Brazil: Azul Expects to “Back to Basics” and Focus More on Operations in 2025
The Brazilian airline Azul is preparing for a year of consolidation and growth in 2025, following a challenging 2024. According to the company’s CEO, John Rodgerson, in an interview with Reutershttps://www.reuters.com/, this year will mark a “return to basics,” allowing the airline to refocus on its operations and service quality.
A 2024 of Challenges and Financial Restructuring
Last year, Azul faced several difficulties, including:
- Supply chain issues that delayed aircraft deliveries.
- Flooding that forced the prolonged closure of the key Porto Alegre airport.
- A devaluation of the Brazilian real, which impacted costs.
- Tensions in its financial balance, leading to a debt restructuring.
Despite these obstacles, Azul was able to complete a major financial restructuring process, eliminating approximately US$1.6 billion in debt and obtaining US$525 million in new financing. This strategy allows the company to refocus on operational efficiency and customer experience.
Growth Expectations for 2025
Azul projects an EBITDA of 7.4 billion reais (approximately $1.29 billion) for 2025, representing a 22% growth compared to the previous year. In the fourth quarter of 2024, the company achieved an EBITDA of 1.9 billion reais, a 33% year-on-year increase, driven by higher passenger traffic and load factors.
Azul’s net revenue increased by 10.2% in the fourth quarter, reaching 5.54 billion reais. Although LSEG analysts expected revenue of 5.62 billion reais, the results show a significant improvement in the airline’s financial performance.
A New Strategy for the Brazilian Market
Rodgerson emphasized that Azul’s problem was never its operations but its financial structure. Thanks to agreements with lessors, including a debt-for-equity swap, the airline was able to meet its market commitments.
Now, Azul is considering a potential merger with its rival GOL, which could make it the dominant airline in Brazil with a market share of nearly 60% in domestic flights.
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