Azul S.A.

Azul reported second-quarter operating revenue of BRL 5 billion, a record for the period, with revenue up 0.7% year over year. Adjusted EBITDA was BRL 510 million, representing a 10.2% margin, and RASK increased 12.7% year over year to BRL 0.4341. CASK was BRL 0.4480, up 26% year over year, mainly due to a 61.8% increase in fuel cost per liter. Immediate liquidity ended at BRL 3.7 billion, equivalent to 16.6% of last-12-month revenue, while total debt declined by about BRL 13 billion year over year to BRL 21.4 billion and leverage improved to 2.8x. For guidance, management did not provide full-year 2026 guidance, said it expects much higher EBITDA in the second half, and said liquidity should be above 20% of last-12-month revenue by year-end; it also expects to access up to BRL 4.6 billion of government-backed financing in Q3 or Q4 2026.

John Rodgerson framed the quarter as evidence that Azul’s restructuring is producing a more resilient airline, with a stronger balance sheet, better reliability and more disciplined capacity allocation. He emphasized the company’s operational recovery, saying Azul was the most on-time airline in Brazil in April, June and July and in Latin America in July, while NPS improved by 26 points since December 2025. His tone was confident and strategic, repeatedly stressing premium revenue, customer experience, fleet simplification and restoring international flying with less ACMI reliance.

Antonio Garcia focused on the financial turnaround and the mechanics behind it. He cited BRL 510 million of Adjusted EBITDA, BRL 3.7 billion of immediate liquidity, BRL 21.4 billion of total debt and a 2.8x leverage measure, and said restructuring permanently reduced interest payments by more than 50%. He also noted BRL 794 million of nonrecurring restructuring-related cash outflows in the quarter, said BRL 100 million of temporary personnel-related costs should not repeat next year, and said the remaining one-third of Chapter 11-related payments should fall in Q3 and Q4 before Azul is “very clean from 2027 onwards.”

Analysts pressed on higher CASK ex-fuel, pilot retention costs, free cash flow, and the lack of formal guidance. Management said about BRL 100 million of personnel-related costs were temporary and tied to pilot retention while capacity was reduced, and said those costs should normalize over the next couple of quarters. On cash, Antonio said two-thirds of the restructuring-related payments were made in Q1 and Q2, with the remaining one-third expected in Q3 and Q4. Management also explained that close-in booking behavior is helping yield management, but that the fuel curve remains the key variable behind its decision not to issue short-term guidance.