Azul posted a R$3.87 billion ($703 million) loss for the second quarter of the year after the devaluation of the Brazilian Real to the dollar, as well as higher fuel costs, hit the company’s earnings.
The real depreciated against the US dollar by 11.7% during the period, resulting in an increase in lease liabilities and loans denominated in foreign currency, the company said on 12 August.
Adjusted for the exchange rates as well as unrealised derivative results and other financial expenses, Azul says it lost R$744 million during the second three-month period of the year. That’s 31% more than last year.
Revenue during the three months that ended on 30 June reached R$4.2 billion, down 2.3% compared to the same period a year ago. The decline was primarily due to the impact of floods in the southern Brazilian state of Rio Grande do Sul in May and the temporary reduction of the airline’s international capacity. International capacity as measured in available seat kilometres fell by 8% in the first half of the year.
“Without these impacts, we estimate that our top-line revenues would have been above” the second quarter of last year, chief executive John Rodgerson says.
Expenses during the period were R$3.7 billion, up slightly over last year.
The airline ended the quarter with 181 aircraft in its operating fleet, one airframe more than at the same point during 2023.
For the full-year 2024, the airline cut its capacity growth expectations to 7% from a previous 11%. The adjustment is due to the flooding and resultant reduction of domestic capacity in Porto Alegre. That city’s airport was completely closed due to the natural disaster, and is due to partially re-open in late October.
The impact of the floods on Azul’s bottom line are “at least R$200 million”, Rodgerson says.
Currently, there are just seven flights per day into a military base close to Porto Alegre, where previously 120 flights arrived at the airport, chief revenue officer Abhi Shah adds. “People are not travelling in that region right now.” When flights are restored, Azul anticipates it will once again be the largest carrier in the region.
The region is a “big driver” of international demand as well, he says. The resumption of sme flights in the second half of October stands to boost the carrier’s domestic and international performances.
DELIVERY DELAYS
Aircraft delivery delays are also playing into the lowered full-year forecast figures.
The airline received a single Airbus A320 during the second quarter but further Airbus narrowbodies have been pushed into 2026, Shah says. Azul is expecting a total six A330s this year as well. Two are already in the fleet, two more will arrive in September, and the final two could be delivered sometime between December and January.
Planned deliveries of the company’s Embraer E195-E2s are also “moving around a little bit to the right”, Shah says. Some aircraft will be delivered in December, which could help boost the airline’s capacity next year.
All told, Rodgerson says the airline expects 15-18 Embraer airframes to be delivered “between now and the end of next year”. On average, delivery dates for the Embraers are “shifting 30-45 days to the right”. According to Cirium fleets data, Azul has 56 of the type on order.
