Bullish views on A320neos underpin Azul Airlines’ positive outlook for 2H2017

Brazil's third largest airline, Azul, is striking a positive tone as conditions in the country's domestic air travel market begin trending in the right direction and international demand begins to rebound. The airline is resuming growth to the US in late 2017 with the launch of service from Belo Horizonte to Orlando, and Belém to Fort Lauderdale, in Dec-2017.

Azul is planning up to 13% capacity growth in 2017, driven mostly by the addition of larger gauge Airbus A320neo narrowbodies to its fleet. The airline's capacity expansion may seem robust in the light of still tenuous conditions in the Brazilian market, but Azul is confident its growth will be absorbed - after the company posted a solid revenue performance in the typically weaker 2Q2017.

The airline is also examining additional product unbundling opportunities after becoming the first operator in Brazil to start charging for checked baggage in Jun-2017. Azul is studying ancillary models worldwide to craft its product unbundling strategy, since the concept is just beginning to take hold in the Latin American market.