the parent	849,619	295,528	1,145,147	(295,528)	849,619
Attributable to non-controlling interests of Smiles	-	252,745	252,745	-	252,745

	12/31/2015
	Flight  transportation	Smiles loyalty program	Combined information	Eliminations	Total consolidated
Net revenue
Passenger (*)	8,294,463	-	8,294,463	288,925	8,583,388
Cargo and other (*)	941,928	47,199	989,127	(19,198)	969,929
Miles revenue (*)	-	1,172,322	1,172,322	(947,632)	224,690
Total net revenue	9,236,391	1,219,521	10,455,912	(677,905)	9,778,007
Operating costs and expenses
Salaries	(1,544,157)	(36,374)	(1,580,531)	-	(1,580,531)
Aircraft fuel	(3,301,368)	-	(3,301,368)	-	(3,301,368)
Aircraft rent	(1,100,086)	-	(1,100,086)	-	(1,100,086)
Sales and marketing	(566,329)	(51,074)	(617,403)	-	(617,403)
Landing fees	(681,378)	-	(681,378)	-	(681,378)
Aircraft, traffic and mileage servicing	(615,792)	(700,200)	(1,315,992)	637,917	(678,075)
Maintenance, materials and repairs	(603,925)	-	(603,925)	-	(603,925)
Depreciation and amortization	(416,856)	(2,835)	(419,691)	-	(419,691)
Passenger service expenses	(481,765)	-	(481,765)	-	(481,765)
Other operating expenses	(485,738)	(13,183)	(498,921)	5,300	(493,621)
Total operating costs and expenses	(9,797,394)	(803,666)	(10,601,060)	643,217	(9,957,843)
Equity results	179,377	(5,932)	173,445	(177,386)	(3,941)
Operating result before financial result, net and income taxes	(381,626)	409,923	28,297	(212,074)	(183,777)
Financial results
Financial income	287,058	156,042	443,100	(110,533)	332,567
Financial expenses	(1,424,321)	(15,104)	(1,439,425)	110,534	(1,328,891)
Exchange rate variation, net	(2,264,750)	(2,248)	(2,266,998)	(1)	(2,266,999)
Total financial results	(3,402,013)	138,690	(3,263,323)	-	(3,263,323)
Income (loss) before income taxes	(3,783,639)	548,613	(3,235,026)	(212,074)	(3,447,100)
Income taxes	(677,244)	(178,691)	(855,935)	11,795	(844,140)
Net income (loss) for the year	(4,460,883)	369,922	(4,090,961)	(200,279)	(4,291,240)
Attributable to equity holders of the parent	(4,460,883)	200,279	(4,260,604)	(200,279)	(4,460,883)
Attributable to non-controlling interests of Smiles	-	169,643	169,643	-	169,643

(*) Eliminations are related to transactions between GLA and Smiles Fidelidade.

In the stand alone financial statements of the subsidiary Smiles Fidelidade, which represents the segment Smiles Loyalty Program, and in the information provided to the relevant decision makers, the revenue recognition occurs upon redemption of the miles by the participants. Under the perspective of Smiles Fidelidade, this measurement is appropriate given that this is when the revenue recognition cycle is complete. At this point, Smiles has transferred to its suppliers the obligation to provide services or deliver products to its customers.

However, from a consolidated perspective, the revenue recognition cycle related to miles exchanged for flight tickets is only complete when the passengers are effectively transported. Therefore, for purposes of reconciliation with the consolidated assets, liabilities and income and expenses, as well as for purposes of equity method of accounting and for consolidation purposes, the Company performed, in addition to elimination entries, consolidating adjustments to adjust the accounting practices related to Smiles’ revenues. In this case, under the perspective of the consolidated financial statements, the mileages that were used to redeem airline tickets are only recognized as revenue when passengers are transported, in accordance with accounting practices and policies adopted by the Company.

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26. Commitments

12 Months Ended

Dec. 31, 2017

Commitments

Commitments

As of December 31, 2017, the Company had 120 firm orders for aircraft acquisition with Boeing. These aircraft acquisition commitments include estimates for contractual price increases during the construction phase.  As of December 31, 2017, the approximate amount of firm orders, not including contractual discounts, was R$45,090,382 (US$13,630,708), and are segregated according to the following years:

	12/31/2017	12/31/2016
2018	-	1,787,388
2019	1,117,604	2,917,833
2020	4,538,258	4,471,172
2021	6,198,259	6,106,634
2022	6,353,457	6,229,538
Thereafter	26,882,804	26,519,864
Total	45,090,382	48,032,429

As of December 31, 2017, from the total order commitments mentioned above, the Company had the amount of R$6,463,564 (US$1,953,919) related to advances for aircraft acquisition to be disbursed, in accordance with the following schedule:

	12/31/2017	12/31/2016
2017	-	286,829
2018	316,215	483,518
2019	773,268	658,930
2020	848,003	835,468
2021	852,458	839,856
2022	866,119	853,316
Thereafter	2,807,501	2,766,624
Total	6,463,564	6,724,541

The installment financed by long-term debt with aircraft guarantee through the U.S. Ex-Im Bank corresponds approximately to 85% of the aircraft total cost. Other establishments finance the acquisitions with equal or higher percentages, reaching up to 100%. 

The Company performs payments related to aircraft acquisition through its own funds, short and long-term debt, cash provided by operating activities, short and medium-term lines of credit and supplier financing.

The Company leases its entire aircraft fleet through a combination of operating and finance leases. As of December 31, 2017, the total fleet leased was comprised of 119 aircraft, of which 88 were under operating leases and 31 were recorded as finance leases. During the year ended December 31, 2017, the Company returned 11 aircraft under operating lease contracts. In addition, the Company changed the classification of three finance lease agreements, which are now classified as operating leases due to the new characteristics arising from the renewal of these contracts.

As of December 31, 2017, the Company recorded operating lease installments in the amount of R$139,110, of which R$28,387 under current liabilities and R$110,723 under noncurrent liabilities (R$7,233 was recorded under current liabilities as of December 31, 2016). Such amounts refer to negotiations with lessors that resulted in postponement of the original payment flows of the leases.

On February 14, 2017 and November 27, 2017, the Company entered in sale-leaseback transactions for 10 aircraft with AWAS and GECAS. The aircraft should be delivered between June 2018 and August 2019 and, pursuant to the agreement, the leases will have a 12-year term as of the arrival date of each aircraft. Under these agreements, AWAS and GECAS undertake to carry out all necessary disbursements to pay for advances based on the disbursement schedule of the aircraft acquisition agreement. Under the same agreement, the Company shall act as a guarantor for the transaction if AWAS and GECAS fail to comply with the commitments established in such agreements.

26.1. Operating leases

The future payments of non-cancelable operating lease contracts are denominated in U.S. dollars, and are as follows:

	12/31/2017	12/31/2016
2017	-	857,747
2018	858,508	839,343
2019	928,226	889,940
2020	888,944	873,692
2021	746,595	745,719
2022	630,477	646,388
Thereafter	1,251,964	1,393,896
Total minimum lease payments	5,304,714	6,246,725

26.2.             Sale-leaseback transactions

In the year ended December 31, 2017, the Company did not enter in sale-leaseback transactions (net gain of R$233,483 related to 7 aircraft in the year ended December 31, 2016).

Additionally, the Company also has balances of deferred losses from transactions carried out between 2006 and 2009, in the amount of R$2,887 (R$9,959 as of December 31, 2016).

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27. Financial instruments and risk management

12 Months Ended

Dec. 31, 2017

Financial Instruments And Risk Management

Financial instruments and risk management

The Company and its subsidiaries have financial asset and financial liability transactions, which consist in part of derivative financial instruments. The financial derivative instruments are used to hedge against the inherent risks related to the Company’s operations. The Company and its subsidiaries consider as most relevant risks: fuel price, foreign currency and interest rate. These risks can be mitigated by using exchange swap derivatives, futures and options contracts based on oil, U.S. dollar and interest markets. The contracts may be held by exclusive investment funds, as described in the Company’s Risk Management Policy.

Financial instruments are managed by the Risk Committee in line with the Risk Management Policy approved by the Risk Policy Committee and submitted to the Board of Directors. The Risk Policy Committee sets guidelines and limits, monitors controls, including mathematical models used to continuously monitor exposures and possible financial effects, and also prevents the execution of speculative financial instruments transactions.

The Company does not hedge its total risk exposure, and is, therefore, subject to market fluctuations for a significant portion of its exposed assets and liabilities. Decisions on the portion to be protected consider the financial risks and the costs for such protection and are determined and reviewed at least quarterly in line with Risk Policy Committee strategies. The results from operations and the application of risk management controls are part of the monitoring process by the Risk Policy Committee and have been satisfactory to the proposed objectives.

The description of the consolidated account balances and the categories of financial instruments included in the statements of financial position as of December 31, 2017 and 2016 is as follows:

	Measured at fair value through profit or loss		Loans and receivables (financing) (c)
	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Assets
Cash and cash equivalents (a)	434,295	269,797	592,567	292,410
Short-term investments (a)	955,589	431,233	-	-
Restricted cash	268,047	168,769	-	-
Derivatives assets	40,647	3,817	-	-
Trade receivables	-	-	936,478	760,237
Deposits (b)	-	-	655,244	756,810
Other assets	-	-	123,721	118,058
Liabilities
Debt	-	-	7,105,667	6,379,220
Suppliers	-	-	1,471,150	1,111,514
Derivatives liabilities	34,457	89,211	-	-
Operating leases	-	-	139,110	7,233

(a)   The Company manages its financial investments to pay its short-term operational expenses.

(b)   Excludes judicial deposits, as described in Note 9.

(c)   Items classified as amortized cost refer to credits, debt with private institutions which, in any early settlement, there are no substantial alterations in relation to the values recorded, except the amounts related to Perpetual Notes and Senior Notes, as disclosed in Note 16. The fair values approximate the book values, according to the short-term maturity period of these assets and liabilities. During the year ended December 31, 2017, there was no change on the classification between categories of the financial instruments.

As of December 31, 2017 and 2016, the Company did not have financial assets classified as available for sale.

The Company's derivative financial instruments were recognized as follows:

	Fuel	Foreign currency	Interest rate	Equity forward (**)	Total
Derivative assets (liabilities) as of December 31, 2015 (*)	-	1,766	(141,443)	-	(139,677)
Fair value variations:
Net gains (losses) recognized in profit or loss (a)	309	(40,931)	(1)	-	(40,623)
Losses recognized in other comprehensive income (loss)	-	-	(4,842)	-	(4,842)
Settlements during the year	3,508	39,165	57,075	-	99,748
Derivative assets (liabilities) as of December 31, 2016 (*)	3,817	-	(89,211)	-	(85,394)
Fair value variations:
Net gains recognized in profit or loss (a)	13,768	-	-	11,094	24,862
Losses recognized in other comprehensive income (loss)	35,505	-	(1,093)	-	34,412
Settlements (payments received) during the year	(12,443)	-	55,847	(11,094)	32,310
Derivative assets (liabilities) as of December 31, 2017 (*)	40,647	-	(34,457)	-	6,190
Changes in other comprehensive income (loss)
Balances as of December 31, 2015	-	-	(178,942)	-	(178,942)
Fair value adjustments during the year	-	-	(4,842)	-	(4,842)
Net reversal to profit or loss (b)	-	-	128,731	-	128,731
Tax effects	-	-	(92,179)	-	(92,179)
Balances as of December 31, 2016	-	-	(147,229)	-	(147,229)
Fair value adjustments during the year	35,505	-	(1,093)	-	34,412
Net reversal to profit or loss (b)	-	-	33,501	-	33,501
Balances as of December 31, 2017	35,505	-	(114,821)	-	(79,316)
Effects on profit or loss (a-b)	13,768	-	(33,501)	11,094	(8,639)
As of December 31, 2017
Recognized in operating costs an expenses	8,626	-	(11,548)	-	(2,922)
Recognized in financial results	5,142	-	(21,953)	11,094	(5,717)
As of December 31, 2016
Recognized in operating costs an expenses	-	-	(12,574)	-	(12,574)
Recognized in financial results	309	(40,931)	(116,158)	-	(156,780)
As of December 31, 2015
Recognized in operating costs an expenses	-	-	(13,150)	-	(13,150)
Recognized in financial results	(29,964)	102,696	(22,575)	-	50,157

(*)  Classified as "Derivatives assets" if the amount results in an asset or "Derivatives liabilities" if the amount results in a liability.

(**) In 2017, the Company carried out transactions with shares of third-party companies traded on B3 in the amount of R$106,976, and contracted a term derivative attached to the transaction, in order to minimize the risk of volatility of the shares borrowed in the market. This operation was fully settled with the respective derivative in December 2017.

The Company may adopt hedge accounting for derivatives contracted to hedge interest rate risk classified as "cash flow hedge" and that qualify for this classification as per IAS 39. As of December 31, 2017, the Company adopts cash flow hedge for the interest rate (mainly Libor interest rates) and jet fuel.

The cash flow hedge is programmed to be recycled to profit or loss in the periods stated bellow:

	2018	2019	2020	2021	2022	Thereafter
Interest rate	(14,028)	(15,099)	(14,062)	(12,328)	(11,013)	(48,291)
Fuel	35,505	-	-	-	-	-
Recycle expectation (*)	21,477	(15,099)	(14,062)	(12,328)	(11,013)	(48,291)

(*) The positive amounts represent receivables and the negative amounts represent payables.

27.1.    Market risks

a)    Fuel price risk

The aircraft fuel prices fluctuate due to the volatility of the price of crude oil by product price fluctuations. To mitigate the risk of fuel price, the Company held the purchase option attached to WTI, as of December 31, 2017. In the year ended December 31, 2017, the Company recognized total gains of R$13,768 (gain of R$309 in the year ended December 31, 2016 and loss of R$29,964 in the year ended December 31, 2015) with fuel hedge transactions.

In the year ended December 31, 2017, the Company held derivatives operations designated as “hedge accounting” (as of December 31, 2016 and 2015, the Company did not hold derivatives operations designated as “hedge accounting”).

b)    Foreign currency risk

Foreign currency risk derives from the possibility of unfavorable fluctuation of foreign currencies to which the Company’s liabilities or cash flows are exposed. As of December 31, 2017, the Company had no outstanding derivative financial instruments. The Company recognized a loss on foreign currency derivatives in the amount of R$40,931 for the year ended December 31, 2016 and gain of R$102,969 in the year ended December 31, 2015). The Company does not have foreing currency derivatives designated as “hedge accounting”.

The Company’s foreign currency exposure is summarized below:

	12/31/2017	12/31/2016
Assets
Cash and cash equivalents, short-term investments and restricted cash	1,215,716	548,792
Trade receivables	126,140	104,800
Deposits	655,244	756,810
Derivatives	40,647	3,817
Other assets	-	10,184
Total assets	2,037,747	1,424,403
Liabilities
Short and long-term debt	4,593,169	3,596,379
Finance leases	1,476,151	1,718,012
Foreign suppliers	644,775	344,654
Derivatives	34,457	89,211
Operating leases	139,110	7,233
Total liabilities	6,887,662	5,755,489
Exchange exposure	4,849,915	4,331,086
Commitments not recorded in the statements of financial position
Future commitments resulting from operating leases	5,304,714	6,246,725
Future commitments resulting from firm aircraft orders	45,090,382	48,032,429
Total	50,395,096	54,279,154
Total foreign currency exposure - R$	55,245,011	58,610,240
Total foreign currency exposure - US$	16,700,426	17,983,566
Exchange rate (R$/US$)	3.3080	3.2591

The Company’s foreign currency exposure mainly comprises U.S. Dollar rate.

c)     Interest rate risk

The Company is mainly exposed to lease transactions indexed to variations in the Libor rate until the aircraft is received. To mitigate such risks, the Company has derivative financial instruments of interest rate (Libor) swaps. During the year ended December 31, 2017, the Company recognized a total loss with interest hedging transactions in the amount of R$33,501 (loss of R$128,732 and R$35,725 in the years ended December 31, 2016 and 2015, respectively).

As of December 31, 2017, 2016 and 2015, the Company and its subsidiaries had interest rate swap derivatives recorded as hedge accounting.

27.2.    Credit risk

The credit risk is inherent in the Company’s operating and financing activities, mainly represented by cash and cash equivalents, short-term investments and trade receivables. Financial assets classified as cash, cash equivalents and short-term investments are deposited with counterparties rated investment grade or higher by S&P or Moody's (between AAA and AA-), pursuant to risk management policies. The financial institutions in which the Company concentrates more than 10% of its total financial assets are Itaú and Banco do Brasil. Other assets are diluted among other financial institutions, pursuant to the Company’s risk policy.  Trade receivables consists of amounts falling due from credit card operators, travel agencies, installment sales and government entities, which leaves the Company exposed to a small portion of the credit risk of individuals and other entities. Credit limits are set for all customers based on internal credit rating criteria and carrying amounts represent the maximum credit risk exposure. Customer creditworthiness is assessed based on an internal system of extensive credit rating. Outstanding trade receivables are frequently monitored by the Company.  

Derivative financial instruments are contracted in the over-the-counter market (OTC) with counterparties rated investment grade or higher, or in a commodities and futures exchange (B3 or NYMEX), thus substantially mitigating credit risk. The Company's obligation is to evaluate counterparty risk involved in financial instruments and periodically diversify its exposure.

27.3.    Liquidity risk

The Company is exposed to two distinct forms of liquidity risk: (i) market prices, which vary in accordance with the types of assets and markets where they are traded, and (ii) cash flow liquidity risk related to difficulties in meeting the contracted operating obligations at the maturity dates. In order to manage liquidity risk, the Company invests its funds in liquid assets (government bonds, CDBs and investment funds with daily liquidity) and its Cash Management Policy requires the weighted average maturity of its debt to be longer than the weighted average term of its investment portfolio term.

The schedules of financial liability hold by the Company as of December 31, 2017 and 2016 is as follows:

	Less than 6  months	6 - 12 months	1 - 5 years	More than 5 years	Total
Short and long-term debt	369,496	793,376	2,651,018	3,291,777	7,105,667
Suppliers	1,245,352	3,772	222,026	-	1,471,150
Suppliers - Forfaiting	78,416	-	-	-	78,416
Derivatives liabilities	34,457	-	-	-	34,457
Operating leases	28,387	-	110,723	-	139,110
As of December 31, 2017	1,756,108	797,148	2,983,767	3,291,777	8,828,800
Short and long-term debt	499,542	335,748	2,654,007	2,889,923	6,379,220
Suppliers	1,097,997	-	13,517	-	1,111,514
Derivatives liabilities	89,211	-	-	-	89,211
Operating leases	3,215	4,018	-	-	7,233
As of December 31, 2016	1,689,965	339,766	2,667,524	2,889,923	7,587,178

27.4.    Capital management

The Company seeks alternatives to capital in order to meet its operational needs, aiming a capital structure that takes into account suitable parameters for the financial costs, the maturities of funding and its guarantees. The Company monitors its financial leverage ratio, which corresponds to net debt, including short and long-term debt. The table below shows the Company’s capital management as of December 31, 2017 and 2016:

	12/31/2017	12/31/2016
Short and long-term debt	7,105,667	6,379,220
(-) Cash and cash equivalents	(1,026,862)	(562,207)
(-) Short-term investments	(955,589)	(431,233)
(-) Restricted cash	(268,047)	(168,769)
A - Net debt	4,855,169	5,217,011
B – Total deficit	(3,068,946)	(3,356,751)
C = (B + A) - Total capital and net debt	1,786,223	1,860,260

27.5.    Sensitivity analysis of financial instruments

The Company also analyzes the impact of the financial instrument fluctuation on the profit or loss and total equity considering:

·  Increase and decrease by 25% and -50% in fuel prices, by keeping all the other variables constant;

·     Increase and decrease by 25% and -50% in the U.S. dollar exchange rate, by keeping all the other variables constant;

·              Increase and decrease by 25% and -50% in the Libor interest rate, by keeping all the other variables constant.

The estimates presented do not necessarily reflect the amounts to be reported in future financial statements. The use of different methodologies and/or assumptions may have a material effect on the estimates presented.

The tables below show the sensitivity analysis of foreign currency exposure, derivatives positions and interest rates on December 31, 2017 to market risks considered relevant by Management. In the tables, positive values are displayed as asset exposures (assets higher than liabilities) and negative values are exposed liabilities (liabilities greater than assets).

a)    Fuel risk

The Company and its subsidiaries contract crude oil derivatives (WTI, Brent) and its byproducts (Heating Oil) to hedge fluctuations in jet fuel prices. Historically, oil prices are highly correlated with aircraft fuel prices.

	1Q18	2Q18	3Q18	4Q18	Total 12M
Percentage of fuel exposure hedged	27%	10%	6%	5%	12%
Amount in barrels (thousand barrels)	855	360	220	163	1,598
Future rate agreed per barrel (US$)	51.89	51.33	51.46	51.58	51.67
Total in thousands of Brazilian Reais	146,760	61,124	37,453	27,813	273,120

b)    Foreign currency risk

As of December 31, 2017, the Company adopted the closing exchange rate of R$3.3080/US$1.00 as likely scenario. The table below shows the sensitivity analysis and the effect on profit or loss of exchange rate fluctuations in the exposure amount of the period as of December 31, 2017:

	Exchange rate	Effect on profit/loss
Net liabilities exposed to the risk of appreciation of the U.S. dollar (R$3.3080/US$1.00)	3.3080	(4,849,915)
Dollar depreciation (-50%)	1.6540	2,424,957
Dollar depreciation (-25%)	2.4810	1,212,479
Dollar appreciation (+25%)	4.1350	(1,212,479)
Dollar appreciation (+50%)	4.9620	(2,424,957)

c)     Interest rate risk

As of December 31, 2017, the Company holds financial investments and financial liabilities indexed to several rates, and position in Libor derivatives. In the sensitivity analysis of non-derivative financial instruments, it was considered the impacts on yearly interest of the exposed values as of December 31, 2017 (see Note 16) arising from fluctuations in interest rates, according to the scenarios presented below. The amounts show the impacts on profit or loss according to the scenarios presented below:

	Financial debt net of short-term investments (a)		Derivatives (c)
Risk	Increase in the CDI rate	Decrease in the Libor rate	Decrease in the  Libor rate
Referential rates	6.89%	1.69%	1.69%
Exposure amount (probable scenario) (b)	1,129,300	(287,608)	(34.457)
Possible adverse scenario (+25%)	90,595	(6,091)	(730)
Remote adverse scenario (+50%)	108,714	(7,309)	(876)

(a)     Total invested and raised in the financial market at the CDI rate. A negative amount means more debt than investment.

(b)    Balances recorded on December 31, 2017.

(c)     Derivatives contracted to hedge the Libor rate variation embedded in the agreements for future delivery of aircraft.

Measurement of the fair value of financial instruments

In order to comply with the disclosure requirements for financial instruments measured at fair value, the Company and its subsidiaries must classify its instruments in Levels 1 to 3, based on observable fair value levels:

·       Level 1: Fair value measurements are calculated based on quoted prices (without adjustment) in active market or identical liabilities;

·       Level 2: Fair value measurements are calculated based on other variables besides quoted prices included in Level 1, that are observable for the asset or liability directly (such as prices) or indirectly (derived from prices); and

·       Level 3: Fair value measurements are calculated based on valuation methods that include the asset or liability but that are not based on observable market variables (unobservable inputs).

The following table shows a summary of the Company’s and its subsidiaries’ financial instruments measured at fair value, including their related classifications of the valuation method, as of December 31, 2017 and 2016:

		12/31/122017		12/31/2016
	Fair value level	Book value	Fair value	Book value	Fair value
Cash and cash equivalents	Level 2	434,295	434,295	269,797	269,797
Short-term investments	Level 1	32,701	32,701	41,104	41,104
Short-term investments	Level 2	922,888	922,888	390,129	390,129
Restricted cash	Level 2	268,047	268,047	168,769	168,769
Derivatives assets	Level 2	40,647	40,647	3,817	3,817
Derivatives liabilities	Level 2	(34,457)	(34,457)	(89,211)	(89,211)

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28. Changes in liabilities arising from financing activities

12 Months Ended

Dec. 31, 2017

Changes In Liabilities Arising From Financing Activities

Changes in liabilities arising from financing activities

The changes in liabilities arising from financing activities in the years ended December 31, 2017, 2016 and 2015 are as follows:

12/31/2017
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Interest paid on loans	Import financing	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	6,379,220	612,396	-	(505,105)	63,066	68,895	502,529	(15,334)	7,105,667
Non-controlling interests from Smiles	293,247	(254,892)	359,025	-	-	-	-	14,633	412,013
Capital stock	3,080,110	2,692	-	-	-	-	-	-	3,082,802
Share issuance costs	(155,618)	(523)	-	-	-	-	-	523	(155,618)

12/31/2016
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Repurchase of debt securities	Interest paid on loans	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	9,304,926	(890,559)	-	(286,799)	(606,405)	(1,220,608)	627,672	(549,007)	6,379,220
Non-controlling interests from Smiles	224,022	(171,829)	252,745	-	-	-	-	(11,691)	293,247
Capital stock	3,080,110	-	-	-	-	-	-	-	3,080,110
Share issuance costs	(155,223)	(395)	-	-	-	-	-	-	(155,618)

12/31/2015
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Repurchase of debt securities	Interest paid on loans	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	6,235,239	426,973	-	-	(548,773)	(2,337,999)	600,410	253,078	9,304,926
Non-controlling interests from Smiles	185,413	(136,822)	169,643	-	-	-	-	5,788	224,022
Capital stock	2,618,799	465,048	-	-	-	-	-	(3,737)	3,080,110
Share issuance costs	(150,214)	(5,009)	-	-	-	-	-	-	(155,223)

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29. Insurance

12 Months Ended

Dec. 31, 2017

Insurance

Insurance

As of December 31, 2017, insurance coverage by nature, considering the aircraft fleet and related to the maximum reimbursable amounts indicated in U.S. dollars, along with Smiles’ insurance coverage, is as follows:

Aviation	In thousands of Brazilian Reais	In thousands of U.S. dollars
GLA
Guarantee - hull/war	12,504,240	3,780,000
Civil liability per event/aircraft (*)	2,481,000	750,000
Inventories (local) (*)	992,400	300,000
Smiles
Rent insurance (Rio Negro – Alphaville complex)	1,470	-
D&O liability insurance	50,000	-
Fire insurance (Property insurance Rio Negro – Alphaville complex)	9,025	-

(*)   Values per incident and annual aggregate.

Pursuant to Law No. 10,744 of October 9, 2003, the Brazilian government assumed the commitment to complement any civil-liability expenses related to third parties caused by war or terrorist events, in Brazil or abroad, which GLA may be required to pay, for amounts exceeding the limit of the insurance policies effective since September 10, 2001, limited to the amount in Brazilian Reais equivalent to US$1.0 billion.

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30. Subsequent events

12 Months Ended

Dec. 31, 2017

Subsequent Events

Subsequent events

On January 16, 2018, the subsidiary Gol Finance approved a tender offer of up to US$50 milion of the Senior Notes due in 2020.

On January 30, 2018, the offering of Senior Notes by Gol Finance was approved, in the amount of US$150 milion, due in 2025, which priced on February 2, 2018. The new Notes will be consolidated with, and form a single series with, the US$500 milion aggregate principal amount of notes that were originally issued on December 11, 2017, raising the outstanding total on the tranche to US$650 milion. Gol Finance will use part of the proceeds from the Senior Notes due in 2025 to fully redeem the Senior Notes due in 2020 that were offered after the Tender Offer and pay related costs and expenses.

Pursuant to a share repurchase program announced on April 10, 2018, to comply with the Company's restricted shares plan, the Company repurchased, through transactions on the B3, 740,000 preferred shares, representing 0.2776% of the total preferred shares issued and 0.2124% of the Company's capital stock, calculated considering the ratio of 35:1 of dividend rights of holders of common shares to those of holders of preferred shares. As a result of these repurchases, the Company holds 1,018,612 preferred shares in treasury, representing 0.3821% of the total preferred shares issued and 0.2924% of our capital stock. The Company terminated the share repurchase program on April 19, 2018.

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2. Approval and summary of significant accounting policies applied in preparing the financial statements (Policies)

12 Months Ended

Dec. 31, 2017

Approval And Summary Of Significant Accounting Policies Applied In Preparing Financial Statements

Basis of preparation

These financial statements were prepared based on historical cost, except for certain financial assets and liabilities that are measured at fair value and investments measured using the equity method.

The Company's consolidated financial statements as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 were prepared based on the going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business.

Except for Gol Dominicana, which functional currency is U.S. dollar, the Company and its subsidiaries functional currency is the Brazilian Real. The presentation currency of these consolidated financial statements is the Brazilian Real.

Certain comparative amounts were reclassified to conform to the current year presentation.

Basis of consolidation

The consolidated financial statements comprise Gol Linhas Aéreas Inteligentes S.A., its subsidiaries, jointly controlled and associate, as follows:

Entity	Date of constitution	Location	Operational activity	Type of control	% equity interest
					12/31/2017	12/31/2016
Extensions:
GAC	03/23/2006	Cayman Islands	Aircraft acquisition	Direct	100.0	100.0
Gol Finance Inc.	03/16/2006	Cayman Islands	Financial funding	Direct	100.0	100.0
Gol Finance	06/21/2013	Luxembourg	Financial funding	Direct	100.0	100.0
Subsidiaries:
GLA	04/09/2007	Brazil	Flight transportation	Direct	100.0	100.0
Smiles Fidelidade	08/01/2011	Brazil	Loyalty program	Direct	52.7	53.8
Smiles Viagens (*)	08/10/2017	Brazil	Travel agency	Indirect	100.0	-
Gol Dominicana	02/28/2013	Dominican Republic	Non-operational	Direct	100.0	100.0
Jointly controlled:
SCP Trip	04/27/2012	Brazil	Flight magazine	Indirect	60.0	60.0
Associate:
Netpoints	11/08/2013	Brazil	Loyalty program	Indirect	25.4	25.4

 (*) The entity is a start up.

The accounting policies were applied consistently in all the consolidated entities and are consistent with those used in previous years. All the transactions, balances, income and expenses between the consolidated entities are fully eliminated in the consolidated financial statements.

The summary of significant accounting policies adopted by the Company is as follows:

Cash and cash equivalents

Cash and cash equivalents include bank deposits and short-term investments with maturities of three months or less (or with no restriction period for redemption) which have high liquidity and are readily convertible into a known amount of cash and have an insignificant risk of change in value.

Short-term investments

Short-term investments are represented by financial investments with first-tier financial institutions and include exclusive investment funds.

Restricted cash

Restrict cash comprises mainly deposits in guarantee and linked to securities, and short and long term debt.

Trade receivables

Trade receivables are measured based on cost, less allowances for doubtful accounts, which approximate their fair value, due to their short-term nature. An allowance for doubtful accounts is recorded when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivable through risk analysis and taking into account the historical analysis of the recovery of arrears. The allowance for doubtful receivables is the difference between the original book value and amount considered recoverable. Provision is made for all accounts overdue for more than 90 days for installment sales, travel and cargo agencies, and 180 days in respect of airline partners. Additionally, in some cases, the Company performs an individual analysis of overdue balances.

Inventories

Inventories are comprised primarily of maintenance and spare parts and materials, and are stated at the lower of cost and net realizable value. The cost of inventories is determined using the average cost method and includes expenses incurred in their acquisition and transportation to their current location. The provision for inventory obsolescence is recorded when losses are probable.

Financial assets and liabilities

Financial assets

After initial recognition, these are measured in each balance sheet with the pre¬defined classification, based on the purposes for which they were acquired or issued, as described below:

i.

Loans and receivables: with fixed or determinable payments that are not quoted in an active market which are measured at amortized cost after initial recognition under the effective interest method. Interest, inflation adjustment, foreign exchange changes, less impairment losses, when applicable, are recognized in profit or loss under financial income or financial expenses, when earned or incurred. The Company has mainly bank deposits and trade receivables classified under this category.

ii.

Financial assets at fair value through profit or loss: include financial assets held for trading (i.e., acquired primarily for the purpose of sale in the short term) and financial assets designated upon initial recognition at fair value through profit or loss. Interest, inflation adjustment, foreign exchange changes and changes arising from the adjustment to fair value are recognized in profit or loss under financial income or financial expenses, when earned or incurred. The Company has cash equivalents, short-term investments and restricted cash classified under this category.

Financial liabilities

i.

Financial liabilities at fair value through profit or loss: include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss, except those designated as hedge instruments. They are remeasured at fair value at every balance sheet date. Interest, inflation adjustment, foreign exchange changes and changes arising from measurement at fair value, when applicable, are recognized in the profit or loss when incurred. The Company classifies under this category derivatives not designated as hedging instruments.

ii.

Loans and borrowings: financial liabilities that are not regularly traded before maturity. After initial recognition, they are remeasured at amortized cost using the effective interest method. Interest, inflation adjustment and foreign exchange changes, if applicable, are recognized in profit or loss when incurred. The Company recognized under this category current and noncurrent short and long term debt (including finance leases) and trade accounts payable.

Derivatives: Changes on aircraft fuel, interest rate and foreign expose the Company and its subsidiaries to risks that may affect its financial performance. In order to mitigate these risks, the Company uses financial instruments that may or may not be designated as hedge accounting, and, if designated, are classified as cash flow hedges or fair value hedges.

·       Not designated as hedge accounting: the Company may use derivative financial instruments as not designated as hedge accounting when the objectives of the risk Management do not require such classification. The non¬designated operations have movements in fair value directly recognized in financial results.

·       Designated as cash flow hedge: hedge the income or expenses from the fluctuations on exchange rates. The effectiveness is based on statistical correlation methods and the ratio between gains and losses on the financial instruments used as hedge, and the cost and expense fluctuation of the hedged items. The instruments are considered as effective when the fluctuation in the value of derivatives offsets between 80% and 125% the impact of the price fluctuation on the cost or expense of the hedged item. The balance of the actual fluctuations in the fair values of the derivatives are classified in equity (under “Other comprehensive income (loss”) and the ineffective gains or losses are recognized in profit or loss (under “Financial results”), until the revenue recognition or hedged expense under the same item of profit or loss in which the item is recognized.

Derecognition: the Company writes off a financial asset only when the contractual rights to the cash flows from the asset expire, or transfers the asset and substantially all the risks and benefits of ownership to a third party. If the Company does not transfer nor retains substantially all the risks and benefits of ownership of the financial asset, but continues to control the transferred asset, the Company recognizes the participation retained and its liabilities on the values that it will have to pay. If the Company retains substantially all the risks and benefits of ownership of the financial asset transferred, the Company continues recognizing this asset. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss.

Hedge accounting is discontinued prospectively when the Company (i) cancel the hedge operation (ii) the derivative matures or is sold, terminated, or exercised, or (iii) when no longer qualifies as hedge accounting. If the operation is discontinued, any gains or losses previously registered and accumulated in equity in “Other comprehensive income (loss)” until that date are registered on statement of operations as the operation is registered. When the Company expects that the hedge operation will no longer occur, the accumulated and deferred gains or losses in equity are immediately recorded in profit or loss, under the same line that it was initially recorded.

Offsetting of financial instruments: financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

Deposits

Aircraft and engine maintenance deposits: refer to payments made in U.S. dollars by the Company to commercial lease companies to be used in future aircraft and engine maintenance work. The realization of these assets occurs substantially by utilization of the deposits to pay the maintenance services and the receipts of funds, according to the negotiations with the lessors. The exchange rate variations arising from payments, net of uses for maintenance, are recognized as an expense or revenue in the financial results. Management performs regular reviews of the recovery of maintenance deposits based on future maintenance events, and believes that the amounts recorded in the consolidated financial position are recoverable.

Certain lease agreements establish that if a maintenance event does not occur, the deposits are not refundable. Any excess amounts retained by the lessor upon termination of the lease agreement are recognized in profit or loss, under “maintenance, materials and repairs”.

Additionally, the Company maintains agreements with some lessors under which the deposits have been replaced by letters of credit, which can be executed by the lessor if the aircraft maintenance is not performed as scheduled. Many of the aircraft lease agreements do not require maintenance deposits and are guaranteed with letters of credit. As of December 31, 2017, no letter of credit has been executed.

Deposits in guarantee and collaterals for lease agreements: the deposits in guarantee and collaterals are denominated in U.S. dollars, and are adjusted on a monthly basis for foreign exchange fluctuations, they do not bear interest and are reimbursable to the Company upon termination of the agreements.

Leases and sale-leaseback transactions

In accordance with IAS 17 "Leases", leases are classified as finance leases when the lease arrangement transfers substantially all the risks and rewards of ownership to the lessee, or meet the following conditions:

i.          the lease transfers ownership of the asset to the lessee at the end of the lease agreement;

ii.         the lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than fair value at the date the option becomes exercisable such that, at the inception of the lease, is reasonably certain that the option will be exercised;

iii.        the lease term is the most part of the economic asset life, even if the title is not transferred;

iv.        at the beginning of the lease, the present value of minimum lease payments represents substantially all the fair value of the leased asset;

v.         the leased assets are of such a specialized nature such that only the lessee can use them without major modifications.

The difference between the present value and the total amount of falling due installments is charged to profit or loss as financial expenses. The corresponding obligation to the lessor is accounted for as short and long term debt. The aircraft held under finance leases, which have a purchase option at the end of the contract, are depreciated on a straight¬line basis over the useful life at rates calculated to write down the cost to the estimated residual value of 20% based on market price valuations. All other aircraft recorded in property, plant and equipment, when there is no reasonable certainty that the Company will obtain ownership of the property at the end of the contractual term, are depreciated over the shorter of the useful life of the assets and the lease agreement. The other leases are classified as operating leases and are recognized as an expense in profit or loss on a straight¬line basis over the term of the lease agreement.

Lease payments under operating leases are recognized as an expense on a straight-line basis over the lease term in “Aircraft leases”. Future payments are not recognized in the financial statements but are future commitments undertaken are presented on Note 26.

Gains or losses related to sale-leaseback transactions classified as an operating lease after the rights sale are accounted as follows:

·         Immediately recorded in profit or loss when it is clear that the transaction is established at fair value;

·         If the sale price is below fair value, any profit or loss is immediately recognized as other (expense) income, however if the loss is compensated by future lease payments at below or above market price (the gains or losses are deferred and amortized in proportion to the lease payments during the period that the assets will be used);

·         In the event of the sale price being higher than the fair value of the asset, the value exceeding the fair value is deferred and amortized during the period when the asset is expected to be used. The amortization of the gain is recorded as a reduction in lease expenses.

The amount of deferred losses is recorded as other current or noncurrent assets, and the amount of deferred gains is recorded as other liabilities. The breakdown between short and long-term is based on the lease terms.

If the sale-leaseback transactions results in finance lease, any excess proceeds over the carrying amount shall be deferred and amortized over the lease term. The Company did not enter into any sale-leaseback transaction that resulted in a finance lease during the years ended December 31, 2017, 2016 and 2015.

Property, plant and equipment

Property, plant and equipment, including rotable parts, are recorded at acquisition or construction costs, including interest and other financial charges. Each component of property, plant and equipment that has a cost that is significant in relation to the overall cost of the item is depreciated separately. The estimated useful life for property and equipment, for depreciation purposes, is disclosed in Note 14.

The estimated market value at the end of its useful life is a premise for measuring the residual value of the Company’s property, plant and equipment. Except for aircraft with purchase option at the end of the agreements, the other items have no residual value. The residual value and the useful life of assets are reviewed annually and adjusted, if necessary.

The carrying amount of the property, plant and equipment is analyzed in order to verify possible impairment losses when events or changes in circumstances indicate that the book amount is higher than the estimated recoverable amount.

A write-off of a property, plant and equipment item occurs after disposal or when there is no future economic benefits resulting from continued use of the asset. Any gains or losses on property, plant and equipment sales or write-offs are determined by the difference between the values received in the sale and the asset's book value, and are recognized in the statement of operations.

Additionally, the Company adopts the following treatment for the items below:

Advances for aircraft acquisition: refer to prepayments made based on the agreements entered into with Boeing for the purchase of Boeing 737-800 Next Generation and 737- MAX aircraft. The advances are recorded by historical exchange rate at the conversion date.

Lease agreements: assets held through finance leases, when the risks and rewards are transferred to the Company, the asset is registered on the balance sheet. At the beginning of the lease agreement, the Company registers the finance lease as asset and the liability at fair value, or, if lower, the present value of the minimum lease payments.

The leased asset is depreciated over the useful life of the asset. However, when it is uncertain that ownership will be transferred to the Company at the end of the lease agreement, the asset is depreciated over its expected useful life or the contractual lease term period, which ever is shorter.

Other engine and aircraft leases are classified as operating leases and lease expense on a straight-line basis on the statement of operations.

Aircraft and engine redelivery expenses: the Company records a provision for future costs to be incurred upon the aircraft return. Such provision is determined based on the the estimated costs to be incurred upon redelivery and the contractual requirements of operating lease agreements as described in Note 14. After initial recognition, the corresponding asset is depreciated on a straight line basis over the terms of the contract.

Capitalization of major engine, aircraft and APU (Auxiliary Power Unit) maintenance expenses: costs on major maintenance (including replacement and labor parts) are capitalized only when there is an extension of the estimated useful life of the aircraft or the engine. Such costs are capitalized and depreciated until the next major maintenance. Incurred costs that do not extend the useful life of the aircraft, the engine or APU’s, or related to other components of the aircraft are recognized directly in profit or loss.

Intangible assets

Intangible assets are non-monetary assets without physical properties, which carrying amount of intangible assets with indefinite life is tested for impairment annually or when strong evidence of changes in circumstances indicates that the carrying amount may not be recoverable.

Goodwill: goodwill is annually tested for impairment by comparing the carrying amount of the cash-generating units (GLA and Smiles Fidelidade) with its recoverable amount. Management exercises considerable judgment to assess the impact of operating and macroeconomic changes in order to estimate the future cash flows and measure the recoverable amount of that asset.

Airport operating rights: airport operating rights were acquired as part of the acquisition of GLA and of Webjet (formerly named Webjet Linhas Aéreas S.A.), and were recognized at fair value at the acquisition date and are not amortized. Those rights are considered to have an indefinite useful life due to several factors and considerations, including requirements and necessary permits to operate within Brazil and limited slot availability in the most important airports in terms of traffic volume. The carrying value of these rights is evaluated annually as to its recoverable amount or in case of changes in circumstances indicates that carrying values may not be recoverable. No impairment has been recorded until as of the balance sheet date.

Software: The costs related to the acquisition or development of computer software that is separable from an item of related hardware is capitalized separately and amortized over a period on a straight-line basis in accordance with the software agreement.

Income taxes

The income tax and social contribution expenses are represented by the sum of current and deferred income taxes.

Current income taxes: the provision for income tax and social contribution is based on the taxable income. The provisions for income and social contribution taxes are calculated for each company on a stand alone basis using statutory rates in effect at the end of the year.

Deferred income taxes: deferred income taxes are recognized on temporary differences and net operating losses carryforward at the end of the reporting date between the balances of assets and liabilities recorded in the financial statements and their tax basis used in calculation of taxable income.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that is not probable that sufficient taxable income will be incurred to allow all or part of the deferred tax asset to be realized.

Deferred tax related to items recognized directly in equity is also recognized in equity. Deferred tax items are recognized in accordance with the transaction that gave rise to the deferred tax, in other comprehensive income (loss) or directly in equity. Deferred tax assets are recognized only if they are expected to be realized.

Net operating losses carryforward are recorded based on the expected future taxable income for each company, in accordance with legal limitations.

The calculation of the expected future taxable income is based on the business plan, and are annually reviewed and approved by the Company’s Board of Directors.

Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation.

Provision for aircraft return: for aircraft operating leases, the Company is contractually required to return the equipment in a predefined level of operational capability. In these cases, the Company accrues the cost of returning, since these are present obligations arising from past events that will generate future disbursements, whose measurement is made with reasonable assurance. These costs are primarily related to expenses of aircraft reconfiguration (interior and exterior), obtaining licenses and certifications techniques, painting, etc. according to return agreement clauses. The estimated cost is initially recorded at present value and the consideration of the provision for aircraft return is made under "Aircraft reconfigurations/overhauling" of property, plant and equipment (see Note 14). After initial recognition, the asset is depreciated on a straight-line basis and liabilities updated according to the discount rate estimated by the Company with the result shown in financial result. Any changes in the estimated costs to be incurred are recorded prospectively.

Provision for engine return: the provision is estimated based on the minimum contractual conditions that the equipment must have when returned to the lessor, considering the historical costs incurred and the conditions of the equipment at the time of evaluation. These provisions are recorded in profit or loss from the time that the minimum contract requirements are reached and the next maintenance is scheduled for a date later than the date set for the return of the engine. The Company estimated the provision for engine return in accordance with the expenditure that is intended be incurred, and, when the effect of the money value over time is considerate relevant, the provision amount will be the present value of the expenses that are expected to settle the obligation. The agreement maturity will be based on the date that the return of aircraft leased is expected, i.e., or the lease term.

Provision for legal proceedings: Provisions are recorded for all the lawsuits that represent probable loss according to its individual assessment, considering the estimated financial outflow. If the Company expects that some or all of the provision to be reimbursed, the reimbursement is recorded as a separate asset. The expense related to any provision is presented in the statement of operations, net of any reimbursement.

Revenue recognition

The passenger revenue is recognized when air transportation services are actually provided to the passenger. Tickets sold but not yet used are recognized as advance ticket sales and correspond to deferred revenue from tickets sold to be transported in a future date, net of tickets that will expire in accordance with the Company’s expectations (breakage). Breakage consists of the statistical calculation, on a historical basis, of unused, expired tickets, i.e., passengers to be transported that have a high probability of not flying. The Company periodically records adjusted deferred revenues based on tickets which have actually expired.

Revenues from cargo shipment are recognized when transportation is provided. Other revenues include charter services, onboard sales services, tickets exchange rates, and other additional services, and are recognized when the service is provided.

Deferred revenue

The "Smiles Loyalty Program" is designed to retain its customers through the grant of mile credits to its participants. The obligation created by the issuance of miles is measured based on the price that the miles were sold to its airline and non-airline partners, classified by the Company as the fair value of the transaction. The revenue recognition occurs when the miles are redeemed by the Smiles Program participants to exchange the rewards with its partners.

In the consolidated financial statements, the revenue due to exchange of miles from the program and the flight tickets sales is only recognized when the flight transportation is provided.

Share-based payments

Stock options: the fair value of stock options granted to executives is estimated at the grant date using the Black-Scholes pricing model and the expense is recognized in profit or loss during the period that the right is acquired (vesting period), based on estimates which granted shares will be acquired, with a corresponding entry in equity.

Restricted shares: the transfer of restricted shares to its beneficiaries is made at the end of three years from the grant date, provided that the recipient has maintained its employment during that period. This transfer takes place through treasury shares, whose value per share is determined by the market price on the date of transfer to the beneficiary. Gains related to differences in the fair value of the share at the grant date and the value on the date of transfer of restricted shares are recorded in equity in capital reserves under "Goodwill on transfer of shares".

The impact of the review of the amounts of the restricted shares or shares to be acquired in comparison with the original estimates, if any, is recognized in profit or loss, such as the cumulative expense reflects the revised estimate, with a corresponding adjustment in equity.

Segment information

The Company has two reportable segments, as described below:

Flight transportation: the operations are derived from GLA and consist of air transportation services and the major assets that contribute to the generation of revenues are its aircraft. Other revenues primarily arise from cargo, excess baggage charges and cancellation fares, all directly attributable to flight transportation services.

Smiles loyalty program: the operations in this segment are represented by miles sales transactions to airline and non-airline partners. Under this context, the program management, marketing and rights of redemption of prizes and creating and managing the database of individuals and corporations.

Foreign currency transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the time that the transaction occurs. Monetary assets and liabilities denominated in foreign currencies are subsequently calculated based on the conversion using the exchange rate at the balance sheet date and differences resulting from the currency calculated based on conversion are recognized in profit or loss in financial results under “Exchange rate variation, net”.

Main accounting estimates and assumptions adopted

The process of preparing these financial statements often requires that Management adopts assumptions, judgments and estimates that may affect the application of the policies and amounts of assets and liabilities, revenues and expenses. The actual results may differ from the adopted estimates, since such use historical experience and some assumptions that are believed to be appropriate under the circumstances. The reviews of accounting estimates are recognized in the same period in which the assumptions are reviewed and the effects are recognized on a prospective basis.

The estimates and assumptions that have a significant risk of material adjustments on the amounts of assets and liabilities are discussed below:

Impairment of financial assets: the Company estimates any impairment losses at every balance sheet date, or when there are evidences that the carrying amounts may not be recoverable. Problems in repatriation or usage of financial assets in other countries are indicative for impairment tests.

Impairment of non-financial assets: the Company assesses if there are indications of impairment for all non-financial assets at the balance sheet date, or when there is evidence that the carrying amount may not be recoverable. The recoverable values of the cash-generating unit were determined using its value-in-use. The value-in-use is determined based on the assumption of discounted cash flows.

Income taxes: The Company believes that the tax positions taken are reasonable. However, it recognizes that the authorities may question the positions taken which may result in additional liabilities for taxes and interest. The Company recognizes provisions that involve considerable judgment of the management. The provisions are reviewed and adjusted to account for changes in circumstances, such as lapsing of applicable statutes of limitations, conclusions of tax authorities, additional exposures based on identification of new issues or

court decisions affecting a particular tax issue. Actual results can differ from estimates.

Breakage: As part of the process of revenue recognition, flight tickets issued that will not be used and miles issued that will not be redeemed are estimated and recognized as revenue at the moment of the sale and issuance, respectively. These estimates, referred to as breakage, are reviewed annually and are based on historical data of expired flight tickets and expired miles.

Allowance for doubtful accounts: the allowance for doubtful accounts is recorded in the amount considered sufficient by the management in order to cover possible losses on trade receivables arising from receivables, considering the risks involved. The Company periodically evaluates its receivables and, based on historical data, combined with risk analysis per customer, registers the allowance for losses.

Provision for legal proceedings: provisions are recorded for all lawsuits that represent probable losses, according to the loss probability, which includes the assessment of available evidence, including the legal consultants’ opinion, internal and external, the proceedings nature and past experiences. Additionally, the provisions are periodically reviewed and the management believes that the provisions recorded are sufficient, based on the probability of loss. However, significant changes in judicial decisions can have significant impacts on the Company’s financial statements.

Provision for aircraft return: the Company estimates the provision for aircraft returns considering the costs in accordance with returns conditions agreements as set out in the return conditions in the lease agreements.

Provision for engine return: the Company records the provision for engine return based on an estimate of the agreement obligation of each engine return and recorded in the statement of operations only in the period between the last maintenance and the date of return of the components.

Fair value measurement of financial instruments: when the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model. The inputs to these models are based on observable markets, when possible; however, when this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments.

New standards, amendments and interpretations

a)       Standards issued but not yet effective:

IFRS 9 – Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9 – “Financial Instruments”, that replaces IAS 39 – “Financial Instruments: Recognition and Measurement” and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing fully comparative information is not compulsory. The adoption of IFRS 9 will not affect the classification and measurement of the Company’s financial assets. One of the main impacts is the measurement of the allowance for doubtful accounts, which will be calculated based on expected credit losses instead of estimated losses. The Company expects a reduction of approximately 30% in estimated losses. Related to the effects on derivatives, the Company expects that the main changes from adoption of IFRS 9 will be related to the documentation of hedging strategy policies.

IFRS 15 – Revenue from Contracts with Customers

IFRS15 - Revenue from Contracts with Customers was issued in May 2014 and amended in April 2016, and is effective for fiscal years beginning on or after January 1, 2018. IFRS15 presents revenue recognition principles based on a five-step model to be applied to all contracts with customers, in accordance with the entity’s performance requirements. The Company will adopt the new standard on the date it becomes effective, as of January 1, 2018, using the full retrospective method. In 2017, the Company carried out an assessment of IFRS 15, which is subject to changes due to more detailed analyses that are still in progress. Among the main challenges for the adoption of IFRS 15, the Company believes that the recognition of the following revenues may change compared with the current accounting:

a) Passenger revenue arising from codeshare agreements: corresponds to agreements where two or more airlines get into an agreement to provide air transportation services. In transactions when the Company will act as principal, revenue will be recognized based on the gross value of the transaction (price of the ticket to the final customer), and in transactions when the Company will act as agent, revenue will be recognized based on the net value of the transaction (sale price less the amount payable to the other airline). The Company did not identify any impact of the change to this standard on revenue arising from codeshare agreements.

b) Ancillary revenue: comprises all revenue related to air transportation services, such as excess baggage, cancelation fees and refunds, as cancellations, no-show, among others. These revenues were assessed and will be classified as “related to the main service”, and will be recognized only when the air transportation service is incurred. In this regard, the Company concluded its assessment and estimated impacts of approximately R$14 million as a result of changes to the timing of recognition of revenues and approximately R$500 million from the reclassification of revenues from “Other revenue” to “Passenger revenue”.

c) Breakage revenue: comprises the expectation of mileage and tickets that are not likely to be used by the customer. To recognize these revenues, the Company uses analysis tools and statistical data that allow the estimate to be calculated with a reasonable level of certainty. Given the standard’s specific requirements regarding this, the Company concluded that its methodologies are in compliance with IFRS 15.

d) Mileage program: Presentation as agent: the main impact refers to the presentation of gross revenue with redemption of premiums net of their respective costs. Mileage valuation: there are no impacts resulting from the mileage valuation, since they are priced based on the sales value, considering that the Smiles Mileage Program operates independently. As a consequence, there is no change in the valuation of the tickets that are originated from the redemption of the mileage program.

IFRS 16 – Leases

IFRS 16 was issued in January 2016, and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Lease-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets the principles for recognition, measurement, presentation and disclosure of leases and require lessess to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. IFRS 16 is effective for annual periods beginning on or after January 1, 2019. IFRS 16 requires that, for the majority of leases, the lessor records an asset related to the right of use of the leased item, and a liability related to the lease. The Company has 88 aircraft leased as operational leases of the total of 119 aircraft, and the adoption of this standard will have a material impact on the Company, with the potential increase in the assets corresponding to the right of use of the leased item and liabilities related to the leases, which will be recorded in the statements of financial position as from the adoption date.

IFRIC 22 – Foreign Currency Transactions and Advance Consideration

IFRIC 22 clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a nonmonetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or nonmonetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration. IFRIC 22 is effective for annual periods beginning on or after January 1, 2018, and intended to eliminate diversity in practice, when recognising the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or nonmonetary liability relating to advance consideration received or paid in a foreign currency. The Company does not expect this interpretation to have significant impacts, as transactions with these characteristics already comply with this interpretation.

IFRIC 23 – Uncertainty over Income Tax Treatment

IFRIC 23 addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 and does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. IFRIC 23 is effective for annual periods beginning on or after January 1, 2019, and the Company does not expect significant impacts from the adoption of this interpretation.

IFRS 2 – Classification and Measurement of Share-based Payment Transactions – Amendments to IFRS 2

The IASB iassued amendments to IFRS 2 – Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of an share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permited if elected for all three amendments and the other criteria are met. The amendments are effective for annual periods beginning on January 1, 2018, and early application is permitted. The Company does not expect significant impacts from the adoption of these amendments on its consolidated financial statements.

b) Annual improvements – Applicable to annual periods beginning on or after January 1, 2017:

Amendments to IFRS 12 – Disclosure of Interests in other Entities: Clarification of the scope of disclosure requirements in IFRS 12

The amendments clarify that the disclosure requirements in IFRS 12 apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. These amendments did not affect the Company’s consolidated financial statements.

Amendments to IAS 12 – Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify on the recognition requirements of deferred tax assets for unrealized losses and the method to assess the existence of probable future taxable income against which the deductible temporary differences can be utilized. These amendments did not affect the Company’s consolidated financial statements.

Amendments to IAS 7 – Statement of Cash Flows: Disclosure Initiative

The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for both the current and the comparative periods in Note 28.

There are no other standards and interpretations issued but not yet adopted that, in Management's opinion, have a significant impact on the Company’s results or equity.

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2. Approval and summary of significant accounting policies applied in preparing the financial statements (Tables)

12 Months Ended

Dec. 31, 2017

Approval And Summary Of Significant Accounting Policies Applied In Preparing Financial Statements

Schedule of direct and indirect subsidiaries, jointly controlled and associate

Entity	Date of constitution	Location	Operational activity	Type of control	% equity interest
					12/31/2017	12/31/2016
Extensions:
GAC	03/23/2006	Cayman Islands	Aircraft acquisition	Direct	100.0	100.0
Gol Finance Inc.	03/16/2006	Cayman Islands	Financial funding	Direct	100.0	100.0
Gol Finance	06/21/2013	Luxembourg	Financial funding	Direct	100.0	100.0
Subsidiaries:
GLA	04/09/2007	Brazil	Flight transportation	Direct	100.0	100.0
Smiles Fidelidade	08/01/2011	Brazil	Loyalty program	Direct	52.7	53.8
Smiles Viagens (*)	08/10/2017	Brazil	Travel agency	Indirect	100.0	-
Gol Dominicana	02/28/2013	Dominican Republic	Non-operational	Direct	100.0	100.0
Jointly controlled:
SCP Trip	04/27/2012	Brazil	Flight magazine	Indirect	60.0	60.0
Associate:
Netpoints	11/08/2013	Brazil	Loyalty program	Indirect	25.4	25.4

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3. Cash and cash equivalents (Tables)

12 Months Ended

Dec. 31, 2017

Cash and cash equivalents [abstract]

Schedule of cash and cash equivalents

	12/31/2017	12/31/2016
Cash and bank deposits	427,608	246,528
Cash equivalents	599,254	315,679
Total	1,026,862	562,207

Schedule of breakdown of cash equivalents

	12/31/2017	12/31/2016
Private bonds	164,959	45,882
Government bonds	14,039	-
Investment funds	420,256	269,797
Total	599,254	315,679

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4. Short-term investments (Tables)

12 Months Ended

Dec. 31, 2017

Short-term Investments

Schedule of short-term investments

	12/31/2017	12/31/2016
Private bonds	731,061	77,080
Government bonds	32,701	41,104
Investment funds	191,827	313,049
Total	955,589	431,233

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5. Restricted cash (Tables)

12 Months Ended

Dec. 31, 2017

Restricted Cash Tables

Schedule of restricted cash

	12/31/2017	12/31/2016
Deposits in guarantee of letter of credit	60,423	15,721
Escrow deposits (a)	71,110	67,345
Escrow deposits - Leases (b)	116,131	78,015
Other deposits (c)	20,383	7,688
Total	268,047	168,769

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6. Trade receivables (Tables)

12 Months Ended

Dec. 31, 2017

Trade Receivables

Schedule of trade receivables

	12/31/2017			12/31/2016
Local currency
Credit card administrators		454,975			345,798
Travel agencies		307,149			228,089
Cargo agencies		39,225			41,926
Airline partner companies		3,780			4,153
Other		43,871			66,774
Total local currency		849,000			686,740
Foreign currency
Credit card administrators		67,479			49,104
Travel agencies		9,829			16,323
Cargo agencies		823			2,215
Airline partner companies		47,662			31,200
Other		366			8,837
Total foreign currency		126,159			107,679
Total		975,159			794,419
Allowance for doubtful accounts		(38,681	)		(34,182	)
Total trade receivables		936,478			760,237

Schedule of aging list of trade receivables

	12/31/2017		12/31/2016
Not yet due
Until 30 days		594,968		348,168
31 to 60 days		133,438		151,186
61 to 90 days		44,642		66,925
91 to 180 days		71,116		86,652
181 to 360 days		26,541		11,147
Above 360 days		241		239
Total not yet due		870,946		664,317
Overdue
Until 30 days		21,686		19,117
31 to 60 days		8,338		5,623
61 to 90 days		3,559		10,915
91 to 180 days		15,620		22,648
181 to 360 days		8,059		20,609
Above 360 days		8,270		17,008
Total overdue		65,532		95,920
Total		936,478		760,237

Schedule of changes in the allowance for doubtful accounts

	12/31/2017			12/31/2016
Balance at the beginning of the year		(34,182	)		(50,389	)
Additions		(24,913	)		(9,806	)
Unrecoverable amounts		17,649			16,250
Recoveries		2,765			9,763
Balance at the end of the year		(38,681	)		(34,182	)

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7. Inventories (Tables)

12 Months Ended

Dec. 31, 2017

Inventories Tables

Schedule of inventories

	12/31/2017	12/31/2016
Consumables	28,006	27,281
Parts and maintenance materials	162,409	160,884
Other	585	6,867
Provision for obsolescence	(12,509)	(12,444)
Total	178,491	182,588

Schedule of changes in the provision for obsolescenc

	12/31/2017	12/31/2016
Balances at the beginning of the year	(12,444)	(12,444)
Additions	(3,059)	-
Write-off	2,994	-
Balances at the end of the year	(12,509)	(12,444)

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8. Deferred and recoverable taxes (Tables)

12 Months Ended

Dec. 31, 2017

Deferred And Recoverable Taxes Tables

Schedule of recoverable taxes

	12/31/2017	12/31/2016
Prepaid and recoverable income taxes	66,786	51,215
Withholding income tax (IRRF) (a)	7,308	9,601
PIS and COFINS (b)	408	16,908
Withholding tax of public institutions	6,127	8,130
Value added tax – IVA (c)	5,431	12,044
Other	4,195	1,449
Total	90,255	99,347
Current assets	83,210	27,287
Noncurrent assets	7,045	72,060

Schedule of deferred tax assets (liabilities) - noncurrent

	12/31/2017	12/31/2016
Net operating losses carryforward
Income tax losses	129,316	9,149
Negative basis of social contribution	46,555	3,294
Temporary differences:
Mileage program	-	9
Allowance for doubtful accounts and other credits	63,585	13,823
Provision for losses on GLA’s acquisition	143,350	143,350
Provision for legal proceedings and tax liabilities	83,263	17,487
Aircraft return	68,438	32,515
Derivative transactions	9,603	1,635
Tax benefit due to goodwill incorporation (*)	14,588	29,177
Flight rights	(353,226)	(353,226)
Depreciation of engines and parts for aircraft maintenance	(167,913)	(148,581)
Reversal of goodwill amortization on GLA’s acquisition	(127,659)	(127,659)
Aircraft leases	34,660	30,589
Other	143,949	117,577
Total deferred taxes, net	88,509	(230,861)
Deferred tax assets – noncurrent	276,514	107,159
Deferred tax liabilities – noncurrent	(188,005)	(338,020)

Schedule of net operating losses carryforward

	GLAI		GLA		Smiles
	12/31/2017	12/31/2016	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Income tax losses	172,547	190,125	4,134,099	3,971,845	758,289	867,403
Negative basis of social contribution	172,547	190,125	4,134,099	3,971,845	758,289	867,403

Schedule of reconciliation of income taxes expense

	12/31/2017	12/31/2016	12/31/2015
Income (loss) before income taxes	70,996	1,361,422	(3,447,100)
Income tax and social contribution tax rate	34%	34%	34%
Income at the statutory combined tax rate	(24,139)	(462,883)	1,172,014
Adjustments to calculate the effective tax rate:
Equity results	185	(435)	(1,340)
Tax income (losses) from wholly-owned subsidiaries	(106,533)	56,239	(83,702)
Income tax on permanent differences and other	(14,012)	3,803	1,920
Nontaxable revenues (nondeductible expenses), net	(51,572)	(41,913)	(111,828)
Exchange variation on foreign investments	(20,225)	242,190	(502,938)
Interest attributable to shareholders’ equity	4,817	3,543	4,673
Benefit on tax losses and temporary differences constituted (not constituted)	291,002	(59,602)	(1,322,939)
Use of tax losses in tax installment payment programs(*)	227,690	-	-
Total income taxes	307,213	(259,058)	(844,140)
Income taxes
Current	(239,846)	(257,944)	(196,140)
Deferred	547,059	(1,114)	(648,800)
Total income taxes	307,213	(259,058)	(844,140)

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9. Deposits (Tables)

12 Months Ended

Dec. 31, 2017

Deposits Tables

Schedule of deposits

	12/31/2017	12/31/2016
Judicial deposits (a)	508,515	432,182
Maintenance deposits (b)	484,565	584,149
Deposits in guarantee for lease agreements (c)	170,679	172,661
Total	1,163,759	1,188,992

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10. Transactions with related parties (Tables)

12 Months Ended

Dec. 31, 2017

Transactions With Related Parties Tables

Schedule of remuneration of key management personnel

	12/31/2017	12/31/2016	12/31/2015
Salaries and benefits (*)	57,838	38,134	28,700
Related taxes and charges	6,019	4,690	5,352
Share-based payments	11,219	11,226	10,469
Total	75,076	54,050	44,521

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11. Share-based payments (Tables)

12 Months Ended

Dec. 31, 2017

Stock Option Plan [Member]

Disclosure of terms and conditions of share-based payment arrangement [line items]

Schedule of stock options plan

Year of grant	Date of the Board Meeting	Total options granted	Number of options outstanding as of 12/31/2017	Exercise price of the option (in Reais)	Fair value  of the option at grant date (in Reais)	Estimated volatility of share price	Expected dividend yield	Risk-free return rate	Average remaining maturity (in years)
2009 (a)	02/04/2009	1,142,473	149,000	10.52	8.53	76.91%	-	12.66%	1.0
2010 (b)	02/02/2010	2,774,640	796,872	20.65	16.81	77.95%	2.73%	8.65%	2.0
2011	12/20/2010	2,722,444	538,915	27.83	16.07 (c)	44.55%	0.47%	10.25%	2.9
2012	10/19/2012	778,912	392,895	12.81	5.32 (d)	52.25%	2.26%	9.00%	4.7
2013	05/13/2013	802,296	437,315	12.76	6.54 (e)	46.91%	2.00%	7.50%	5.3
2014	08/12/2014	653,130	392,042	11.31	7.98 (f)	52.66%	3.27%	11.00%	6.6
2015	08/11/2015	1,930,844	1,323,567	9.35	3.37 (g)	55.57%	5.06%	13.25%	7.6
2016	09/30/2016	5,742,732	4,237,873	2.62	1.24 (h)	98.20%	6.59%	14.25%	8.7
2017	08/08/2017	947,767	771,814	8.44	7.91 (i)	80.62%	1.17%	11.25%	9.6
Total		17,495,238	9,040,293	8.63					7.1

Schedule of movement in the stock options outstanding

	Number of stock options	Weighted average exercise price
Options outstanding as of December 31, 2016	8,992,055	9.14
Options granted	947,767	8.44
Options cancelled and adjustments in estimated prescribed rights	(422,763)	22.37
Options exercised	(476,766)	5.65
Options outstanding as of December 31, 2017	9,040,293	8.63
Number of options exercisable as of:
December 31, 2016	6,214,124	13.66
December 31, 2017	7,307,151	9.59

Stock Option Plan [Member] | Smiles S.A. ("Smiles") [Member]

Disclosure of terms and conditions of share-based payment arrangement [line items]

Schedule of stock options plan

Year of  grant	Date of Board Meeting	Total options  granted	Number of options outstanding as of 12/31/2017	Exercise price of the option (in Reais)	Average fair value at grant date	Estimated volatility of share price	Expected dividend yield	Risk-free return rate	Average remaining maturity (in years)
2013	08/08/2013	1,058,043	54,003	21.70	4.25 (a)	36.35%	6.96%	7.40%	5.5
2014	02/04/2014	1,150,000	199,050	31.28	4.90 (b)	33.25%	10.67%	9.90%	6.0
Total		2,208,043	253,053

Schedule of movement in the stock options outstanding

	Number of stock options	Weighted average exercise price
Options outstanding as of December 31, 2016	483,053	30.21
Options exercised	(230,000)	16.45
Options outstanding as of December 31, 2017	253,053	29.24

Restricted Shares Plan [Member]

Disclosure of terms and conditions of share-based payment arrangement [line items]

Schedule of stock options plan

Year of grant	Date of Board Meeting	Total shares granted	Total vested shares	Average fair value at grant date
2014	08/13/2014	804,073	-	11.31
2015	04/30/2015	1,207,037	875,923	9.35
2016	09/30/2016	4,007,081	3,137,373	2.62
2017	08/08/2017	1,538,213	1,283,895	8.44
Total		7,556,404	5,297,191

Schedule of movement in the stock options outstanding

	Total restricted shares
Restricted shares outstanding as of December 31, 2016	4,609,256
Restricted shares granted	1,538,213
Restricted shares cancelled and adjustments in estimated expired rights	(235,097)
Restricted shares transferred (*)	(615,181)
Restricted shares outstanding as of December 31, 2017	5,297,191

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12. Investments (Tables)

12 Months Ended

Dec. 31, 2017

Investments Tables

Schedule of investees and the changes in the investments balance

The financial information of the Company’s investees and the changes in the investments balance for the years ended December 31, 2017 and 2016 are as follows:

	Trip		Netpoints (b)
	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Relevant information of the Company’s investees:
Total number of shares	-	-	130,492,408	130,492,408
Capital stock	1,318	2,083	75,351	75,351
Interest	60.00%	60.0%	25.4%	25.4%
Total equity (deficit)	2,225	3,395	(22,997)	(14,991)
Goodwill on investment acquisition	-	-	-	15,184
Adjusted equity (a)	1,333	2,038	-	-
Net income (loss) for the year	907	2,081	(9,344)	(29,050)
Adjusted net income (loss) for the year attributable to the Company’s interest (a)	544	1,250	-	(2,530)

Changes on investments	Trip	Netpoints	Total
Balances as of December 31, 2015	2,781	15,643	18,424
Equity results	1,250	(2,530)	(1,280)
Capital increase	-	3,439	3,439
Loss on capital increase (b)	-	(1,368)	(1,368)
Dividends	(1,993)	-	(1,993)
Balances as of December 31, 2016	2,038	15,184	17,222
Equity results	544	-	544
Write-off of Netpoints goodwill	-	(15,184)	(15,184)
Dividends	(1,249)	-	(1,249)
Balance as of December 31, 2017	1,333	-	1,333

(a) Reflects the Company’s interest on the total equity and net income (loss) of the respective investee.

(b) In September 2016, the Board of Directors of Smiles approved the subscription of the capital increase of its associated Netpoints through the issuance of 20,230,201 new shares. Accordingly, the interest in Netpoints from Smiles increased from 21.3% to 25.4%.

Schedule of disposal of equity interest

	12/31/2017
Shares sold	1,250,000
Value per share	61.05
Sale value	76,313
Investment value	(4,863)
Income taxes on gain on capital decrease (*)	(8,150)
Gain from capital decrease in  investment in subsidiary	63,300

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13. Earnings (loss) per share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Loss Per Share Tables

Schedule of earning per share

	Parent Company and Consolidated
	12/31/2017			12/31/2016			12/31/2015
	Common	Preferred	Total	Common	Preferred	Total	Common	Preferred	Total
Numerator
Net income (loss) for the year attributable to equity holders of the parent	7,869	11,315	19,184	353,129	496,490	849,619	(2,123,945)	(2,336,938)	(4,460,883)
	7,869	11,315	19,184	353,129	496,490	849,619	(2,123,945)	(2,336,938)	(4,460,883)
Denominator
Weighted average number of outstanding shares (in thousands) (*)	4,981,350	204,664		5,035,037	202,261		5,035,037	158,285
Effects of dilution from stock options	-	2,614		-	347		-	-
Adjusted weighted average number  of outstanding shares and diluted presumed  conversions (in thousands) (*)	4,981,350	207,278		5,035,037	202, 608		5,035,037	158,285
Basic earnings (loss) per share	0.002	0.055		0.070	2.455		(0.422)	(14.764)
Diluted earnings (loss) per share	0.002	0.055		0.070	2.450		(0.422)	(14.764)

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14. Property, plant and equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property Plant And Equipment Tables

Schedule of composition of property, plant and equipment

	12/31/2017				12/31/2016
	Average annual depreciation rate	Cost	Accumulated depreciation	Net amount	Net amount
Flight equipment
Aircraft held under finance leases	5.9%	2,000,866	(649,430)	1,351,436	1,411,932
Sets of replacement parts and spare engines	7.2%	1,345,161	(494,684)	850,477	804,974
Aircraft reconfigurations/overhauling	26.8%	1,807,133	(941,372)	865,761	615,812
Aircraft and safety equipment	20.0%	843	(438)	405	467
Tools	10.0%	36,199	(18,124)	18,075	14,617
		5,190,202	(2,104,048)	3,086,154	2,847,802
Impairment losses (*)	-	(26,076)	-	(26,076)	(30,726)
Total flight equipment		5,164,126	(2,104,048)	3,060,078	2,817,076
Property, plant and equipment in use
Vehicles	20.0%	10,548	(9,100)	1,448	1,660
Machinery and equipment	10.0%	57,834	(37,792)	20,042	22,343
Furniture and fixtures	10.0%	28,148	(16,639)	11,509	10,061
Computers and peripherals	20.0%	39,458	(30,464)	8,994	7,401
Communication equipment	10.0%	2,617	(1,914)	703	823
Facilities	10.0%	1,534	(1,222)	312	332
Maintenance center - Confins	10.0%	107,127	(80,209)	26,918	38,096
Leasehold improvements	18.5%	33,111	(19,571)	13,540	8,248
Construction in progress	-	33,503	-	33,503	31,571
Total property, plant and equipment in use		313,880	(196,911)	116,969	120,535
		5,478,006	(2,300,959)	3,177,047	2,937,611
Advances for property, plant and equipment acquisition	-	18,720	-	18,720	87,399
Total property, plant and equipment		5,496,726	(2,300,959)	3,195,767	3,025,010

Schedule of changes in property, plant and equipment

	Property, plant and equipment under finance lease	Other flight equipment	Advances for property, plant and equipment acquisition	Other	Total
Balances as of December 31, 2015	2,081,973	1,419,596	623,843	131,202	4,256,614
Additions	-	425,218	71,503	27,400	524,121
Disposals	(597,136)	(122,487)	(607,947)	(9,911)	(1,337,481)
Depreciation	(72,905)	(317,183)	-	(28,156)	(418,244)
Balances as of December 31, 2016	1,411,932	1,405,144	87,399	120,535	3,025,010
Additions	-	827,658	263,328	30,511	1,121,497
Disposals	(5,639)	(135,381)	(332,007)	(10,506)	(483,533)
Depreciation	(54,857)	(388,779)	-	(23,571)	(467,207)
Balances as of December 31, 2017	1,351,436	1,708,642	18,720	116,969	3,195,767

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15. Intangible assets (Tables)

12 Months Ended

Dec. 31, 2017

Intangible Assets Tables

Schedule of intangible assets

	Goodwill	Airport operating rights	Software	Total
Balances as of December 31, 2015	542,302	1,038,900	133,403	1,714,605
Additions	-	-	55,316	55,316
Disposals	-	-	(781)	(781)
Amortization	-	-	(29,424)	(29,424)
Balances as of December 31, 2016	542,302	1,038,900	158,514	1,739,716
Additions	-	-	55,449	55,449
Disposals	-	-	(9,662)	(9,662)
Amortization	-	-	(38,218)	(38,218)
Balances as of December 31, 2017	542,302	1,038,900	166,083	1,747,285

Schedule of allocation of goodwill

	Goodwill GLA	Goodwill Smiles	Airport operating rights
December 31, 2017
Book value	325,381	216,921	1,038,900
Book value - CGU	1,061,177	395,105	1,038,900
Value in use	15,206,092	5,464,287	5,069,156
Pre tax discount rate	15.46%	19.26%	14.50%
Perpetuity growth rate	3.50%	3.50%	3.50%
December 31, 2016
Book value	325,381	216,921	1,038,900
Book value - CGU	2,433,861	56,880	1,038,900
Value in use	3,636,201	9,476,173	4,816,306
Pre tax discount rate	23.92%	14.51%	27.34%
Perpetuity growth rate	3.50%	3.50%	8.50%

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16. Short and long-term debt (Tables)

12 Months Ended

Dec. 31, 2017

Short And Long-term Debt Tables

Schedule of short and long-term debt

	Maturity of the contract	Interest rate	12/31/2017	12/31/2016
Short-term debt
Local currency
Safra (a)	May 2018	128% of DI	-	9,690
Debentures VI (g)	Sep. 2019	132% of DI	395,093	-
Interest accrued	-	-	23,921	45,026
Foreign currency (US$)
J.P. Morgan (b)	Aug. 2019	1.32% p.a.	43,909	42,275
Finimp (c)	Dec. 2018	5.75% p.a.	240,973	174,428
Engine Facility (Cacib) (d)	Jun. 2021	Libor 3m+2.25% p.a.	17,145	16,889
ExIm (Cacib)  (e)	Apr. 2019	Libor 3m+0.75% p.a.	47,507	-
Senior Notes I (f)	Apr. 2017	7.60% p.a.	-	182,418
Senior Notes V (k)	Dec. 2018	9.71% p.a.	23,258	-
PK Finance (q)	Aug. 2026	5.70% p.a.	7,883	-
Interest accrued	-	-	74,989	97,670
			874,678	568,396
Finance leases	Jun. 2025	4.04% p.a.	288,194	266,894
Total short-term debt			1,162,872	835,290
Long-term debt
Local currency
Safra (a)	May. 2018	128% of DI	-	4,871
Debentures VI (g)	Sep. 2019	132% of DI	617,333	1,005,242
Foreign currency (US$)
J.P. Morgan (b)	Aug. 2019	Libor 3m+0.75% p.a.	12,451	11,142
Engine Facility (Cacib) (d)	Jun. 2021	Libor 3m+2.25% p.a.	142,137	156,917
ExIm (Cacib)  (e)	Apr. 2019	Libor 3m+0.75% p.a.	35,634	-
PK Finance (p)	Aug. 2026	5.70% p.a.	78,239	-
Senior Notes II (h)	Jul. 2020	9.64% p.a.	314,589	368,000
Senior Notes III (i)	Feb. 2023	11.30% p.a.	69,074	68,053
Senior Notes IV (j)	Jan. 2022	9.24% p.a.	299,524	889,595
Senior Notes V (k)	Dec. 2018	9.71% p.a.	-	43,010
Senior Notes VI (l)	Jul. 2021	9.87% p.a.	127,181	120,631
Senior Notes VII (m)	Dec. 2028	9.84% p.a.	54,752	52,721
Senior Notes VIII (n)	Jan. 2025	7.19% p.a.	1,597,713	-
Perpetual Notes (o)	-	8.75% p.a.	438,201	428,436
Term Loan (p)	Aug. 2020	6.70% p.a.	968,010	944,194
			4,754,838	4,092,812
Finance leases	Jun. 2025	4.04% p.a.	1,187,957	1,451,118
Total long-term debt			5,942,795	5,543,930
Total			7,105,667	6,379,220

Schedule of maturities of long-term debt

	2019	2020	2021	2022	2022 onwards	Without maturity date	Total
Local currency
Debentures VI	617,333	-	-	-	-	-	617,333
Foreign currency (US$)
J.P. Morgan	12,451	-	-	-	-	-	12,451
Engine Facility (Cacib)	17,177	17,177	107,783	-	-	-	142,137
ExIm (Cacib)	35,634	-	-	-	-	-	35,634
PK Finance	8,352	8,838	9,375	9,933	41,741	-	78,239
Senior Notes II	-	314,589	-	-	-	-	314,589
Senior Notes III	-	-	-	-	69,074	-	69,074
Senior Notes IV	-	-	-	299,524	-	-	299,524
Senior Notes VI	-	-	127,181	-	-	-	127,181
Senior Notes VII	-	-	-	-	54,752	-	54,752
Senior Notes VIII	-	-	-	-	1,597,713	-	1,597,713
Perpetual Notes	-	-	-	-	-	438,201	438,201
Term Loan	-	968,010	-	-	-	-	968,010
Total	690,947	1,308,614	244,339	309,457	1,763,280	438,201	4,754,838

Schedule of fair value of senior and perpetual Notes

	Book value (c)	Market value
Senior Notes and Perpetual Notes (a)	2,974,501	2,955,391
Debentures (b)	1,036,348	1,072,232
Term Loan (b)	989,572	1,013,929
Other	629,095	724,788
Total	5,629,516	5,766,340

Schedule of funding operations

Renegotiation and issuance	Bank	Principal amount		Interest	Maturity
date		(US$)	(R$)	rate (p.a.)	date
01/13/2017	Banco do Brasil	5,245	16,803	6.13%	01/05/2018
02/01/2017	Banco do Brasil	8,595	27,057	6.15%	01/28/2018
02/10/2017	Banco do Brasil	4,815	15,001	6.14%	02/05/2018
04/20/2017	Banco do Brasil	4,274	13,442	6.20%	04/16/2018
05/31/2017	Banco Safra	5,407	17,540	4.85%	05/29/2018
06/26/2017	Banco do Brasil	9,638	31,929	5.95%	06/21/2018
06/26/2017	Banco Safra	4,571	15,142	5.17%	06/21/2018
06/30/2017	Banco do Brasil	10,436	34,526	5.85%	06/28/2018
06/30/2017	Banco do Brasil	7,823	25,879	5.85%	06/28/2018
10/30/2017	Banco do Brasil	2,693	8,768	5.53%	01/12/2018
12/04/2017	Banco Safra	9,347	30,383	5.11%	11/29/2018

Schedule of senior Notes and Perpetual Notes Exchange Offer

	Type	Transaction date	Previous balance	Payments	New issues	Closing balance	Premium paid (*)
Senior Notes II	Tender offer	12/29/2017	116,968	(21,191)	-	95,777	(422)
Senior Notes IV	Tender offer	12/11/2017	276,730	(185,197)	-	91,533	(12,071)
Senior Notes V	Prepayment	12/19/2017	14,685	(7,379)	-	7,306	-
Senior Notes VIII	Issuance	12/11/2017	-	-	482,717	482,717	-
Total in U.S. dollars			408,383	(213,767)	482,717	677,333	(12,493)
Total in Brazilian Reais			1,331,982	(707,141)	1,596,828	2,221,669	(41,327)

Schedule of future payments of finance agreements

	12/31/2017	12/31/2016
2017	-	350,883
2018	333,795	328,931
2019	319,511	307,027
2020	267,477	267,885
2021	224,591	227,204
2022	119,200	115,367
Thereafter	326,823	292,362
Total minimum lease payments	1,591,397	1,889,659
Less total interest	(115,246)	(171,647)
Present value of minimum lease payments	1,476,151	1,718,012
Less current portion	(288,194)	(266,894)
Noncurrent portion	1,187,957	1,451,118

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18. Taxes payable (Tables)

12 Months Ended

Dec. 31, 2017

Taxes Payable Tables

Schedule of taxes payable

	12/31/2017	12/31/2016
PIS and COFINS	40,036	89,332
ICMS installments	-	4,852
Tax regularization program in installment payments - PRT and PERT	68,596	-
Withholding income tax on salaries	32,070	29,519
ICMS	45,492	43,226
Tax on import	3,454	3,454
IRPJ and CSLL payable	5,299	12,489
Other	6,200	6,105
Total	201,147	188,977
Current	134,951	146,174
Noncurrent	66,196	42,803

Breakdown of the obligation included in the installment payment programs

	2017
IPI on customs import	92,153
PIS and COFINS	98,491
PIS and COFINS on financial income (b)	131,844
Income and social contribution taxes	23,372
Other	4,655
Total debt	350,515
Reductions in interest and fines (c)	(21,249)
Use of tax losses carryforward (a)	(227,689)
Amount payable in installments	101,577

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21. Provisions (Tables)

12 Months Ended

Dec. 31, 2017

Provisions Tables

Schedule of provisions

	Insurance provision	Provision for aircraft and engine return (a)	Provision for legal proceedings (b)	Total
Balances as of December 31, 2015	742	725,176	144,355	870,273
Additional provisions recognized	4,237	97,423	189,244	290,904
Utilized provisions	(4,237)	(121,855)	(127,551)	(253,643)
Foreign exchange rate variation, net	-	(116,803)	(516)	(117,319)
Balances as of December 31, 2016	742	583,941	205,532	790,215
Additional provisions recognized (a)	(1)	38,819	158,263	197,081
Utilized provisions (b)	-	(220,082)	(155,999)	(376,081)
Foreign exchange rate variation, net	-	(1,827)	(199)	(2,026)
Balances as of December 31, 2017	741	400,851	207,597	609,189
As of December 31, 2016
Current	742	65,760	-	66,502
Noncurrent	-	518,181	205,532	723,713
Total	742	583,941	205,532	790,215
As of December 31, 2017
Current	741	45,820	-	46,561
Noncurrent	-	355,031	207,597	562,628
Total	741	400,851	207,597	609,189

Schedule of provisions related to civil and labor suits

	12/31/2017	12/31/2016
Civil	67,528	73,356
Labor	137,071	132,163
Taxes	2,998	13
Total	207,597	205,532

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22. Equity (Tables)

12 Months Ended

Dec. 31, 2017

Equity Tables

Schedule of capital stock

	12/31/2017			12/31/2016
	Common	Preferred	Total	Common	Preferred	Total
Fundo Volluto	100.00%	49.25%	61.19%	100.00%	33.88%	61.28%
Delta Air Lines, Inc.	-	12.38%	9.47%	-	16.19%	9.48%
Airfrance - KLM	-	1.60%	1.22%	-	2.09%	1.22%
Treasury shares	-	0.10%	0.08%	-	0.44%	0.26%
Other	-	0.93%	0.71%	-	1.11%	0.65%
Free float	-	35.74%	27.33%	-	46.29%	27.11%
Total	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%

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23. Revenue (Tables)

12 Months Ended

Dec. 31, 2017

Revenue Tables

Schedule of detail of revenues

	12/31/2017	12/31/2016	12/31/2015
Passenger transportation	9,479,242	8,948,170	8,954,034
Cargo	354,561	324,492	318,573
Mileage revenue	800,976	622,567	421,348
Other revenue (*)	657,609	652,602	690,044
Gross revenue	11,292,388	10,547,831	10,383,999
Related tax	(716,366)	(680,496)	(605,992)
Net revenue	10,576,022	9,867,335	9,778,007

Schedule of detail of revenues by geographical location

	12/31/2017	%	12/31/2016	%	12/31/2015	%
Domestic	9,044,990	85.5	8,395,364	85.1	8,670,023	88.7
International	1,531,032	14.5	1,471,971	14.9	1,107,984	11.3
Net revenue	10,576,022	100.0	9,867,335	100.0	9,778,007	100.0

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24. Financial results (Tables)

12 Months Ended

Dec. 31, 2017

Financial Results Tables

Schedule of financial results

	12/31/2017	12/31/2016	12/31/2015
Financial income
Income from derivatives	35,053	120,403	174,693
Income from short-term investments	119,863	152,656	178,147
Monetary variation	14,208	12,411	14,531
(-) Taxes on financial income (a)	(24,393)	(23,041)	(47,588)
Gain from the exchange offer	-	286,799	-
Interest income	18,245	4,651	8,539
Other	50,470	14,625	4,245
Total financial income	213,446	568,504	332,567
Financial expenses
Losses from derivatives	(40,770)	(277,183)	(124,536)
Interest on short and long-term debt	(727,285)	(787,661)	(885,947)
Bank charges and expenses	(61,711)	(96,515)	(60,760)
Monetary variation	(2,993)	(3,867)	(3,921)
Tender offer costs (b)	(53,041)	-	-
Other (c)	(164,661)	(106,338)	(253,727)
Total financial expenses	(1,050,461)	(1,271,564)	(1,328,891)
Exchange rate variation, net	(81,744)	1,367,937	(2,266,999)
Total	(918,759)	664,877	(3,263,323)

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25. Segments (Tables)

12 Months Ended

Dec. 31, 2017

Segments Tables

Schedule of operating segment

	12/31/2017
	Flight transportation	Smiles loyalty program	Combined  information	Eliminations	Total consolidated
Assets
Current	2,389,146	1,901,672	4,290,818	(945,820)	3,344,998
Noncurrent	6,769,399	269,239	7,038,638	(378,888)	6,659,750
Total assets	9,158,545	2,170,911	11,329,456	(1,324,708)	10,004,748
Liabilities
Current	5,508,427	1,096,357	6,604,784	(854,739)	5,750,045
Noncurrent	7,131,078	202,835	7,333,913	(10,264)	7,323,649
Total equity (deficit)	(3,480,960)	871,719	(2,609,241)	(459,705)	(3,068,946)
Total liabilities and equity (deficit)	9,158,545	2,170,911	11,329,456	(1,324,708)	10,004,748

	12/31/2016
	Flight  transportation	Smiles loyalty program	Combined information	Eliminations	Total consolidated
Assets
Current	1,426,750	1,413,422	2,840,172	(759,458)	2,080,714
Noncurrent	6,474,404	513,456	6,987,860	(664,219)	6,323,641
Total assets	7,901,154	1,926,878	9,828,032	(1,423,677)	8,404,355
Liabilities
Current	4,767,322	1,061,806	5,829,128	(980,386)	4,848,742
Noncurrent	6,782,835	229,725	7,012,560	(100,196)	6,912,364
Total equity (deficit)	(3,649,003)	635,347	(3,013,656)	(343,095)	(3,356,751)
Total liabilities and equity (deficit)	7,901,154	1,926,878	9,828,032	(1,423,677)	8,404,355

	12/31/2017
	Flight transportation	Smiles loyalty program (d)	Combined  information	Eliminations	Total  consolidated
Net revenue
Passenger (*)	8,785,938	-	8,785,938	399,867	9,185,805
Cargo and other (*)	768,566	-	768,566	(104,350)	664,216
Mileage revenue (*)	-	1,804,129	1,804,129	(1,078,128)	726,001
Total net revenue	9,554,504	1,804,129	11,358,633	(782,611)	10,576,022
Operating costs and expenses
Salaries	(1,654,388)	(53,723)	(1,708,111)	-	(1,708,111)
Aircraft fuel	(2,887,737)	-	(2,887,737)	-	(2,887,737)
Aircraft rent	(939,744)	-	(939,744)	-	(939,744)
Sales and marketing	(518,025)	(69,917)	(587,942)	(2,872)	(590,814)
Landing fees	(664,170)	-	(664,170)	-	(664,170)
Aircraft, traffic and mileage servicing	(649,126)	(990,685)	(1,639,811)	765,075	(874,736)
Maintenance, materials and repairs	(368,719)	-	(368,719)	-	(368,719)
Depreciation and amortization	(491,806)	(13,619)	(505,425)	-	(505,425)
Passenger service expenses	(437,045)	-	(437,045)	-	(437,045)
Other operating expenses	(591,087)	(26,385)	(617,472)	7,162	(610,310)
Total operating costs and expenses	(9,201,847)	(1,154,329)	(10,356,176)	769,365	(9,586,811)
Equity results	395,245	-	395,245	(394,701)	544
Operating result before financial result, net and income taxes	747,902	649,800	1,397,702	(407,947)	989,755
Financial results
Financial income	184,448	205,431	389,879	(176,433)	213,446
Financial expenses	(1,225,315)	(2,201)	(1,227,516)	177,055	(1,050,461)
Exchange rate variation, net	(78,462)	(3,284)	(81,746)	2	(81,744)
Total financial results	(1,119,329)	199,946	(919,383)	624	(918,759)
Income (loss) before income taxes	(371,427)	849,746	478,319	(407,323)	70,996
Income taxes	390,611	(89,131)	301,480	5,733	307,213
Net income for the year	19,184	760,615	779,799	(401,590)	378,209
Attributable to equity holders of the parent	19,184	401,590	420,774	(401,590)	19,184
Attributable to non-controlling interests of Smiles	-	359,025	359,025	-	359,025

	12/31/2016
	Flight transportation	Smiles loyalty program	Combined  information	Eliminations	Total  consolidated
Net revenue
Passenger (*)	8,340,545	-	8,340,545	330,897	8,671,442
Cargo and other (*)	729,096	-	729,096	426	729,522
Mileage revenue (*)	-	1,548,109	1,548,109	(1,081,738)	466,371
Total net revenue	9,069,641	1,548,109	10,617,750	(750,415)	9,867,335
Operating costs and expenses
Salaries	(1,615,740)	(41,045)	(1,656,785)	-	(1,656,785)
Aircraft fuel	(2,695,390)	-	(2,695,390)	-	(2,695,390)
Aircraft rent	(996,945)	-	(996,945)	-	(996,945)
Sales and marketing	(494,076)	(61,908)	(555,984)	-	(555,984)
Landing fees	(687,366)	-	(687,366)	-	(687,366)
Aircraft, traffic and mileage servicing	(660,009)	(828,887)	(1,488,896)	735,399	(753,497)
Maintenance, materials and repairs	(593,090)	-	(593,090)	-	(593,090)
Depreciation and amortization	(439,173)	(8,495)	(447,668)	-	(447,668)
Passenger service expenses	(461,837)	-	(461,837)	-	(461,837)
Other operating expenses	(316,766)	(4,197)	(320,963)	15	(320,948)
Total operating costs and expenses	(8,960,392)	(944,532)	(9,904,924)	735,414	(9,169,510)
Equity results	287,134	(2,530)	284,604	(285,884)	(1,280)
Operating result before financial result, net and income taxes	396,383	601,047	997,430	(300,885)	696,545
Financial results
Financial income	395,901	212,758	608,659	(40,155)	568,504
Financial expenses	(1,311,940)	(168)	(1,312,108)	40,544	(1,271,564)
Exchange rate variation, net	1,362,145	5,792	1,367,937	-	1,367,937
Total financial results	446,106	218,382	664,488	389	664,877
Income before income taxes	842,489	819,429	1,661,918	(300,496)	1,361,422
Income taxes	7,130	(271,156)	(264,026)	4,968	(259,058)
Net income for the year	849,619	548,273	1,397,892	(295,528)	1,102,364
Attributable to equity holders of the parent	849,619	295,528	1,145,147	(295,528)	849,619
Attributable to non-controlling interests of Smiles	-	252,745	252,745	-	252,745

	12/31/2015
	Flight  transportation	Smiles loyalty program	Combined information	Eliminations	Total consolidated
Net revenue
Passenger (*)	8,294,463	-	8,294,463	288,925	8,583,388
Cargo and other (*)	941,928	47,199	989,127	(19,198)	969,929
Miles revenue (*)	-	1,172,322	1,172,322	(947,632)	224,690
Total net revenue	9,236,391	1,219,521	10,455,912	(677,905)	9,778,007
Operating costs and expenses
Salaries	(1,544,157)	(36,374)	(1,580,531)	-	(1,580,531)
Aircraft fuel	(3,301,368)	-	(3,301,368)	-	(3,301,368)
Aircraft rent	(1,100,086)	-	(1,100,086)	-	(1,100,086)
Sales and marketing	(566,329)	(51,074)	(617,403)	-	(617,403)
Landing fees	(681,378)	-	(681,378)	-	(681,378)
Aircraft, traffic and mileage servicing	(615,792)	(700,200)	(1,315,992)	637,917	(678,075)
Maintenance, materials and repairs	(603,925)	-	(603,925)	-	(603,925)
Depreciation and amortization	(416,856)	(2,835)	(419,691)	-	(419,691)
Passenger service expenses	(481,765)	-	(481,765)	-	(481,765)
Other operating expenses	(485,738)	(13,183)	(498,921)	5,300	(493,621)
Total operating costs and expenses	(9,797,394)	(803,666)	(10,601,060)	643,217	(9,957,843)
Equity results	179,377	(5,932)	173,445	(177,386)	(3,941)
Operating result before financial result, net and income taxes	(381,626)	409,923	28,297	(212,074)	(183,777)
Financial results
Financial income	287,058	156,042	443,100	(110,533)	332,567
Financial expenses	(1,424,321)	(15,104)	(1,439,425)	110,534	(1,328,891)
Exchange rate variation, net	(2,264,750)	(2,248)	(2,266,998)	(1)	(2,266,999)
Total financial results	(3,402,013)	138,690	(3,263,323)	-	(3,263,323)
Income (loss) before income taxes	(3,783,639)	548,613	(3,235,026)	(212,074)	(3,447,100)
Income taxes	(677,244)	(178,691)	(855,935)	11,795	(844,140)
Net income (loss) for the year	(4,460,883)	369,922	(4,090,961)	(200,279)	(4,291,240)
Attributable to equity holders of the parent	(4,460,883)	200,279	(4,260,604)	(200,279)	(4,460,883)
Attributable to non-controlling interests of Smiles	-	169,643	169,643	-	169,643

(*) Eliminations are related to transactions between GLA and Smiles Fidelidade.

XML

26. Commitments (Tables)

12 Months Ended

Dec. 31, 2017

Commitments Tables

Schedule of approximate amount of firm orders

	12/31/2017	12/31/2016
2018	-	1,787,388
2019	1,117,604	2,917,833
2020	4,538,258	4,471,172
2021	6,198,259	6,106,634
2022	6,353,457	6,229,538
Thereafter	26,882,804	26,519,864
Total	45,090,382	48,032,429

Schedule of advances for aircraft acquisition

	12/31/2017	12/31/2016
2017	-	286,829
2018	316,215	483,518
2019	773,268	658,930
2020	848,003	835,468
2021	852,458	839,856
2022	866,119	853,316
Thereafter	2,807,501	2,766,624
Total	6,463,564	6,724,541

Schedule of future payments of non-cancelable operating lease contracts

	12/31/2017	12/31/2016
2017	-	857,747
2018	858,508	839,343
2019	928,226	889,940
2020	888,944	873,692
2021	746,595	745,719
2022	630,477	646,388
Thereafter	1,251,964	1,393,896
Total minimum lease payments	5,304,714	6,246,725

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27. Financial instruments and risk management (Tables)

12 Months Ended

Dec. 31, 2017

Financial Instruments And Risk Management Tables

Schedule of classification of financial instruments at fair value

	Measured at fair value through profit or loss		Loans and receivables (financing) (c)
	12/31/2017	12/31/2016	12/31/2017	12/31/2016
Assets
Cash and cash equivalents (a)	434,295	269,797	592,567	292,410
Short-term investments (a)	955,589	431,233	-	-
Restricted cash	268,047	168,769	-	-
Derivatives assets	40,647	3,817	-	-
Trade receivables	-	-	936,478	760,237
Deposits (b)	-	-	655,244	756,810
Other assets	-	-	123,721	118,058
Liabilities
Debt	-	-	7,105,667	6,379,220
Suppliers	-	-	1,471,150	1,111,514
Derivatives liabilities	34,457	89,211	-	-
Operating leases	-	-	139,110	7,233

Schedule of derivative financial instruments

	Fuel			Foreign currency			Interest rate			Equity forward (**)			Total
Derivative assets (liabilities) as of December 31, 2015 (*)		—			1,766			(141,443	)		—			(139,677	)
Fair value variations:
Net gains (losses) recognized in profit or loss (a)		309			(40,931	)		(1	)		—			(40,623	)
Losses recognized in other comprehensive income (loss)		—			—			(4,842	)		—			(4,842	)
Settlements during the year		3,508			39,165			57,075			—			99,748
Derivative assets (liabilities) as of December 31, 2016 (*)		3,817			—			(89,211	)		—			(85,394	)
Fair value variations:
Net gains recognized in profit or loss (a)		13,768			—			—			11,094			24,862
Losses recognized in other comprehensive income (loss)		35,505			—			(1,093	)		—			34,412
Settlements (payments received) during the year		(12,443	)		—			55,847			(11,094	)		32,310
Derivative assets (liabilities) as of December 31, 2017 (*)		40,647			—			(34,457	)		—			6,190
Changes in other comprehensive income (loss)
Balances as of December 31, 2015		—			—			(178,942	)		—			(178,942	)
Fair value adjustments during the year		—			—			(4,842	)		—			(4,842	)
Net reversal to profit or loss (b)		—			—			128,731			—			128,731
Tax effects		—			—			(92,179	)		—			(92,179	)
Balances as of December 31, 2016		—			—			(147,229	)		—			(147,229	)
Fair value adjustments during the year		35,505			—			(1,093	)		—			34,412
Net reversal to profit or loss (b)		—			—			33,501			—			33,501
Balances as of December 31, 2017		35,505			—			(114,821	)		—			(79,316	)
Effects on profit or loss (a-b)		13,768			—			(33,501	)		11,094			(8,639	)
As of December 31, 2017
Recognized in operating costs an expenses		8,626			—			(11,548	)		—			(2,922	)
Recognized in financial results		5,142			—			(21,953	)		11,094			(5,717	)
As of December 31, 2016
Recognized in operating costs an expenses		—			—			(12,574	)		—			(12,574	)
Recognized in financial results		309			(40,931	)		(116,158	)		—			(156,780	)
As of December 31, 2015
Recognized in operating costs an expenses		—			—			(13,150	)		—			(13,150	)
Recognized in financial results		(29,964	)		102,696			(22,575	)		—			50,157

Schedule of recycled to profit or loss

	2018	2019	2020	2021	2022	Thereafter
Interest rate	(14,028)	(15,099)	(14,062)	(12,328)	(11,013)	(48,291)
Fuel	35,505	-	-	-	-	-
Recycle expectation (*)	21,477	(15,099)	(14,062)	(12,328)	(11,013)	(48,291)

Schedule of company's foreign currency exposure

	12/31/2017	12/31/2016
Assets
Cash and cash equivalents, short-term investments and restricted cash	1,215,716	548,792
Trade receivables	126,140	104,800
Deposits	655,244	756,810
Derivatives	40,647	3,817
Other assets	-	10,184
Total assets	2,037,747	1,424,403
Liabilities
Short and long-term debt	4,593,169	3,596,379
Finance leases	1,476,151	1,718,012
Foreign suppliers	644,775	344,654
Derivatives	34,457	89,211
Operating leases	139,110	7,233
Total liabilities	6,887,662	5,755,489
Exchange exposure	4,849,915	4,331,086
Commitments not recorded in the statements of financial position
Future commitments resulting from operating leases	5,304,714	6,246,725
Future commitments resulting from firm aircraft orders	45,090,382	48,032,429
Total	50,395,096	54,279,154
Total foreign currency exposure - R$	55,245,011	58,610,240
Total foreign currency exposure - US$	16,700,426	17,983,566
Exchange rate (R$/US$)	3.3080	3.2591

Schedule of financial liability

	Less than 6  months	6 - 12 months	1 - 5 years	More than 5 years	Total
Short and long-term debt	369,496	793,376	2,651,018	3,291,777	7,105,667
Suppliers	1,245,352	3,772	222,026	-	1,471,150
Suppliers - Forfaiting	78,416	-	-	-	78,416
Derivatives liabilities	34,457	-	-	-	34,457
Operating leases	28,387	-	110,723	-	139,110
As of December 31, 2017	1,756,108	797,148	2,983,767	3,291,777	8,828,800
Short and long-term debt	499,542	335,748	2,654,007	2,889,923	6,379,220
Suppliers	1,097,997	-	13,517	-	1,111,514
Derivatives liabilities	89,211	-	-	-	89,211
Operating leases	3,215	4,018	-	-	7,233
As of December 31, 2016	1,689,965	339,766	2,667,524	2,889,923	7,587,178

Schedule of company's capital management

	12/31/2017	12/31/2016
Short and long-term debt	7,105,667	6,379,220
(-) Cash and cash equivalents	(1,026,862)	(562,207)
(-) Short-term investments	(955,589)	(431,233)
(-) Restricted cash	(268,047)	(168,769)
A - Net debt	4,855,169	5,217,011
B – Total deficit	(3,068,946)	(3,356,751)
C = (B + A) - Total capital and net debt	1,786,223	1,860,260

Schedule of hedged exposure

	1Q18	2Q18	3Q18	4Q18	Total 12M
Percentage of fuel exposure hedged	27%	10%	6%	5%	12%
Amount in barrels (thousand barrels)	855	360	220	163	1,598
Future rate agreed per barrel (US$)	51.89	51.33	51.46	51.58	51.67
Total in thousands of Brazilian Reais	146,760	61,124	37,453	27,813	273,120

Schedule of foreign currency risk

	Exchange rate	Effect on profit/loss
Net liabilities exposed to the risk of appreciation of the U.S. dollar (R$3.3080/US$1.00)	3.3080	(4,849,915)
Dollar depreciation (-50%)	1.6540	2,424,957
Dollar depreciation (-25%)	2.4810	1,212,479
Dollar appreciation (+25%)	4.1350	(1,212,479)
Dollar appreciation (+50%)	4.9620	(2,424,957)

Schedule of fluctuations in interest rates

	Financial debt net of short-term investments (a)		Derivatives (c)
Risk	Increase in the CDI rate	Decrease in the Libor rate	Decrease in the  Libor rate
Referential rates	6.89%	1.69%	1.69%
Exposure amount (probable scenario) (b)	1,129,300	(287,608)	(34.457)
Possible adverse scenario (+25%)	90,595	(6,091)	(730)
Remote adverse scenario (+50%)	108,714	(7,309)	(876)

Schedule of classifications of the valuation method

		12/31/122017		12/31/2016
	Fair value level	Book value	Fair value	Book value	Fair value
Cash and cash equivalents	Level 2	434,295	434,295	269,797	269,797
Short-term investments	Level 1	32,701	32,701	41,104	41,104
Short-term investments	Level 2	922,888	922,888	390,129	390,129
Restricted cash	Level 2	268,047	268,047	168,769	168,769
Derivatives assets	Level 2	40,647	40,647	3,817	3,817
Derivatives liabilities	Level 2	(34,457)	(34,457)	(89,211)	(89,211)

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28. Changes in liabilities arising from financing activities (Tables)

12 Months Ended

Dec. 31, 2017

Changes In Liabilities Arising From Financing Activities Tables

Changes in liabilities arising from financing activities

12/31/2017
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Interest paid on loans	Import financing	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	6,379,220	612,396	-	(505,105)	63,066	68,895	502,529	(15,334)	7,105,667
Non-controlling interests from Smiles	293,247	(254,892)	359,025	-	-	-	-	14,633	412,013
Capital stock	3,080,110	2,692	-	-	-	-	-	-	3,082,802
Share issuance costs	(155,618)	(523)	-	-	-	-	-	523	(155,618)

12/31/2016
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Repurchase of debt securities	Interest paid on loans	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	9,304,926	(890,559)	-	(286,799)	(606,405)	(1,220,608)	627,672	(549,007)	6,379,220
Non-controlling interests from Smiles	224,022	(171,829)	252,745	-	-	-	-	(11,691)	293,247
Capital stock	3,080,110	-	-	-	-	-	-	-	3,080,110
Share issuance costs	(155,223)	(395)	-	-	-	-	-	-	(155,618)

12/31/2015
						Non-cash changes
	Opening balance	Cash flows	Net income for the year	Repurchase of debt securities	Interest paid on loans	Exchange variations on loans	Interest on loans	Other	Closing balance
Short and long-term debt	6,235,239	426,973	-	-	(548,773)	(2,337,999)	600,410	253,078	9,304,926
Non-controlling interests from Smiles	185,413	(136,822)	169,643	-	-	-	-	5,788	224,022
Capital stock	2,618,799	465,048	-	-	-	-	-	(3,737)	3,080,110
Share issuance costs	(150,214)	(5,009)	-	-	-	-	-	-	(155,223)

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29. Insurance (Tables)

12 Months Ended

Dec. 31, 2017

Insurance Tables

Schedule of insurance coverage by nature

Aviation	In thousands of Brazilian Reais	In thousands of U.S. dollars
GLA
Guarantee - hull/war	12,504,240	3,780,000
Civil liability per event/aircraft (*)	2,481,000	750,000
Inventories (local) (*)	992,400	300,000
Smiles
Rent insurance (Rio Negro – Alphaville complex)	1,470	-
D&O liability insurance	50,000	-
Fire insurance (Property insurance Rio Negro – Alphaville complex)	9,025	-

XML

1. General information (Details Narrative) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfGeneralInformationLineItems [Line Items]
Advance ticket sales	R$ 1,456,939	R$ 1,185,945
Total debt	7,105,667	6,379,220
Proceesds from sale	68,679	R$ 536,444	R$ (167,646)
Debentures [Member]
DisclosureOfGeneralInformationLineItems [Line Items]
Total debt	R$ 1,036,348

XML

2. Approval and summary of significant accounting policies applied in preparing the financial statements (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
GAC Inc. ("GAC") [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	GAC
Date of constitution	Mar. 23, 2006
Location	Cayman Islands
Operational activity	Aircraft acquisition
Ownership equity interest	100.00%	100.00%
Gol Finance Inc. ("Gol Finance") [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	Gol Finance Inc.
Date of constitution	Mar. 16, 2006
Location	Cayman Islands
Operational activity	Financial funding
Ownership equity interest	100.00%	100.00%
Gol LuxCo S.A. ("Gol LuxCo") [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	Gol Finance
Date of constitution	Jun. 21, 2013
Location	Luxembourg
Operational activity	Financial funding
Ownership equity interest	100.00%	100.00%
Gol Linhas Aereas S.A. ("GLA") [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	GLA
Date of constitution	Apr. 09, 2007
Location	Brazil
Operational activity	Flight transportation
Ownership equity interest	100.00%	100.00%
Smiles S.A. ("Smiles") [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	Smiles Fidelidade
Date of constitution	Aug. 01, 2011
Location	Brazil
Operational activity	Loyalty program
Ownership equity interest	52.70%	53.80%
Smiles S.A. ("Smiles") [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	Smiles Viagens (*)
Date of constitution	Aug. 10, 2017
Location	Brazil
Operational activity	Travel agency
Ownership equity interest	100.00%	0.00%
Gol Dominicana Lineas Aereas SAS ("Gol Dominicana") [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	Gol Dominicana
Date of constitution	Feb. 28, 2013
Location	Dominican Republic
Operational activity	Non-operational
Ownership equity interest	100.00%	100.00%
SCP Trip [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	SCP Trip
Date of constitution	Apr. 27, 2012
Location	Brazil
Operational activity	Flight magazine
Ownership equity interest	60.00%	60.00%
Netpoints Fidelidade S.A., [Member]
DisclosureOfSignificantAccountingPoliciesLineItems [Line Items]
Name of entity	Netpoints
Date of constitution	Nov. 08, 2013
Location	Brazil
Operational activity	Loyalty program
Ownership equity interest	25.40%	25.40%

XML

2. Approval and summary of significant accounting policies applied in preparing the financial statements (Details Narrative)	12 Months Ended
	Dec. 31, 2017
Approval And Summary Of Significant Accounting Policies Applied In Preparing Financial Statements
Estimated residual value	20.00%

XML

3. Cash and cash equivalents (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash and cash equivalents [abstract]
Cash and bank deposits	R$ 427,608	R$ 246,528
Cash equivalents	599,254	315,679
Total	R$ 1,026,862	R$ 562,207	R$ 1,072,332	R$ 1,898,773

XML

3. Cash and cash equivalents (Details 1) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfCashAndCashEquivalentsLineItems [Line Items]
Cash equivalents	R$ 599,254	R$ 315,679
Private bonds [Member]
DisclosureOfCashAndCashEquivalentsLineItems [Line Items]
Cash equivalents	164,959	45,882
Government bonds [Member]
DisclosureOfCashAndCashEquivalentsLineItems [Line Items]
Cash equivalents	14,039	0
Investment funds [member]
DisclosureOfCashAndCashEquivalentsLineItems [Line Items]
Cash equivalents	R$ 420,256	R$ 269,797

XML

3. Cash and cash equivalents (Details Narrative)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Private bonds [Member]
DisclosureOfCashAndCashEquivalentsLineItems [Line Items]
Weighted average rate equivalent	77.60%	52.20%

XML

4. Short-term investments (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfShortTermInvestmentsLineItems [Line Items]
Short-term investments	R$ 955,589	R$ 431,233
Private bonds [Member]
DisclosureOfShortTermInvestmentsLineItems [Line Items]
Short-term investments	731,061	77,080
Government bonds [Member]
DisclosureOfShortTermInvestmentsLineItems [Line Items]
Short-term investments	32,701	41,104
Investment funds [member]
DisclosureOfShortTermInvestmentsLineItems [Line Items]
Short-term investments	R$ 191,827	R$ 313,049

XML

4. Short-term investments (Details Narrative)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Private bonds [Member]
DisclosureOfShortTermInvestmentsLineItems [Line Items]
Weighted average rate equivalent	98.00%	38.00%
Government bonds [Member]
DisclosureOfShortTermInvestmentsLineItems [Line Items]
Weighted average rate equivalent	107.70%	102.30%
Private bonds and government bonds [Member]
DisclosureOfShortTermInvestmentsLineItems [Line Items]
Weighted average rate equivalent	98.90%	101.00%

XML

5. Restricted cash (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfRestrictedCashLineItems [Line Items]
Restricted cash and cash equivalents	R$ 268,047	R$ 168,769
Deposits In Guarantee Of Letter Of Credit [Member]
DisclosureOfRestrictedCashLineItems [Line Items]
Restricted cash and cash equivalents	60,423	15,721
Escrow Deposits [Member]
DisclosureOfRestrictedCashLineItems [Line Items]
Restricted cash and cash equivalents	71,110	67,345
Escrow Deposits - Leases [Member]
DisclosureOfRestrictedCashLineItems [Line Items]
Restricted cash and cash equivalents	116,131	78,015
Other Deposits [Member]
DisclosureOfRestrictedCashLineItems [Line Items]
Restricted cash and cash equivalents	R$ 20,383	R$ 7,688

XML

6. Trade receivables (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	R$ 975,159	R$ 794,419
Allowance for doubtful accounts	(38,681)	(34,182)	R$ (50,389)
Total trade receivables	936,478	760,237
Domestic customers [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	849,000	686,740
Domestic customers [Member] | Credit card administrators [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	454,975	345,798
Domestic customers [Member] | Travel agencies [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	307,149	228,089
Domestic customers [Member] | Cargo agencies [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	39,225	41,926
Domestic customers [Member] | Airline partners companies [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	3,780	4,153
Domestic customers [Member] | Other [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	43,871	66,774
Foreign customers [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	126,159	107,679
Foreign customers [Member] | Credit card administrators [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	67,479	49,104
Foreign customers [Member] | Travel agencies [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	9,829	16,323
Foreign customers [Member] | Cargo agencies [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	823	2,215
Foreign customers [Member] | Airline partners companies [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	47,662	31,200
Foreign customers [Member] | Other [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	R$ 366	R$ 8,837

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6. Trade receivables (Details 1) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	R$ 975,159	R$ 794,419
Not yet due Until 30 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	594,968	348,168
Not yet due 31 to 60 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	133,438	151,186
Not yet due 61 to 90 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	44,642	66,925
Not yet due 91 to 180 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	71,116	86,652
Not yet due 181 to 360 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	26,541	11,147
Not yet due above 360 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	241	239
Not yet due [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	870,946	664,317
Overdue until 30 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	21,686	19,117
Overdue 31 to 60 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	8,338	5,623
Overdue 61 to 90 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	3,559	10,915
Overdue 91 to 180 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	15,620	22,648
Overdue 181 to 360 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	8,059	20,609
Overdue above 360 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	8,270	17,008
Overdue above 360 days [Member]
DisclosureOfTradeReceivablesLineItems [Line Items]
Gorss trade receivables	R$ 65,532	R$ 95,920

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6. Trade receivables (Details 2) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Trade Receivables Details 2
Balance at beginning of the year	R$ (34,182)	R$ (50,389)
Additions	(24,913)	(9,806)
Unrecoverable amounts	17,649	16,250
Recoveries	2,765	9,763
Balance at the end of the year	R$ (38,681)	R$ (34,182)

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7. Inventories (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Inventories Details
Consumables	R$ 28,006	R$ 27,281
Parts and maintenance materials	162,409	160,884
Others	585	6,867
Provision for obsolescence	(12,509)	(12,444)	R$ (12,444)
Inventories	R$ 178,491	R$ 182,588

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7. Inventories (Details 1) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Inventories Details 1
Balances at the beginning of the year	R$ (12,444)	R$ (12,444)
Addition	(3,059)	0
Write-off	2,994	0
Balances at the end of the year	R$ (12,509)	R$ (12,444)

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8. Deferred and recoverable taxes (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred And Recoverable Taxes Details
Prepaid income taxes	R$ 66,786	R$ 51,215
Withholding income tax (IRRF)	7,308	9,601
PIS and COFINS	408	16,908
Withholding tax of public institutions	6,127	8,130
Value added tax - IVA	5,431	12,044
Others	4,195	1,449
Total	90,255	99,347
Current assets	83,210	27,287
Noncurrent assets	R$ 7,045	R$ 72,060

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8. Deferred and recoverable taxes (Details 1) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Net operating losses carryforward
Income tax losses	R$ 129,316	R$ 9,149
Negative basis of social contribution	46,555	3,294
Total deferred taxes, net	88,509	(230,861)
Deferred tax assets - noncurrent	276,514	107,159
Deferred tax liabilities - noncurrent	(188,005)	(338,020)
Mileage Program [Member]
Net operating losses carryforward
Total deferred taxes, net	0	9
Allowance For Doubtful Accounts And Other Credits [Member]
Net operating losses carryforward
Total deferred taxes, net	63,585	13,823
Provision For Losses On Vrg's Acquisition [Member]
Net operating losses carryforward
Total deferred taxes, net	143,350	143,350
Provision For Legal Proceedings And Tax Liabilities [Member]
Net operating losses carryforward
Total deferred taxes, net	83,263	17,487
Aircraft Return [Member]
Net operating losses carryforward
Total deferred taxes, net	68,438	32,515
Derivative Transactions Settled [Member]
Net operating losses carryforward
Total deferred taxes, net	9,603	1,635
Tax Benefit Due To Goodwill Incorporation [Member]
Net operating losses carryforward
Total deferred taxes, net	14,588	29,177
Flight Rights [Member]
Net operating losses carryforward
Total deferred taxes, net	(353,226)	(353,226)
Depreciation Of Engines And Parts For Aircraft Maintenance [Member]
Net operating losses carryforward
Total deferred taxes, net	(167,913)	(148,581)
Reversal Of Goodwill Amortization On Vrg's Acquisition [Member]
Net operating losses carryforward
Total deferred taxes, net	(127,659)	(127,659)
Aircraft Leases [Member]
Net operating losses carryforward
Total deferred taxes, net	34,660	30,589
Other Temporary Differences [Member]
Net operating losses carryforward
Total deferred taxes, net	R$ 143,949	R$ 117,577

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8. Deferred and recoverable taxes (Details 2) - Unused Tax Losses [Member] - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfDeferredAndRecoverableTaxesLineItems [Line Items]
Income tax losses	R$ 172,547	R$ 190,125
Negative basis of social contribution	172,547	190,125
Gol Linhas Aereas S.A. ("GLA") [Member]
DisclosureOfDeferredAndRecoverableTaxesLineItems [Line Items]
Income tax losses	4,134,099	3,971,845
Negative basis of social contribution	4,134,099	3,971,845
Smiles S.A. ("Smiles") [Member]
DisclosureOfDeferredAndRecoverableTaxesLineItems [Line Items]
Income tax losses	758,289	867,403
Negative basis of social contribution	R$ 758,289	R$ 867,403

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8. Deferred and recoverable taxes (Details 3) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Deferred And Recoverable Taxes Details 3
Income (loss) before income taxes	R$ 70,996	R$ 1,361,422	R$ (3,447,100)
Combined tax rate	34.00%	34.00%	34.00%
Income at the statutory combined tax rate	R$ (24,139)	R$ (462,883)	R$ 1,172,014
Adjustments to calculate the effective tax rate:
Equity results	185	(435)	(1,340)
Tax income (losses) from wholly-owned subsidiaries	(106,533)	56,239	(83,702)
Income tax on permanent differences and other	(14,012)	3,803	1,920
Nontaxable revenues (nondeductible expenses), net	(51,572)	(41,913)	(111,828)
Exchange variation on foreign investments	(20,225)	242,190	(502,938)
Interest attributable to shareholders' equity	4,817	3,543	4,673
Benefit on tax losses and temporary differences not constituted	291,002	(59,602)	(1,322,939)
Use of tax losses in tax installment payment programs(*)	227,690	0	0
Income taxes expense	307,213	(259,058)	(844,140)
Current income taxes	(239,846)	(257,944)	(196,140)
Deferred income taxes	547,059	(1,114)	(648,800)
Total income taxes expense	R$ 307,213	R$ (259,058)	R$ (844,140)

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8. Deferred and recoverable taxes (Details narrative) - Unused Tax Losses [Member] - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfDeferredAndRecoverableTaxesLineItems [Line Items]
Tax credits	R$ 62,548	R$ 58,666
Net operating losses carryforward	3,882
Unrecognize net operating losses carryforward	R$ 34,845

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9. Deposits (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deposits Details
Judicial deposits	R$ 508,515	R$ 432,182
Maintenance deposits	484,565	584,149
Deposits in guarantee for lease agreements	170,679	172,661
Deposits	R$ 1,163,759	R$ 1,188,992

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9. Deposits (Details Narrative) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfDepositsLineItems [Line Items]
Maintenance guarantee	R$ 218,361	R$ 336,318
Maintenance reserve	266,204	247,831
Legal Proceedings Contingent Liability [member]
DisclosureOfDepositsLineItems [Line Items]
Blocked amounts under judicial deposits	108,860	101,352
Third Party Claim Contingent Liability [Member]
DisclosureOfDepositsLineItems [Line Items]
Blocked amounts under judicial deposits	R$ 74,300	R$ 77,695

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10. Transactions with related parties (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of transactions between related parties [line items]
Salaries and benefits	R$ (1,708,111)	R$ (1,656,785)	R$ (1,580,531)
Key Management Personnel of Entity [Member]
Disclosure of transactions between related parties [line items]
Salaries and benefits	57,838	38,134	28,700
Related taxes and charges	6,019	4,690	5,352
Share-based payments	11,219	11,226	10,469
Remuneration	R$ 75,076	R$ 54,050	R$ 44,521

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10. Transactions with related parties (Details Narrative) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of transactions between related parties [line items]
Engine maintenance funding	R$ 372,511	R$ 201,170
Engine maintenance expenses	403,195	210,220
Deferred revenue current	20,557	22,430
Deferred revenue non-current	3,426	26,169
Gol Linhas Aereas S.A. ("GLA") [Member]
Disclosure of transactions between related parties [line items]
Total transportation and consulting services expense	8,583	13,013	R$ 16,106
Related parties balance payable	R$ 769	R$ 800

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11. Share-based payments (Details)	12 Months Ended
	Dec. 31, 2017 shares R$ / shares	Dec. 31, 2016 shares Segment R$ / shares	Dec. 31, 2015 shares R$ / shares	Dec. 31, 2014 shares R$ / shares	Dec. 31, 2013 shares R$ / shares	Dec. 31, 2012 shares R$ / shares	Dec. 31, 2011 shares R$ / shares	Dec. 31, 2010 shares R$ / shares	Dec. 31, 2009 shares R$ / shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Total options granted | shares	17,495,238
Number of options outstanding as of 12/31/2017 | shares	9,040,293
Exercise price of the option (In Reais) | R$ / shares	R$ 8.63
Stock Option Plan [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Date of the Board meeting	Aug. 08, 2017	Sep. 30, 2016	Aug. 11, 2015	Aug. 12, 2014	May 13, 2013	Oct. 19, 2012	Dec. 20, 2010	Feb. 02, 2010	Feb. 04, 2009
Total options granted	947,767	5,742,732	1,930,844	653,130	802,296	778,912	2,722,444	2,774,640	1,142,473
Number of options outstanding as of 12/31/2017 | shares	771,814	4,237,873	1,323,567	392,042	437,315	392,895	538,915	796,872	149,000
Exercise price of the option (In Reais) | R$ / shares	R$ 8.44	R$ 2.62	R$ 9.35	R$ 11.31	R$ 12.76	R$ 12.81	R$ 27.83	R$ 20.65	R$ 10.52
The fair value of the option at grant date (In Reais) | R$ / shares	R$ 7.91	R$ 1.24	R$ 3.37	R$ 7.98	R$ 6.54	R$ 5.32	R$ 16.07	R$ 16.81	R$ 8.53
Estimate volatility of share price	80.62%	98.20%	55.57%	52.66%	46.91%	52.25%	44.55%	77.95%	76.91%
Expected dividend yield	1.17%	6.59%	5.06%	3.27%	2.00%	2.26%	0.47%	2.73%	0.00%
Risk-free return rate	11.25%	14.25%	13.25%	11.00%	7.50%	9.00%	10.25%	8.65%	12.66%

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11. Share-based payments (Details 1)	12 Months Ended
	Dec. 31, 2017 shares Segment R$ / shares	Dec. 31, 2016 Segment R$ / shares	Dec. 31, 2015 shares R$ / shares	Dec. 31, 2014 shares R$ / shares	Dec. 31, 2013 shares R$ / shares	Dec. 31, 2012 shares R$ / shares	Dec. 31, 2011 shares R$ / shares	Dec. 31, 2010 shares R$ / shares	Dec. 31, 2009 shares R$ / shares
Number of stock options
Options granted | shares	17,495,238
Weighted average exercise price
Options granted	R$ 8.63
Stock Option Plan [Member]
Number of stock options
Options outstanding as beginning | Segment	8,992,055
Options granted	947,767	5,742,732	1,930,844	653,130	802,296	778,912	2,722,444	2,774,640	1,142,473
Options cancelled and adjustments in estimated prescribed rights | Segment	(422,763)
Options exercised | Segment	(476,766)
Options outstanding as ending | Segment	9,040,293	8,992,055
Number of options exercisable as ending | Segment	7,307,151	6,214,124
Weighted average exercise price
Options outstanding as beginning	R$ 9.14
Options granted	8.44	R$ 2.62	R$ 9.35	R$ 11.31	R$ 12.76	R$ 12.81	R$ 27.83	R$ 20.65	R$ 10.52
Options cancelled and adjustments in estimated prescribed rights	22.37
Options exercised	5.65
Options outstanding as ending	8.63	9.14
Number of options exercisable as ending	R$ 9.59	R$ 13.66

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11. Share-based payments (Details 2)	12 Months Ended
	Dec. 31, 2017 Segment R$ / shares	Dec. 31, 2016 Segment R$ / shares	Dec. 31, 2015 Segment R$ / shares	Dec. 31, 2014 Segment R$ / shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Total shares granted	7,556,404
Number of shares outstanding	5,297,191
Restricted Shares Plan [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Date of the Board Meeting	Aug. 08, 2017	Sep. 30, 2016	Apr. 30, 2015	Aug. 13, 2014
Total shares granted	1,538,213	4,007,081	1,207,037	804,073
Number of shares outstanding	5,297,191	4,609,256	875,923	0
Fair value of the share at grant date | R$ / shares	R$ 8.44	R$ 2.62	R$ 9.35	R$ 11.31

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11. Share-based payments (Details 3) - Segment	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of terms and conditions of share-based payment arrangement [line items]
Restricted shares granted	7,556,404
Restricted shares outstanding as ending	5,297,191
Restricted Shares Plan [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Restricted shares outstanding as beginning	4,609,256	875,923	0
Restricted shares granted	1,538,213	4,007,081	1,207,037	804,073
Restricted shares cancelled and adjustments in estimated expired rights	(235,097)
Restricted shares transferred	(615,181)
Restricted shares outstanding as ending	5,297,191	4,609,256	875,923	0

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11. Share-based payments (Details 4)	12 Months Ended
	Dec. 31, 2017 shares Segment R$ / shares	Dec. 31, 2016 Segment R$ / shares	Dec. 31, 2015 shares R$ / shares	Dec. 31, 2014 shares Segment R$ / shares	Dec. 31, 2013 shares Segment R$ / shares	Dec. 31, 2012 shares R$ / shares	Dec. 31, 2011 shares R$ / shares	Dec. 31, 2010 shares R$ / shares	Dec. 31, 2009 shares R$ / shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Total options granted | shares	17,495,238
Exercise price of the option (In Reais) | R$ / shares	R$ 8.63
Smiles S.A. ("Smiles") [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Total options granted | Segment	2,208,043
Number of options outstanding | Segment	253,053
Stock Option Plan [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Date of the Board meeting	Aug. 08, 2017	Sep. 30, 2016	Aug. 11, 2015	Aug. 12, 2014	May 13, 2013	Oct. 19, 2012	Dec. 20, 2010	Feb. 02, 2010	Feb. 04, 2009
Total options granted	947,767	5,742,732	1,930,844	653,130	802,296	778,912	2,722,444	2,774,640	1,142,473
Number of options outstanding | Segment	9,040,293	8,992,055
Exercise price of the option (In Reais) | R$ / shares	R$ 8.44	R$ 2.62	R$ 9.35	R$ 11.31	R$ 12.76	R$ 12.81	R$ 27.83	R$ 20.65	R$ 10.52
The fair value of the option at grant date (In Reais) | R$ / shares	R$ 7.91	R$ 1.24	R$ 3.37	R$ 7.98	R$ 6.54	R$ 5.32	R$ 16.07	R$ 16.81	R$ 8.53
Estimate volatility of share price	80.62%	98.20%	55.57%	52.66%	46.91%	52.25%	44.55%	77.95%	76.91%
Expected dividend yield	1.17%	6.59%	5.06%	3.27%	2.00%	2.26%	0.47%	2.73%	0.00%
Risk-free return rate	11.25%	14.25%	13.25%	11.00%	7.50%	9.00%	10.25%	8.65%	12.66%
Stock Option Plan [Member] | Smiles S.A. ("Smiles") [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Date of the Board meeting				Feb. 04, 2014	Aug. 08, 2013
Total options granted | Segment				1,150,000	1,058,043
Number of options outstanding | Segment	253,053	483,053		199,050	54,003
Exercise price of the option (In Reais) | R$ / shares				R$ 31.28	R$ 21.7
The fair value of the option at grant date (In Reais) | R$ / shares				R$ 4.90	R$ 4.25
Estimate volatility of share price				33.25%	36.35%
Expected dividend yield				10.67%	6.96%
Risk-free return rate				9.90%	7.40%
Average remaining maturity (in years)				6 years	5 years 6 months

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11. Share-based payments (Details 5)	12 Months Ended
	Dec. 31, 2017 Segment R$ / shares
Smiles S.A. ("Smiles") [Member]
Total of stock options
Options outstanding as ending	253,053
Stock Option Plan [Member]
Total of stock options
Options outstanding as beginning	8,992,055
Options exercised	(476,766)
Options outstanding as ending	9,040,293
Weighted average exercise price
Options outstanding as beginning | R$ / shares	R$ 9.14
Options exercised | R$ / shares	5.65
Options outstanding as ending | R$ / shares	R$ 8.63
Stock Option Plan [Member] | Smiles S.A. ("Smiles") [Member]
Total of stock options
Options outstanding as beginning	483,053
Options exercised	(230,000)
Options outstanding as ending	253,053
Weighted average exercise price
Options outstanding as beginning | R$ / shares	R$ 30.21
Options exercised | R$ / shares	16.45
Options outstanding as ending | R$ / shares	R$ 29.24

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12. Investments (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Relevant information of the Company's investees:
Total equity (deficit)	R$ (3,068,946)	R$ (3,356,751)	R$ (4,322,440)	R$ (332,974)
Net income (loss) for the year	378,209	1,102,364	(4,291,240)
Net income (loss) for the year attributable to the Company's interest (a)	R$ 87,097	R$ 881,329	R$ (4,501,109)
SCP Trip [Member]
Relevant information of the Company's investees:
Total number of shares	0	0
Capital stock	R$ 1,318	R$ 2,083
Interest	60.00%	60.00%
Total equity (deficit)	R$ 2,225	R$ 3,395
Goodwill on investment acquisition	0
Adjusted equity	1,333	2,038
Net income (loss) for the year	907	2,081
Net income (loss) for the year attributable to the Company's interest (a)	R$ 544	R$ 1,250
Netpoints Fidelidade S.A [Member]
Relevant information of the Company's investees:
Total number of shares	130,492,408	130,492,408
Capital stock	R$ 75,351	R$ 75,351
Interest	25.40%	25.40%
Total equity (deficit)	R$ (22,997)	R$ (14,991)
Goodwill on investment acquisition		15,184
Adjusted equity	0	0
Net income (loss) for the year	(9,344)	(29,050)
Net income (loss) for the year attributable to the Company's interest (a)	R$ 0	R$ (2,530)

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12. Investments (Details 1) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfInvestmentsLineItems [Line Items]
Balances as beginning	R$ 17,222	R$ 18,424
Equity results	544	(1,280)
Capital increase		3,439
Loss on capital increase		(1,368)
Write-off of Netpoints goodwill	(15,184)
Dividends	(1,249)	(1,993)
Balances as ending	1,333	17,222
SCP Trip [Member]
DisclosureOfInvestmentsLineItems [Line Items]
Balances as beginning	2,038	2,781
Equity results	544	1,250
Capital increase		0
Loss on capital increase		0
Write-off of Netpoints goodwill	0
Dividends	(1,249)	(1,993)
Balances as ending	1,333	2,038
Netpoints Fidelidade S.A [Member]
DisclosureOfInvestmentsLineItems [Line Items]
Balances as beginning	15,184	15,643
Equity results	0	(2,530)
Capital increase		3,439
Loss on capital increase		(1,368)
Write-off of Netpoints goodwill	(15,184)
Dividends	0	0
Balances as ending	R$ 0	R$ 15,184

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12. Investments (Details 2) R$ / shares in Units, R$ in Thousands	12 Months Ended
	Dec. 31, 2017 BRL (R$) R$ / shares shares
Investments Details 2
Shares sold | shares	1,250,000
Value per share | R$ / shares	R$ 61.05
Sale value	R$ 76,313
Investment value	(4,863)
Income taxes on gain on capital decrease (*)	(8,150)
Gain from capital decrease in investment in subsidiary	R$ 63,300

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12. Investments (Details Narrative)	12 Months Ended
	Dec. 31, 2017
Investments Details Narrative
Ownership of interest	25.40%

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13. Earnings (loss) per share (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator
Net income (loss) for the year attributable to equity holders of the parent	R$ 19,184	R$ 849,619	R$ (4,460,883)
Common Shares [Member]
Numerator
Net income (loss) for the year attributable to equity holders of the parent	R$ 7,869	R$ 353,129	R$ (2,123,945)
Denominator
Weighted average number of outstanding shares	4,981,350	5,035,037	5,035,037
Effects of dilution from stock options	0	0	0
Adjusted weighted average number of outstanding shares and diluted presumed conversions	4,981,350	5,035,037	5,035,037
Basic earnings (loss) per share (in dollars per share)	R$ 0.002	R$ 0.07	R$ (0.422)
Diluted earnings (loss) per share (in dollars per share)	R$ 0.002	R$ 0.07	R$ (0.422)
Preference Shares [Member]
Numerator
Net income (loss) for the year attributable to equity holders of the parent	R$ 11,315	R$ 496,490	R$ (2,336,938)
Denominator
Weighted average number of outstanding shares	204,664	202,261	158,285
Effects of dilution from stock options	2,614	347	0
Adjusted weighted average number of outstanding shares and diluted presumed conversions	207,278	202,608	158,285
Basic earnings (loss) per share (in dollars per share)	R$ 0.055	R$ 2.455	R$ (14.764)
Diluted earnings (loss) per share (in dollars per share)	R$ 0.055	R$ 2.45	R$ (14.764)

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14. Property, plant and equipment (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ 3,195,767	R$ 3,025,010	R$ 4,256,614
Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	5,496,726
Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (2,300,959)
Aircraft under finance lease [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	5.90%
Book Value	R$ 1,351,436	1,411,932	2,081,973
Aircraft under finance lease [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	2,000,866
Aircraft under finance lease [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (649,430)
Sets Of Replacement Parts And Spares Engines [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	7.20%
Book Value	R$ 850,477	804,974
Sets Of Replacement Parts And Spares Engines [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	1,345,161
Sets Of Replacement Parts And Spares Engines [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (494,684)
Aircraft Reconfigurations Overhauling [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	26.80%
Book Value	R$ 865,761	615,812
Aircraft Reconfigurations Overhauling [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	1,807,133
Aircraft Reconfigurations Overhauling [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (941,372)
Aircraft And Safety Equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	20.00%
Book Value	R$ 405	467
Aircraft And Safety Equipment [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	843
Aircraft And Safety Equipment [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (438)
Tools [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	10.00%
Book Value	R$ 18,075	14,617
Tools [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	36,199
Tools [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (18,124)
Vehicles [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	20.00%
Book Value	R$ 1,448	1,660
Vehicles [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	10,548
Vehicles [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (9,100)
Machinery And Equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	10.00%
Book Value	R$ 20,042	22,343
Machinery And Equipment [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	57,834
Machinery And Equipment [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (37,792)
Furniture And Fixtures [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	10.00%
Book Value	R$ 11,509	10,061
Furniture And Fixtures [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	28,148
Furniture And Fixtures [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (16,639)
Computers And Peripherals [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	20.00%
Book Value	R$ 8,994	7,401
Computers And Peripherals [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	39,458
Computers And Peripherals [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (30,464)
Communication Equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	10.00%
Book Value	R$ 703	823
Communication Equipment [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	2,617
Communication Equipment [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (1,914)
Facilities [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	10.00%
Book Value	R$ 312	332
Facilities [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	1,534
Facilities [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (1,222)
Maintenance Center - Confins [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	10.00%
Book Value	R$ 26,918	38,096
Maintenance Center - Confins [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	107,127
Maintenance Center - Confins [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ (80,209)
Leasehold Improvements [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Average annual depreciation rate, percentage	18.50%
Book Value	R$ 13,540	8,248
Leasehold Improvements [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	33,111
Leasehold Improvements [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	(19,571)
Flight Equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	3,086,154	2,847,802
Flight Equipment [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	5,190,202
Flight Equipment [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	(2,104,048)
Construction in Progress [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	33,503	31,571
Construction in Progress [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	33,503
Construction in Progress [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	0
Property, Plant And Equipment In Use [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	116,969	120,535
Property, Plant And Equipment In Use [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	313,880
Property, Plant And Equipment In Use [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	(196,911)
Advances For Acquisition Of Property, Plant And Equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	18,720	R$ 87,399	R$ 623,843
Advances For Acquisition Of Property, Plant And Equipment [Member] | Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	18,720
Advances For Acquisition Of Property, Plant And Equipment [Member] | Accumulated depreciation [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Book Value	R$ 0

XML

14. Property, plant and equipment (Details 1) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Balance at beginning	R$ 3,025,010	R$ 4,256,614
Additions	1,121,497	524,121
Disposals	(483,533)	(1,337,481)
Depreciation	(467,207)	(418,244)
Balance at end	3,195,767	3,025,010
Aircraft under finance lease [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance at beginning	1,411,932	2,081,973
Additions	0	0
Disposals	(5,639)	(597,136)
Depreciation	(54,857)	(72,905)
Balance at end	1,351,436	1,411,932
Other Flight Equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance at beginning	1,405,144	1,419,596
Additions	827,658	425,218
Disposals	(135,381)	(122,487)
Depreciation	(388,779)	(317,183)
Balance at end	1,708,642	1,405,144
Advances For Acquisition Of Property, Plant And Equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance at beginning	87,399	623,843
Additions	263,328	71,503
Disposals	(332,007)	(607,947)
Depreciation	0	0
Balance at end	18,720	87,399
Other [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance at beginning	120,535	131,202
Additions	30,511	27,400
Disposals	(10,506)	(9,911)
Depreciation	(23,571)	(28,156)
Balance at end	R$ 116,969	R$ 120,535

XML

15. Intangible assets (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about intangible assets [line items]
Balances as Beginning	R$ 1,739,716	R$ 1,714,605
Additions	55,449	55,316
Disposals	(9,662)	(781)
Amortization	(38,218)	(29,424)
Balance as Ending	1,747,285	1,739,716
Goodwill [Member]
Disclosure of detailed information about intangible assets [line items]
Balances as Beginning	542,302	542,302
Additions	0	0
Disposals	0	0
Amortization	0	0
Balance as Ending	542,302	542,302
Airport Operating Rights [Member]
Disclosure of detailed information about intangible assets [line items]
Balances as Beginning	1,038,900	1,038,900
Additions	0	0
Disposals	0	0
Amortization	0	0
Balance as Ending	1,038,900	1,038,900
Software [Member]
Disclosure of detailed information about intangible assets [line items]
Balances as Beginning	158,514	133,403
Additions	55,449	55,316
Disposals	(9,662)	(781)
Amortization	(38,218)	(29,424)
Balance as Ending	R$ 166,083	R$ 158,514

XML

15. Intangible assets (Details 1) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about intangible assets [line items]
Book value	R$ 1,038,900	R$ 1,038,900
Book value - CGU	1,038,900	1,038,900
Value in use	R$ 5,069,156	R$ 4,816,306
Pre-tax discount rate	14.50%	27.34%
Perpetuity growth rate	3.50%	8.50%
Gol Linhas Aereas S.A. ("GLA") [Member] | Goodwill [Member]
Disclosure of detailed information about intangible assets [line items]
Book value	R$ 325,381	R$ 325,381
Book value - CGU	1,061,177	2,433,861
Value in use	R$ 15,206,092	R$ 3,636,201
Pre-tax discount rate	15.46%	23.92%
Perpetuity growth rate	3.50%	3.50%
Smiles S.A. ("Smiles") [Member] | Goodwill [Member]
Disclosure of detailed information about intangible assets [line items]
Book value	R$ 216,921	R$ 216,921
Book value - CGU	395,105	56,880
Value in use	R$ 5,464,287	R$ 9,476,173
Pre-tax discount rate	19.26%	14.51%
Perpetuity growth rate	3.50%	3.50%

XML

16. Short and long-term debt (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfDebtLineItems [Line Items]
Interest accrued	R$ 874,678	R$ 568,396
Finance leases	288,194	266,894
Total short-term debt	1,162,872	835,290
Long-term debt before lease	4,754,838	4,092,812
Finance leases	1,187,957	1,451,118
Total long-term debt	5,942,795	5,543,930
Total debt	R$ 7,105,667	6,379,220
Finimp [Member]
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	1/5/2018
Term Loan [Member]
DisclosureOfDebtLineItems [Line Items]
Total debt	R$ 989,572
Local Currency Short-term Borrowings [Member]
DisclosureOfDebtLineItems [Line Items]
Interest accrued	R$ 23,921	45,026
Local Currency Short-term Borrowings [Member] | Safra [Member]
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	May-18
Interest rate	128% of DI
Interest accrued	R$ 0	9,690
Local Currency Short-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Sep. 2019
Interest rate	132% of DI
Interest accrued	R$ 395,093	0
Foregin Currency Short-term Borrowings [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Interest accrued	R$ 74,989	97,670
Foregin Currency Short-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Aug. 2019
Interest rate	1.32% p.a.
Interest accrued	R$ 43,909	42,275
Foregin Currency Short-term Borrowings [Member] | Finimp [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Dec. 2018
Interest rate	5.75% p.a.
Interest accrued	R$ 240,973	174,428
Foregin Currency Short-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Jun. 2021
Interest rate	Libor 3m+2.25% p.a.
Interest accrued	R$ 17,145	16,889
Foregin Currency Short-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Apr. 2019
Interest rate	Libor 3m+0.75% p.a.
Interest accrued	R$ 47,507	0
Foregin Currency Short-term Borrowings [Member] | Senior Notes I [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Apr. 2017
Interest rate	7.60% p.a.
Interest accrued	R$ 0	182,418
Foregin Currency Short-term Borrowings [Member] | Senior Notes V [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Dec. 2018
Interest rate	9.71% p.a.
Interest accrued	R$ 23,258	0
Foregin Currency Short-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Aug. 2026
Interest rate	5.70% p.a.
Interest accrued	R$ 7,883	0
Local Long-term Borrowings [Member] | Safra [Member]
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	May. 2018
Interest rate	128% of DI
Interest accrued	R$ 0	4,871
Local Long-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Sep. 2019
Interest rate	132% of DI
Interest accrued	R$ 617,333	1,005,242
Long-term debt before lease	617,333
Foreign Long-term Borrowings [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Long-term debt before lease	R$ 4,754,838
Foreign Long-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Aug. 2019
Interest rate	Libor 3m+0.75% p.a.
Interest accrued	R$ 12,451	11,142
Long-term debt before lease	R$ 12,451
Foreign Long-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Jun. 2021
Interest rate	Libor 3m+2.25% p.a.
Interest accrued	R$ 142,137	156,917
Long-term debt before lease	R$ 142,137
Foreign Long-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Apr. 2019
Interest rate	Libor 3m+0.75% p.a.
Interest accrued	R$ 35,634	0
Long-term debt before lease	R$ 35,634
Foreign Long-term Borrowings [Member] | Senior Notes V [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Dec. 2018
Interest rate	9.71% p.a.
Interest accrued	R$ 0	43,010
Foreign Long-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Aug. 2026
Interest rate	5.70% p.a.
Interest accrued	R$ 78,239	0
Long-term debt before lease	R$ 78,239
Foreign Long-term Borrowings [Member] | Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Jul. 2020
Interest rate	9.64% p.a.
Interest accrued	R$ 314,589	368,000
Long-term debt before lease	R$ 314,589
Foreign Long-term Borrowings [Member] | Senior Notes III [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Feb. 2023
Interest rate	11.30% p.a.
Interest accrued	R$ 69,074	68,053
Long-term debt before lease	R$ 69,074
Foreign Long-term Borrowings [Member] | Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Jan. 2022
Interest rate	9.24% p.a.
Interest accrued	R$ 299,524	889,595
Long-term debt before lease	R$ 299,524
Foreign Long-term Borrowings [Member] | Senior Notes VI [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Jul. 2021
Interest rate	9.87% p.a.
Interest accrued	R$ 127,181	120,631
Long-term debt before lease	R$ 127,181
Foreign Long-term Borrowings [Member] | Senior Notes VII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Dec. 2028
Interest rate	9.84% p.a.
Interest accrued	R$ 54,752	52,721
Long-term debt before lease	R$ 54,752
Foreign Long-term Borrowings [Member] | Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Jan. 2025
Interest rate	7.19% p.a.
Interest accrued	R$ 1,597,713	0
Long-term debt before lease	R$ 1,597,713
Foreign Long-term Borrowings [Member] | Perpetual Notes [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	-
Interest rate	8.75% p.a.
Interest accrued	R$ 438,201	428,436
Long-term debt before lease	R$ 438,201
Foreign Long-term Borrowings [Member] | Term Loan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Maturity of the contract	Aug. 2020
Interest rate	6.70% p.a.
Interest accrued	R$ 968,010	R$ 944,194
Long-term debt before lease	R$ 968,010

XML

16. Short and long-term debt (Details 1) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfDebtLineItems [Line Items]
Total	R$ 4,754,838	R$ 4,092,812
Local Long-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Total	617,333
Foreign Long-term Borrowings [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	4,754,838
Foreign Long-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	12,451
Foreign Long-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	142,137
Foreign Long-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	35,634
Foreign Long-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	78,239
Foreign Long-term Borrowings [Member] | Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	314,589
Foreign Long-term Borrowings [Member] | Senior Notes III [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	69,074
Foreign Long-term Borrowings [Member] | Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	299,524
Foreign Long-term Borrowings [Member] | Senior Notes VI [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	127,181
Foreign Long-term Borrowings [Member] | Senior Notes VII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	54,752
Foreign Long-term Borrowings [Member] | Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	1,597,713
Foreign Long-term Borrowings [Member] | Perpetual Notes [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	438,201
Foreign Long-term Borrowings [Member] | Term Loan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	968,010
2019 | USD
DisclosureOfDebtLineItems [Line Items]
Total	690,947
2019 | Local Long-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Total	617,333
2019 | Foreign Long-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	12,451
2019 | Foreign Long-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	17,177
2019 | Foreign Long-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	35,634
2019 | Foreign Long-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	8,352
2019 | Foreign Long-term Borrowings [Member] | Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2019 | Foreign Long-term Borrowings [Member] | Senior Notes III [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2019 | Foreign Long-term Borrowings [Member] | Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2019 | Foreign Long-term Borrowings [Member] | Senior Notes VI [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2019 | Foreign Long-term Borrowings [Member] | Senior Notes VII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2019 | Foreign Long-term Borrowings [Member] | Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2019 | Foreign Long-term Borrowings [Member] | Perpetual Notes [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2019 | Foreign Long-term Borrowings [Member] | Term Loan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | USD
DisclosureOfDebtLineItems [Line Items]
Total	1,308,614
2020 | Local Long-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	17,177
2020 | Foreign Long-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	8,838
2020 | Foreign Long-term Borrowings [Member] | Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	314,589
2020 | Foreign Long-term Borrowings [Member] | Senior Notes III [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | Senior Notes VI [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | Senior Notes VII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | Perpetual Notes [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2020 | Foreign Long-term Borrowings [Member] | Term Loan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	968,010
2021 | USD
DisclosureOfDebtLineItems [Line Items]
Total	244,339
2021 | Local Long-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	107,783
2021 | Foreign Long-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	9,375
2021 | Foreign Long-term Borrowings [Member] | Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | Senior Notes III [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | Senior Notes VI [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	127,181
2021 | Foreign Long-term Borrowings [Member] | Senior Notes VII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | Perpetual Notes [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2021 | Foreign Long-term Borrowings [Member] | Term Loan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | USD
DisclosureOfDebtLineItems [Line Items]
Total	309,457
2022 | Local Long-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	9,933
2022 | Foreign Long-term Borrowings [Member] | Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | Senior Notes III [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	299,524
2022 | Foreign Long-term Borrowings [Member] | Senior Notes VI [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | Senior Notes VII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | Perpetual Notes [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
2022 | Foreign Long-term Borrowings [Member] | Term Loan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | USD
DisclosureOfDebtLineItems [Line Items]
Total	1,763,280
Thereafter | Local Long-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | Foreign Long-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | Foreign Long-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | Foreign Long-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | Foreign Long-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	41,741
Thereafter | Foreign Long-term Borrowings [Member] | Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | Foreign Long-term Borrowings [Member] | Senior Notes III [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	69,074
Thereafter | Foreign Long-term Borrowings [Member] | Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | Foreign Long-term Borrowings [Member] | Senior Notes VI [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | Foreign Long-term Borrowings [Member] | Senior Notes VII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	54,752
Thereafter | Foreign Long-term Borrowings [Member] | Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	1,597,713
Thereafter | Foreign Long-term Borrowings [Member] | Perpetual Notes [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Thereafter | Foreign Long-term Borrowings [Member] | Term Loan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | USD
DisclosureOfDebtLineItems [Line Items]
Total	438,201
Without maturity date | Local Long-term Borrowings [Member] | Debentures VI [Member]
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | J. P. Morgan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | Engine Facility (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | ExIm (Cacib) [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | PK Finance [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | Senior Notes III [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | Senior Notes VI [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | Senior Notes VII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	0
Without maturity date | Foreign Long-term Borrowings [Member] | Perpetual Notes [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	438,201
Without maturity date | Foreign Long-term Borrowings [Member] | Term Loan [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Total	R$ 0

XML

16. Short and long-term debt (Details 2) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfDebtLineItems [Line Items]
Book value	R$ 7,105,667	R$ 6,379,220
Senior Notes and Perpetual Notes [Member]
DisclosureOfDebtLineItems [Line Items]
Book value	2,974,501
Fair value	2,955,391
Debentures [Member]
DisclosureOfDebtLineItems [Line Items]
Book value	1,036,348
Fair value	1,072,232
Term Loan [Member]
DisclosureOfDebtLineItems [Line Items]
Book value	989,572
Fair value	1,013,929
Other [Member]
DisclosureOfDebtLineItems [Line Items]
Book value	629,095
Fair value	724,788
Total [Member]
DisclosureOfDebtLineItems [Line Items]
Book value	5,629,516
Fair value	R$ 5,766,340

XML

16. Short and long-term debt (Details 3) - Finimp [Member] R$ in Thousands	12 Months Ended
	Dec. 31, 2017 BRL (R$)
DisclosureOfDebtLineItems [Line Items]
Recognition and issuance date	1/13/2017
Bank	Banco do Brasil
Principal amount	R$ 16,803
Interest rate (p.a.)	6.13%
Maturity date	1/5/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 5,245
Recognition and issuance date	2/1/2017
Bank	Banco do Brasil
Principal amount	R$ 27,057
Interest rate (p.a.)	6.15%
Maturity date	1/28/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 8,595
Recognition and issuance date	2/10/2017
Bank	Banco do Brasil
Principal amount	R$ 15,001
Interest rate (p.a.)	6.14%
Maturity date	2/5/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 4,815
Recognition and issuance date	4/20/2017
Bank	Banco do Brasil
Principal amount	R$ 13,442
Interest rate (p.a.)	6.20%
Maturity date	4/16/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 4,274
Recognition and issuance date	5/31/2017
Bank	Banco Safra
Principal amount	R$ 17,540
Interest rate (p.a.)	4.85%
Maturity date	5/29/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 5,407
Recognition and issuance date	6/26/2017
Bank	Banco do Brasil
Principal amount	R$ 31,929
Interest rate (p.a.)	5.95%
Maturity date	6/21/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 9,638
Recognition and issuance date	6/26/2017
Bank	Banco Safra
Principal amount	R$ 15,142
Interest rate (p.a.)	5.17%
Maturity date	6/21/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 4,571
Recognition and issuance date	6/30/2017
Bank	Banco do Brasil
Principal amount	R$ 34,526
Interest rate (p.a.)	5.85%
Maturity date	6/28/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 10,436
Recognition and issuance date	6/30/2017
Bank	Banco do Brasil
Principal amount	R$ 25,879
Interest rate (p.a.)	5.85%
Maturity date	6/28/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 7,823
Recognition and issuance date	10/30/2017
Bank	Banco do Brasil
Principal amount	R$ 8,768
Interest rate (p.a.)	5.53%
Maturity date	1/12/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 2,693
Recognition and issuance date	12/4/2017
Bank	Banco Safra
Principal amount	R$ 30,383
Interest rate (p.a.)	5.11%
Maturity date	11/29/2018
USD
DisclosureOfDebtLineItems [Line Items]
Principal amount	R$ 9,347

XML

16. Short and long-term debt (Details 4) R$ in Thousands	12 Months Ended
	Dec. 31, 2017 BRL (R$)
DisclosureOfDebtLineItems [Line Items]
Previous balance	R$ 1,331,982
Payments	(707,141)
New issues	1,596,828
Closing balance	2,221,669
Premium paid	(41,327)
USD
DisclosureOfDebtLineItems [Line Items]
Previous balance	408,383
Payments	(213,767)
New issues	482,717
Closing balance	677,333
Premium paid	R$ (12,493)
Senior Notes II [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Type	Tender offer
Transaction Date	12/29/2017
Previous balance	R$ 116,968
Payments	(21,191)
New issues	0
Closing balance	95,777
Premium paid	R$ (422)
Senior Notes IV [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Type	Tender offer
Transaction Date	12/11/2017
Previous balance	R$ 276,730
Payments	(185,197)
New issues	0
Closing balance	91,533
Premium paid	R$ (12,071)
Senior Notes V [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Type	Prepayment
Transaction Date	12/19/2017
Previous balance	R$ 14,685
Payments	(7,379)
New issues	0
Closing balance	7,306
Premium paid	R$ 0
Senior Notes VIII [Member] | USD
DisclosureOfDebtLineItems [Line Items]
Type	Issuance
Transaction Date	12/11/2017
Previous balance	R$ 0
Payments	0
New issues	482,717
Closing balance	482,717
Premium paid	R$ 0

XML

16. Short and long-term debt (Details 5) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfDebtLineItems [Line Items]
Total minimum lease payments	R$ 1,591,397	R$ 1,889,659
Less total interest	(115,246)	(171,647)
Present value of minimum lease payments	1,476,151	1,718,012
Less current portion	(288,194)	(266,894)
Noncurrent portion	1,187,957	1,451,118
2017
DisclosureOfDebtLineItems [Line Items]
Total minimum lease payments	0	350,883
2018
DisclosureOfDebtLineItems [Line Items]
Total minimum lease payments	333,795	328,931
2019
DisclosureOfDebtLineItems [Line Items]
Total minimum lease payments	319,511	307,027
2020
DisclosureOfDebtLineItems [Line Items]
Total minimum lease payments	267,477	267,885
2021
DisclosureOfDebtLineItems [Line Items]
Total minimum lease payments	224,591	227,204
2022
DisclosureOfDebtLineItems [Line Items]
Total minimum lease payments	119,200	115,367
Thereafter
DisclosureOfDebtLineItems [Line Items]
Total minimum lease payments	R$ 326,823	R$ 292,362

XML

16. Short and long-term debt (Details Narrative) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Short And Long-term Debt Details Narrative
Total debt issuance costs	R$ 101,795	R$ 97,433
Long term debt restrictive covenants	4,316,637	3,664,376
Withdrawals under lease agreements	R$ 255,644	R$ 217,065

XML

18. Taxes payable (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Taxes Payable Details
PIS and COFINS	R$ 40,036	R$ 89,332
ICMS installments	0	4,852
Tax regularization program in installment payments - PRT and PERT	68,596	0
Withholding income tax on salaries	32,070	29,519
ICMS	45,492	43,226
Tax on import	3,454	3,454
IRPJ and CSLL payable	5,299	12,489
Other	6,200	6,105
Total	201,147	188,977
Current	134,951	146,174
Noncurrent	R$ 66,196	R$ 42,803

XML

18. Taxes payable (Details 1) R$ in Thousands	Dec. 31, 2017 BRL (R$)
Taxes Payable Details 1
IPI on customs import	R$ 92,153
PIS and COFINS	98,491
PIS and COFINS on financial income	131,844
Income and social contribution taxes	23,372
Other	4,655
Total debt	350,515
Reductions in interest and fines	(21,249)
Use of tax losses carryforward	(227,689)
Amount payable in installments	R$ 101,577

XML

19. Advance ticket sales (Details Narrative) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Advance Ticket Sales Details Narrative
Advance ticket sales	R$ 1,456,939	R$ 1,185,945
Unused tickets sales	R$ 4,964,925	R$ 4,447,824
Average period	48 days	46 days

XML

20. Mileage program (Details Narrative) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Mileage Program Details Narrative
Mileage program, Current	R$ 765,114	R$ 781,707
Mileage program, Noncurrent	R$ 188,204	R$ 219,325

XML

21. Provisions (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of changes in other provisions
Balances on Beginning	R$ 205,532	R$ 870,273
Additional provisions recognized	197,081	290,904
Utilized provisions	(376,081)	(253,643)
Foreign exchange variation, net	(2,026)	(117,319)
Balances on Ending	207,597	205,532
Current			R$ 46,561	R$ 66,502
Noncurrent			562,628	723,713
Total	207,597	205,532	207,597	205,532
Insurance Provision [Member]
Reconciliation of changes in other provisions
Balances on Beginning	742	742
Additional provisions recognized	(1)	4,237
Utilized provisions	0	(4,237)
Foreign exchange variation, net	0	0
Balances on Ending	741	742
Current			741	742
Noncurrent			0	0
Total	742	742	741	742
Provision For Aircraft & Engine Return [Member]
Reconciliation of changes in other provisions
Balances on Beginning	583,941	725,176
Additional provisions recognized	38,819	97,423
Utilized provisions	(220,082)	(121,855)
Foreign exchange variation, net	(1,827)	(116,803)
Balances on Ending	400,851	583,941
Current			45,820	65,760
Noncurrent			355,031	518,181
Total	583,941	583,941	400,851	583,941
Provision For Legal Proceedings [Member]
Reconciliation of changes in other provisions
Balances on Beginning	205,532	144,355
Additional provisions recognized	158,263	189,244
Utilized provisions	(155,999)	(127,551)
Foreign exchange variation, net	(199)	(516)
Balances on Ending	207,597	205,532
Current			0	0
Noncurrent			205,532	207,597
Total	R$ 205,532	R$ 205,532	R$ 207,597	R$ 205,532

XML

21. Provisions (Details 1) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfProvisionsLineItems [Line Items]
Other Provisions	R$ 207,597	R$ 205,532	R$ 870,273
Civil Lawsuits [Member]
DisclosureOfProvisionsLineItems [Line Items]
Other Provisions	67,528	73,356
Labor Lawsuits [Member]
DisclosureOfProvisionsLineItems [Line Items]
Other Provisions	137,071	132,163
Taxes [Member]
DisclosureOfProvisionsLineItems [Line Items]
Other Provisions	R$ 2,998	R$ 13

XML

21. Provisions (Details Narrative) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfProvisionsLineItems [Line Items]
Goodwill	R$ 1,038,900	R$ 1,038,900

XML

22. Equity (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	100.00%	100.00%
Treasury Shares [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.08%	0.26%
Fundo Volluto [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	61.19%	61.28%
Delta Air Lines Inc. [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	9.47%	9.48%
Airfrance - KLM [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	1.22%	1.22%
Other [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.71%	0.65%
Free Float [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	27.33%	27.11%
Common Shares [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	100.00%	100.00%
Common Shares [Member] | Treasury Shares [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.00%	0.00%
Common Shares [Member] | Fundo Volluto [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	100.00%	100.00%
Common Shares [Member] | Delta Air Lines Inc. [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.00%	0.00%
Common Shares [Member] | Airfrance - KLM [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.00%	0.00%
Common Shares [Member] | Other [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.00%	0.00%
Common Shares [Member] | Free Float [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.00%	0.00%
Preference Shares [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	100.00%	100.00%
Preference Shares [Member] | Treasury Shares [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.10%	0.44%
Preference Shares [Member] | Fundo Volluto [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	49.25%	33.88%
Preference Shares [Member] | Delta Air Lines Inc. [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	12.38%	16.19%
Preference Shares [Member] | Airfrance - KLM [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	1.60%	2.09%
Preference Shares [Member] | Other [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	0.93%	1.11%
Preference Shares [Member] | Free Float [Member]
DisclosureOfEquityLineItems [Line Items]
Percentage of shares held	35.74%	46.29%

XML

22. Equity (Details Narrative) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfEquityLineItems [Line Items]
Capital stock	R$ 3,082,802	R$ 3,080,110
Number of shares issued	3,129,582,142
Authorized capital stock	R$ 4,000,000
Common Shares [Member]
DisclosureOfEquityLineItems [Line Items]
Number of shares issued	2,863,682,710
Preference Shares [Member]
DisclosureOfEquityLineItems [Line Items]
Number of shares issued	265,899,432

XML

23. Revenue (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue Details
Passenger transportation	R$ 9,479,242	R$ 8,948,179	R$ 8,954,034
Cargo	354,561	324,492	318,573
Miles revenue	800,976	622,567	421,348
Other revenue	657,609	652,602	690,044
Gross revenue	11,292,388	10,547,831	10,383,999
Related tax	(716,366)	(680,496)	(605,992)
Net revenue	R$ 10,576,022	R$ 9,867,335	R$ 9,778,007

XML

23. Revenue (Details 1) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfRevenueLineItems [Line Items]
Ravenue ratio	100.00%	100.00%	100.00%
Net revenue	R$ 10,576,022	R$ 9,867,335	R$ 9,778,007
Domestic [Member]
DisclosureOfRevenueLineItems [Line Items]
Ravenue ratio	85.50%	85.10%	88.70%
Net revenue	R$ 9,044,990	R$ 8,670,023	R$ 8,670,023
International [Member]
DisclosureOfRevenueLineItems [Line Items]
Ravenue ratio	14.50%	14.90%	11.30%
Net revenue	R$ 1,531,032	R$ 1,471,971	R$ 1,107,984

XML

23. Revenue (Details Narrative) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue Details Narrative
Revenues from unused passenger tickets, reissued tickets and cancellation of flight tickets	R$ 433,639	R$ 430,898	R$ 449,263

XML

24. Financial results (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Financial income
Income from derivatives	R$ 35,053	R$ 120,403	R$ 174,693
Income from short-term investments	119,863	152,656	178,147
Monetary variation	14,208	12,411	14,531
Taxes on financial income	(24,393)	(23,041)	(47,588)
Gains from the exchange offer	0	286,799	0
Interest income	18,245	4,651	8,539
Other	50,470	14,625	4,245
Finance income	213,446	568,504	332,567
Financial expenses
Losses from derivatives	(40,770)	(277,183)	(124,536)
Interest on short and long-term debt	(727,285)	(787,661)	(885,947)
Bank charges and expenses	(61,711)	(96,515)	(60,760)
Monetary variation	(2,993)	(3,867)	(3,921)
Tender offer costs (b)	(53,041)	0	0
Other	(164,661)	(106,338)	(253,727)
Financial expenses	(1,050,461)	(1,271,564)	(1,328,891)
Exchange rate variation, net	(81,744)	1,367,937	(2,266,999)
Total financial results	R$ (918,759)	R$ 664,877	R$ (3,263,323)

XML

25. Segments (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets
Current	R$ 3,344,998	R$ 2,080,714
Noncurrent	6,659,750	6,323,641
Total assets	10,004,748	8,404,355
Liabilities
Current	5,750,045	4,848,742
Noncurrent	7,323,649	6,912,364
Total equity (deficit)	(3,068,946)	(3,356,751)	R$ (4,322,440)	R$ (332,974)
Total liabilities and equity	10,004,748	8,404,355
Flight transportation [Member]
Assets
Current	2,389,146	1,426,750
Noncurrent	6,769,399	6,474,404
Total assets	9,158,545	7,901,154
Liabilities
Current	5,508,427	4,767,322
Noncurrent	7,131,078	6,782,835
Total equity (deficit)	(3,480,960)	(3,649,003)
Total liabilities and equity	9,158,545	7,901,154
Smiles loyalty program [Member]
Assets
Current	1,901,672	1,413,422
Noncurrent	269,239	513,456
Total assets	2,170,911	1,926,878
Liabilities
Current	1,096,357	1,061,806
Noncurrent	202,835	229,725
Total equity (deficit)	871,719	635,347
Total liabilities and equity	2,170,911	1,926,878
Combined information [Member]
Assets
Current	4,290,818	2,840,172
Noncurrent	7,038,638	6,987,860
Total assets	11,329,456	9,828,032
Liabilities
Current	6,604,784	5,829,128
Noncurrent	7,333,913	7,012,560
Total equity (deficit)	(2,609,241)	(3,013,656)
Total liabilities and equity	11,329,456	9,828,032
Eliminations [Member]
Assets
Current	(945,820)	(759,458)
Noncurrent	(378,888)	(664,219)
Total assets	(1,324,708)	(1,423,677)
Liabilities
Current	(854,739)	(980,386)
Noncurrent	(10,264)	(100,196)
Total equity (deficit)	(459,705)	(343,095)
Total liabilities and equity	R$ (1,324,708)	R$ (1,423,677)

XML

25. Segments (Details 1) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net Revenue
Passenger	R$ 9,185,805	R$ 8,671,442	R$ 8,583,388
Cargo and other	1,390,217	1,195,893	1,194,619
Total net revenue	10,576,022	9,867,335	9,778,007
Operating costs and expenses
Salaries	(1,708,111)	(1,656,785)	(1,580,531)
Aircraft fuel	(2,887,737)	(2,695,390)	(3,301,368)
Aircraft rent	(939,744)	(996,945)	(1,100,086)
Sales and marketing	(590,814)	(555,984)	(617,403)
Landing fees	(664,170)	(687,366)	(681,378)
Aircraft, traffic and mileage servicing	(874,736)	(753,497)	(678,075)
Maintenance, materials and repairs	(368,719)	(593,090)	(603,925)
Depreciation and amortization	(505,425)	(447,668)	(419,691)
Passenger service expenses	(437,045)	(461,837)	(481,765)
Other operating expenses	(610,310)	(320,948)	(493,621)
Total operating income (expenses)	(9,586,811)	(9,169,510)	(9,957,843)
Equity results	544	(1,280)	(3,941)
Operating result before financial result, net and income taxes	989,755	696,545	(183,777)
Financial income	213,446	568,504	332,567
Financial expenses	1,050,461	1,271,564	1,328,891
Exchange rate variation, net	(81,744)	1,367,937	(2,266,999)
Total financial results	(918,759)	664,877	(3,263,323)
Income (loss) before income taxes	70,996	1,361,422	(3,447,100)
Income taxes	307,213	(259,058)	(844,140)
Net income for the year	378,209	1,102,364	(4,291,240)
Attributable to equity holders of the parent	19,184	849,619	(4,460,883)
Attributable to non-controlling interests from Smiles	359,025	252,745	169,643
Flight transportation [Member]
Net Revenue
Passenger	8,785,938	8,340,545	8,294,463
Cargo and other	768,566	729,096	941,928
Mileage revenue	0	0	0
Total net revenue	9,554,504	9,069,641	9,236,391
Operating costs and expenses
Salaries	(1,654,388)	(1,615,740)	(1,544,157)
Aircraft fuel	(2,887,737)	(2,695,390)	(3,301,368)
Aircraft rent	(939,744)	(996,945)	(1,100,086)
Sales and marketing	(518,025)	(494,076)	(566,329)
Landing fees	(664,170)	(687,366)	(681,378)
Aircraft, traffic and mileage servicing	(649,126)	(660,009)	(615,792)
Maintenance, materials and repairs	(368,719)	(593,090)	(603,925)
Depreciation and amortization	(491,806)	(439,173)	(416,856)
Passenger service expenses	(437,045)	(461,837)	(481,765)
Other operating expenses	(591,087)	(316,766)	(485,738)
Total operating income (expenses)	(9,201,847)	(8,960,392)	(9,797,394)
Equity results	395,245	287,134	179,377
Operating result before financial result, net and income taxes	747,902	396,383	381,626
Financial income	184,448	395,901	287,058
Financial expenses	(1,225,315)	(1,311,940)	1,424,321
Exchange rate variation, net	(78,462)	1,362,145	2,264,750
Total financial results	(1,119,329)	446,106	3,402,013
Income (loss) before income taxes	(371,427)	842,489	(3,783,639)
Income taxes	390,611	7,130	(677,244)
Net income for the year	19,184	849,619	(4,460,883)
Attributable to equity holders of the parent	19,184	849,619	(4,460,883)
Attributable to non-controlling interests from Smiles	0	0	0
Smiles loyalty program [Member]
Net Revenue
Passenger	0	0	0
Cargo and other	0	0	47,199
Mileage revenue	1,804,129	1,548,109	1,172,322
Total net revenue	1,804,129	1,548,109	1,219,521
Operating costs and expenses
Salaries	(53,723)	(41,045)	(36,374)
Aircraft fuel	0	0	0
Aircraft rent	0	0	0
Sales and marketing	(69,917)	(61,908)	(51,074)
Landing fees	0	0	0
Aircraft, traffic and mileage servicing	(990,685)	(828,887)	(700,200)
Maintenance, materials and repairs	0	0	0
Depreciation and amortization	(13,619)	(8,495)	(2,835)
Passenger service expenses	0	0	0
Other operating expenses	(26,385)	(4,197)	(13,183)
Total operating income (expenses)	(1,154,329)	(944,532)	(803,666)
Equity results	0	2,530	(5,932)
Operating result before financial result, net and income taxes	649,800	601,047	409,923
Financial income	205,431	212,758	156,042
Financial expenses	(2,201)	(168)	15,104
Exchange rate variation, net	(3,284)	5,792	2,248
Total financial results	199,946	218,382	138,690
Income (loss) before income taxes	849,746	819,429	548,613
Income taxes	(89,131)	(271,156)	178,691
Net income for the year	760,615	548,273	369,922
Attributable to equity holders of the parent	401,590	295,528	200,279
Attributable to non-controlling interests from Smiles	359,025	252,745	169,643
Combined information [Member]
Net Revenue
Passenger	8,785,938	8,340,545	8,294,463
Cargo and other	768,566	729,096	989,127
Mileage revenue	1,804,129	1,548,109	1,172,322
Total net revenue	11,358,633	10,617,750	10,455,912
Operating costs and expenses
Salaries	(1,708,111)	(1,656,785)	(1,580,531)
Aircraft fuel	(2,887,737)	(2,695,390)	(3,301,368)
Aircraft rent	(939,744)	(996,945)	(1,100,086)
Sales and marketing	(587,942)	(555,984)	(617,403)
Landing fees	(664,170)	(687,366)	(681,378)
Aircraft, traffic and mileage servicing	(1,639,811)	(1,488,896)	(1,315,992)
Maintenance, materials and repairs	(368,719)	(593,090)	(603,925)
Depreciation and amortization	(505,425)	(447,668)	(419,691)
Passenger service expenses	(437,045)	(461,837)	(481,765)
Other operating expenses	(617,472)	(320,963)	(498,921)
Total operating income (expenses)	(10,356,176)	(9,904,924)	(10,601,060)
Equity results	395,245	284,604	173,445
Operating result before financial result, net and income taxes	1,397,702	997,430	28,297
Financial income	389,879	608,659	443,100
Financial expenses	(1,227,516)	(1,312,108)	1,439,425
Exchange rate variation, net	(81,746)	1,367,937	2,266,998
Total financial results	(919,383)	664,488	3,263,323
Income (loss) before income taxes	478,319	1,661,918	3,235,026
Income taxes	301,480	264,026	(855,935)
Net income for the year	779,799	1,397,892	(4,090,961)
Attributable to equity holders of the parent	420,774	1,145,147	4,260,604
Attributable to non-controlling interests from Smiles	359,025	252,745	169,643
Eliminations [Member]
Net Revenue
Passenger	399,867	330,897	288,925
Cargo and other	(104,350)	426	(19,198)
Mileage revenue	(1,078,128)	(1,081,738)	(947,632)
Total net revenue	(782,611)	(750,415)	(677,905)
Operating costs and expenses
Salaries	0	0	0
Aircraft fuel	0	0	0
Aircraft rent	0	0	0
Sales and marketing	(2,872)	0	0
Landing fees	0	0	0
Aircraft, traffic and mileage servicing	765,075	735,399	637,917
Maintenance, materials and repairs	0	0	0
Depreciation and amortization	0	0	0
Passenger service expenses	0	0	0
Other operating expenses	7,162	15	5,300
Total operating income (expenses)	769,365	735,414	643,217
Equity results	(394,701)	285,884	(177,386)
Operating result before financial result, net and income taxes	(407,947)	300,885	212,074
Financial income	(176,433)	(40,155)	110,533
Financial expenses	177,055	40,544	110,534
Exchange rate variation, net	2	0	1
Total financial results	624	389	0
Income (loss) before income taxes	(407,323)	300,496	(212,074)
Income taxes	5,733	4,968	11,795
Net income for the year	(401,590)	295,528	(200,279)
Attributable to equity holders of the parent	(401,590)	295,528	(200,279)
Attributable to non-controlling interests from Smiles	0	0	0
Total Consolidated [Member]
Net Revenue
Passenger	9,185,805	8,671,442	8,583,388
Cargo and other	664,216	729,522	969,929
Mileage revenue	726,001	466,371	224,690
Total net revenue	10,576,022	9,867,335	9,778,007
Operating costs and expenses
Salaries	(1,708,111)	(1,656,785)	(1,580,531)
Aircraft fuel	(2,887,737)	(2,695,390)	(3,301,368)
Aircraft rent	(939,744)	(996,945)	(1,100,086)
Sales and marketing	(590,814)	(555,984)	(617,403)
Landing fees	(664,170)	(687,366)	(681,378)
Aircraft, traffic and mileage servicing	(874,736)	(753,497)	(678,075)
Maintenance, materials and repairs	(368,719)	(593,090)	(603,925)
Depreciation and amortization	(505,425)	(447,668)	(419,691)
Passenger service expenses	(437,045)	(461,837)	(481,765)
Other operating expenses	(610,310)	(320,948)	(493,621)
Total operating income (expenses)	(9,586,811)	(9,169,510)	(9,957,843)
Equity results	544	1,280	(3,941)
Operating result before financial result, net and income taxes	989,755	696,545	183,777
Financial income	213,446	568,504	332,567
Financial expenses	(1,050,461)	(1,271,564)	1,328,891
Exchange rate variation, net	(81,744)	1,367,937	2,266,999
Total financial results	(918,759)	664,877	3,263,323
Income (loss) before income taxes	70,996	1,361,422	(3,447,100)
Income taxes	307,213	259,058	(844,140)
Net income for the year	378,209	1,102,364	(4,291,240)
Attributable to equity holders of the parent	19,184	849,619	4,460,883
Attributable to non-controlling interests from Smiles	R$ 359,025	R$ 252,745	R$ 169,643

XML

26. Commitments (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfCommitmentsLineItems [Line Items]
Future Commitments Resulting From Firm Aircraft Orders	R$ 45,090,382	R$ 48,032,429
Future Commitments Resulting From Operating Lease	6,463,564	6,724,541
Minimum Operating Lease Payments	5,304,714	6,246,725
2017
DisclosureOfCommitmentsLineItems [Line Items]
Future Commitments Resulting From Operating Lease	0	286,829
Minimum Operating Lease Payments	0	857,747
2018
DisclosureOfCommitmentsLineItems [Line Items]
Future Commitments Resulting From Firm Aircraft Orders	0	1,787,388
Future Commitments Resulting From Operating Lease	316,215	483,518
Minimum Operating Lease Payments	858,508	839,343
2019
DisclosureOfCommitmentsLineItems [Line Items]
Future Commitments Resulting From Firm Aircraft Orders	1,117,604	2,917,833
Future Commitments Resulting From Operating Lease	773,268	658,930
Minimum Operating Lease Payments	928,226	889,940
2020
DisclosureOfCommitmentsLineItems [Line Items]
Future Commitments Resulting From Firm Aircraft Orders	4,538,258	4,471,172
Future Commitments Resulting From Operating Lease	848,003	835,468
Minimum Operating Lease Payments	888,944	873,692
2021
DisclosureOfCommitmentsLineItems [Line Items]
Future Commitments Resulting From Firm Aircraft Orders	6,198,259	6,106,634
Future Commitments Resulting From Operating Lease	852,458	839,856
Minimum Operating Lease Payments	746,595	745,719
2022
DisclosureOfCommitmentsLineItems [Line Items]
Future Commitments Resulting From Firm Aircraft Orders	6,353,457	6,229,538
Future Commitments Resulting From Operating Lease	866,119	853,316
Minimum Operating Lease Payments	630,477	646,388
Thereafter
DisclosureOfCommitmentsLineItems [Line Items]
Future Commitments Resulting From Firm Aircraft Orders	26,882,804	26,519,864
Future Commitments Resulting From Operating Lease	2,807,501	2,766,624
Minimum Operating Lease Payments	R$ 1,251,964	R$ 1,393,896

XML

26. Commitments (Details Narrative) - Aircraft [Member] - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfCommitmentsLineItems [Line Items]
Net gain aircraft under sale-leaseback transaction	R$ 0	R$ 233,483
Deferred losses from transactions	R$ 2,887	R$ 9,959

XML

27. Financial instruments and risk management (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	R$ 1,026,862	R$ 562,207	R$ 1,072,332	R$ 1,898,773
Short-term investments	955,589	431,233
Restricted cash	268,047	168,769
Fair Value [Member]
Assets
Cash and cash equivalents	434,295	269,797
Short-term investments	955,589	431,233
Restricted cash	268,047	168,769
Derivative assets	40,647	3,817
Trade receivables	0	0
Deposits	0	0
Other assets	0	0
Liabilities
Debt	0	0
Suppliers	0	0
Derivative liabilities	34,457	89,211
Operating leases	0	0
Book Value [Member]
Assets
Cash and cash equivalents	592,567	292,410
Short-term investments	0	0
Restricted cash	0	0
Derivative assets	0	0
Trade receivables	936,478	760,237
Deposits	655,244	756,810
Other assets	123,721	118,058
Liabilities
Debt	7,105,667	6,379,220
Suppliers	1,471,150	1,111,514
Derivative liabilities	0	0
Operating leases	R$ 139,110	R$ 7,233

XML

27. Financial instruments and risk management (Details 1) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair value variations:
Net gains (losses) recognized in profit or loss (a)	R$ 378,209	R$ 1,102,364	R$ (4,291,240)
Losses recognized in other comprehensive income (loss)	67,913	31,710	(40,226)
Movement of other comprehensive income (loss)
Fair value adjustments during the year	67,913	31,710	(40,226)
Operating costs and expenses	1,050,461	1,271,564	1,328,891
Fuel Derivative [Member]
Movement of assets and liabilities
Asset (liability) as beginning	3,817	0
Fair value variations:
Net gains (losses) recognized in profit or loss (a)	13,768	309
Losses recognized in other comprehensive income (loss)	35,505	0
Settlements (payments received) during the year	(12,443)	3,508
Asset (liability) as ending	40,647	3,817	0
Movement of other comprehensive income (loss)
Balances as beginning	0	0
Fair value adjustments during the year	35,505	0
Net reversal to profit or loss	0	0
Tax effects		0
Balances as ending	35,505	0	0
Effects on the profit (loss)	13,768
Operating costs and expenses	8,626	0	0
Financial results	5,142	309	(29,964)
Foreign Currency Derivatives [Member]
Movement of assets and liabilities
Asset (liability) as beginning	0	1,766
Fair value variations:
Net gains (losses) recognized in profit or loss (a)	0	(40,931)
Losses recognized in other comprehensive income (loss)	0	0
Settlements (payments received) during the year	0	39,165
Asset (liability) as ending	0	0	1,766
Movement of other comprehensive income (loss)
Balances as beginning	0	0
Fair value adjustments during the year	0	0
Net reversal to profit or loss	0	0
Tax effects		0
Balances as ending	0	0	0
Effects on the profit (loss)	0
Operating costs and expenses	0	0	0
Financial results	0	(40,931)	102,696
Interest Rate Derivative Contracts [Member]
Movement of assets and liabilities
Asset (liability) as beginning	(89,211)	(141,443)
Fair value variations:
Net gains (losses) recognized in profit or loss (a)	0	(1)
Losses recognized in other comprehensive income (loss)	(1,093)	(4,842)
Settlements (payments received) during the year	55,847	57,075
Asset (liability) as ending	(34,457)	(89,211)	(141,443)
Movement of other comprehensive income (loss)
Balances as beginning	(147,229)	(178,942)
Fair value adjustments during the year	(1,093)	(4,842)
Net reversal to profit or loss	33,501	128,731
Tax effects		(92,179)
Balances as ending	(114,821)	(147,229)	(178,942)
Effects on the profit (loss)	(33,501)
Operating costs and expenses	(11,548)	(12,574)	(13,150)
Financial results	(21,953)	(116,158)	(22,575)
Equity forward [Member]
Movement of assets and liabilities
Asset (liability) as beginning	0	0
Fair value variations:
Net gains (losses) recognized in profit or loss (a)	11,094	0
Losses recognized in other comprehensive income (loss)	0	0
Settlements (payments received) during the year	(11,094)	0
Asset (liability) as ending	0	0	0
Movement of other comprehensive income (loss)
Balances as beginning	0	0
Fair value adjustments during the year	0	0
Net reversal to profit or loss	0	0
Tax effects		0
Balances as ending	0	0	0
Effects on the profit (loss)	11,094
Operating costs and expenses	0	0	0
Financial results	11,094	0	0
Total Derivative Financial Instruments [Member]
Movement of assets and liabilities
Asset (liability) as beginning	(85,394)	(139,677)
Fair value variations:
Net gains (losses) recognized in profit or loss (a)	24,862	(40,623)
Losses recognized in other comprehensive income (loss)	34,412	(4,842)
Settlements (payments received) during the year	32,310	99,748
Asset (liability) as ending	6,190	(85,394)	(139,677)
Movement of other comprehensive income (loss)
Balances as beginning	(147,229)	(178,942)
Fair value adjustments during the year	34,412	(4,842)
Net reversal to profit or loss	33,501	128,731
Tax effects		(92,179)
Balances as ending	(79,316)	(147,229)	(178,942)
Effects on the profit (loss)	(8,639)
Operating costs and expenses	(2,922)	(12,574)	(13,150)
Financial results	R$ (5,717)	R$ (156,780)	R$ 50,157

XML

27. Financial instruments and risk management (Details 2) R$ in Thousands	12 Months Ended
	Dec. 31, 2017 BRL (R$)
Cash Flow Hedges [Member]
Disclosure of detailed information about financial instruments [line items]
2018	R$ 21,477
2019	(15,099)
2020	(14,062)
2021	(12,328)
2022	(11,013)
Thereafter	(48,291)
Interest Rate Derivative Contracts [Member]
Disclosure of detailed information about financial instruments [line items]
2018	(14,028)
2019	(15,099)
2020	(14,062)
2021	(12,328)
2022	(11,013)
Thereafter	(48,291)
Fuel Derivative [Member]
Disclosure of detailed information about financial instruments [line items]
2018	35,505
2019	0
2020	0
2021	0
2022	0
Thereafter	R$ 0

XML

27. Financial instruments and risk management (Details 3) R$ in Thousands	Dec. 31, 2017 BRL (R$)	Dec. 31, 2016 BRL (R$)
Assets
Deposits	R$ 1,163,759	R$ 1,188,992
Total assets	10,004,748	8,404,355
Foreign Exchange Rate Risk [Member]
Assets
Cash and cash equivalents, short-term investments and restricted cash	1,215,716	548,792
Trade receivables	126,140	104,800
Deposits	655,244	756,810
Derivatives	40,647	3,817
Other assets	0	10,184
Total assets	2,037,747	1,424,403
Liabilities
Short and long-term debt	4,593,169	3,596,379
Finance leases	1,476,151	1,718,012
Foreign suppliers	644,775	344,654
Derivatives	34,457	89,211
Operating leases	139,110	7,233
Total liabilities	6,887,662	5,755,489
Exchange exposure	4,849,915	4,331,086
Commitments not recorded in the statements of financial position
Future commitments resulting from operating leases	5,304,714	6,246,725
Future commitments resulting from firm aircraft orders	45,090,382	48,032,429
Total	50,395,096	54,279,154
Total foreign currency exposure - R$	R$ 55,245,011	R$ 58,610,240
Exchange rate (R$/US$)	3.308	3.2591
Foreign Exchange Rate Risk [Member] | USD
Commitments not recorded in the statements of financial position
Total foreign currency exposure - R$	R$ 16,700,426	R$ 17,983,566

XML

27. Financial instruments and risk management (Details 4) - Liquidity Risk [Member] - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Short and long-term debt	R$ 7,105,667	R$ 6,379,220
Suppliers	1,471,150	1,111,514
Suppliers - Forfaiting	78,416
Derivative liabilities	34,457	89,211
Operating leases	139,110	7,233
Liquidity risk	8,828,800	7,587,178
Current [Member]
Disclosure of detailed information about financial instruments [line items]
Short and long-term debt	369,496	499,542
Suppliers	1,245,352	1,097,997
Suppliers - Forfaiting	78,416
Derivative liabilities	34,457	89,211
Operating leases	28,387	3,215
Liquidity risk	1,756,108	1,689,965
6 to 12 Months [Member]
Disclosure of detailed information about financial instruments [line items]
Short and long-term debt	793,376	335,748
Suppliers	3,772	0
Suppliers - Forfaiting	0
Derivative liabilities	0	0
Operating leases	0	4,018
Liquidity risk	797,148	339,766
1 to 5 Years [Member]
Disclosure of detailed information about financial instruments [line items]
Short and long-term debt	2,651,018	2,654,007
Suppliers	222,026	13,517
Suppliers - Forfaiting	0
Derivative liabilities	0	0
Operating leases	110,723	0
Liquidity risk	2,983,767	2,667,524
Thereafter
Disclosure of detailed information about financial instruments [line items]
Short and long-term debt	3,291,777	2,889,923
Suppliers	0	0
Suppliers - Forfaiting	0
Derivative liabilities	0	0
Operating leases	0	0
Liquidity risk	R$ 3,291,777	R$ 2,889,923

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27. Financial instruments and risk management (Details 5) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of detailed information about financial instruments [line items]
Short and long-term debt	R$ 7,105,667	R$ 6,379,220
Cash and cash equivalents	(1,026,862)	(562,207)	R$ (1,072,332)	R$ (1,898,773)
Restricted cash	(268,047)	(168,769)
Total deficit	(3,068,946)	(3,356,751)	R$ (4,322,440)	R$ (332,974)
Capital Management [Member]
Disclosure of detailed information about financial instruments [line items]
Short and long-term debt	7,105,667	6,379,220
Cash and cash equivalents	(1,026,862)	(562,207)
Short-term investments	(955,589)	(431,233)
Restricted cash	(268,047)	(168,769)
Net debt	4,855,169	5,217,011
Total deficit	(3,068,946)	(3,356,751)
Total capital and net debt	R$ 1,786,223	R$ 1,860,260

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27. Financial instruments and risk management (Details 6) - Fuel Risk [Member] - Fuel Derivative [Member] R$ / shares in Units, R$ in Thousands	12 Months Ended
	Dec. 31, 2017 BRL (R$) R$ / shares
1Q18 [Member]
Disclosure of detailed information about financial instruments [line items]
Percentage of fuel exposure hedged	27.00%
Amount in barrels (thousand barrels)	R$ 855
Future rate agreed per barrel (US$) | R$ / shares	R$ 51.89
Total in thousands of Brazilian Reais	R$ 146,760
2Q18 [Member]
Disclosure of detailed information about financial instruments [line items]
Percentage of fuel exposure hedged	10.00%
Amount in barrels (thousand barrels)	R$ 360
Future rate agreed per barrel (US$) | R$ / shares	R$ 51.33
Total in thousands of Brazilian Reais	R$ 61,124
3Q18 [Member]
Disclosure of detailed information about financial instruments [line items]
Percentage of fuel exposure hedged	6.00%
Amount in barrels (thousand barrels)	R$ 220
Future rate agreed per barrel (US$) | R$ / shares	R$ 51.46
Total in thousands of Brazilian Reais	R$ 37,453
4Q18 [Member]
Disclosure of detailed information about financial instruments [line items]
Percentage of fuel exposure hedged	5.00%
Amount in barrels (thousand barrels)	R$ 163
Future rate agreed per barrel (US$) | R$ / shares	R$ 51.58
Total in thousands of Brazilian Reais	R$ 27,813
Total 12M [Member]
Disclosure of detailed information about financial instruments [line items]
Percentage of fuel exposure hedged	12.00%
Amount in barrels (thousand barrels)	R$ 1,598
Future rate agreed per barrel (US$) | R$ / shares	R$ 51.67
Total in thousands of Brazilian Reais	R$ 273,120

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27. Financial instruments and risk management (Details 7) - Foreign Exchange Rate Risk [Member] - Foreign Currency Derivatives [Member] R$ in Thousands	12 Months Ended
	Dec. 31, 2017 BRL (R$) Segment
Disclosure of detailed information about financial instruments [line items]
Exchange rate	3.308
Dollar Depreciation (-50%) [Member]
Disclosure of detailed information about financial instruments [line items]
Exchange rate	1.654
Total exposure | R$	R$ 2,424,957
Dollar Depreciation (-25%) [Member]
Disclosure of detailed information about financial instruments [line items]
Exchange rate	2.481
Total exposure | R$	R$ 1,212,479
Dollar Appreciation (+25%) [Member]
Disclosure of detailed information about financial instruments [line items]
Exchange rate	4.135
Total exposure | R$	R$ (1,212,479)
Dollar Appreciation (+50%) [Member]
Disclosure of detailed information about financial instruments [line items]
Exchange rate	4.962
Total exposure | R$	R$ (2,424,957)

XML

27. Financial instruments and risk management (Details 8) - Interest Rate Risk [Member] R$ in Thousands	12 Months Ended
	Dec. 31, 2017 BRL (R$)
Short & Long-Term Debt, Net Of Short-Term Investments [Member]
Disclosure of detailed information about financial instruments [line items]
Risk	Increase in the CDI rate
Referential rate	6.89%
Exposure Amount (probable scenario)	R$ 1,129,300
Possible Adverse Scenario	90,595
Adverse Scenario Remote	R$ 108,714
Short & Long-Term Debt, Net Of Short-Term Investments [Member]
Disclosure of detailed information about financial instruments [line items]
Risk	Decrease in the Libor rate
Referential rate	1.69%
Exposure Amount (probable scenario)	R$ (287,608)
Possible Adverse Scenario	(6,091)
Adverse Scenario Remote	R$ (7,309)
Derivatives [Member]
Disclosure of detailed information about financial instruments [line items]
Risk	Decrease in the Libor rate
Referential rate	1.69%
Exposure Amount (probable scenario)	R$ (34,457)
Possible Adverse Scenario	(730)
Adverse Scenario Remote	R$ (876)

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27. Financial instruments and risk management (Details 9) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of detailed information about financial instruments [line items]
Cash and cash equivalents	R$ 1,026,862	R$ 562,207	R$ 1,072,332	R$ 1,898,773
Restricted cash	268,047	168,769
Level 2 | Book Value
Disclosure of detailed information about financial instruments [line items]
Cash and cash equivalents	434,295	269,797
Short-term investments	922,888	390,129
Restricted cash	268,047	168,769
Derivative assets	40,647	3,817
Derivative liabilities	(34,457)	(89,211)
Level 2 | Fair Value
Disclosure of detailed information about financial instruments [line items]
Cash and cash equivalents	434,295	269,797
Short-term investments	922,888	390,129
Restricted cash	268,047	168,769
Derivative assets	40,647	3,817
Derivative liabilities	(34,457)	(89,211)
Level 1 | Book Value
Disclosure of detailed information about financial instruments [line items]
Short-term investments	32,701	41,104
Level 1 | Fair Value
Disclosure of detailed information about financial instruments [line items]
Short-term investments	R$ 32,701	R$ 41,104

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28. Changes in liabilities arising from financing activities (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement Line Items [Line Items]
Short and long-term debt	R$ 7,105,667	R$ 6,379,220
Non-controlling interests from Smiles	412,013	293,247
Capital stock	3,082,802	3,080,110
Share issuance costs	(155,618)	(155,618)
Opening balance
Statement Line Items [Line Items]
Short and long-term debt	6,379,220	9,304,926	R$ 6,235,239
Non-controlling interests from Smiles	293,247	224,022	185,413
Capital stock	3,080,110	3,080,110	2,618,799
Share issuance costs	(155,618)	(155,223)	(150,214)
Cash flows
Statement Line Items [Line Items]
Short and long-term debt	612,396	(890,559)	426,973
Non-controlling interests from Smiles	(254,892)	(171,829)	(136,822)
Capital stock	2,692	0	465,048
Share issuance costs	(523)	(395)	(5,009)
Net income for the year
Statement Line Items [Line Items]
Short and long-term debt	0	0	0
Non-controlling interests from Smiles	359,025	252,745	169,643
Capital stock	0	0	0
Share issuance costs	0	0	0
Interest paid on loans
Statement Line Items [Line Items]
Short and long-term debt	(505,105)	(606,405)	(548,773)
Non-controlling interests from Smiles	0	0	0
Capital stock	0	0	0
Share issuance costs	0	0	0
Import financing
Statement Line Items [Line Items]
Short and long-term debt	63,066
Non-controlling interests from Smiles	0
Capital stock	0
Share issuance costs	0
Non-cash changes Exchange variations on loans
Statement Line Items [Line Items]
Short and long-term debt	68,895	(1,220,608)	(2,337,999)
Non-controlling interests from Smiles	0	0	0
Capital stock	0	0	0
Share issuance costs	0	0	0
Non-cash changes Interest on loans
Statement Line Items [Line Items]
Short and long-term debt	502,529	627,672	600,410
Non-controlling interests from Smiles	0	0	0
Capital stock	0	0	0
Share issuance costs	0	0	0
Other
Statement Line Items [Line Items]
Short and long-term debt	(15,334)	(549,007)	253,078
Non-controlling interests from Smiles	14,633	(11,691)	5,788
Capital stock	0	0	(3,737)
Share issuance costs	523	0	0
Closing balance
Statement Line Items [Line Items]
Short and long-term debt	7,105,667	6,379,220	9,304,926
Non-controlling interests from Smiles	412,013	293,247	224,022
Capital stock	3,082,802	3,080,110	3,080,110
Share issuance costs	R$ (155,618)	(155,618)	(155,223)
Repurchase of debt securities
Statement Line Items [Line Items]
Short and long-term debt		(286,799)	0
Non-controlling interests from Smiles		0	0
Capital stock		0	0
Share issuance costs		R$ 0	R$ 0

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29. Insurance (Details) R$ in Thousands	Dec. 31, 2017 BRL (R$)
Guarantee [Member] | Brazil, Brazil Real
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	R$ 12,504,240
Guarantee [Member] | USD
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	3,780,000
Civil Liability per Event [Member] | Brazil, Brazil Real
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	2,481,000
Civil Liability per Event [Member] | USD
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	750,000
Inventories [Member] | Brazil, Brazil Real
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	992,400
Inventories [Member] | USD
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	300,000
Rent Insurance [Member] | Brazil, Brazil Real
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	1,470
D&O liability insurance [Member] | Brazil, Brazil Real
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	50,000
Fire insurance [Member] | Brazil, Brazil Real
Disclosure of types of insurance contracts [line items]
Maximum reimbursable amounts	R$ 9,025