Azul Airlines Chief Revenue Officer, Abhi Shah at CAPA Americas Aviation & LCCs 2022 Summit

Transcript

Abhi Shah:The market is recovering quite well. So we had our earnings call a couple of weeks ago, and our domestic recovery is 30% above 2019, which is going very, very well. International is starting to make its way back also. Our corporate revenue is now above 2019 levels. Wow. Our leisure revenue already was above and that continues to get better. So overall, we're guiding to, you know, second, second quarter of this year, record revenue, all-time record revenue for Azul, which gives a sign of how the recovery is going. It's mostly domestic for sure. International is coming. I think only by the end of the year maybe we'll catch up to the international recovery. But domestic is very strong, leisure and corporate. Average fares are at record highs. We've had record booking weeks this year, all-time record booking weeks at all-time record average fares. So the customer is traveling, the customer is paying up. And it's not just our travel business, but our vacations business has had record booking days, our loyalty business. Our customers are twice as engaged this year compared to 2019. We've always said Brazil's a growing market, so in our opinion, this is just Brazil growing again. Remember, the government didn't really help us, couldn't help us, couldn't help the individual businesses, so they have to go out there and they have to make their own recovery, have to make their own revenue. So people are out there traveling again. I think Brazil is a growth market. We always believed it is. We lost a couple of years of that growth, and now we're getting back to it. We certainly had issues in January due to Omicron, but that was very short-term. There is no shortage of pilots in Brazil. Brazil has a very— has a long history of aviation and a very healthy pipeline. And pilots love flying for us because they can be promoted to a captain in 8 or 9 years. And so that's an absolute amazing incentive for any new young pilot to want to come work for us. From what we control, There are no constraints. Macroeconomically, of course, we're concerned about the price of fuel, and that's run up lately. And so we have to be careful when we manage our growth to make sure that we are able to pay and to pass on those costs to our customers and actually make the revenue that we need to cover those costs. So internally, the market, our network, our fleet, what we control, we're very, very confident and optimistic of our future. Yeah, it's going to be a mix. I mean, we now have 153 destinations that we serve. 150 of them in Brazil. And so that's by far and away the broadest network. We think that number is going to be over 200. And so we're using our diversified fleet to bring more demand to our network. We will have some international as well, but our focus is going to be domestic Brazil. I would say we're majority point-of-sale Brazil, as actually the Brazilian market tends to be point-of-sale Brazil. For everybody. It's just a stronger originating market. And then we're going to add more cities to our network, have more connectivity. And so our growth is within our own network. Look, I think that, you know, we have been very vocal in our belief that partnerships, consolidation is positive for the industry and for the consumer. We tried ourselves with LATAM, and now we see airlines finding their own way of surviving, growing in a post-pandemic world. So, you know, we think as long as airlines are having these types of conversations about partnerships, we think it's a good thing. Well, we have a bunch of partners around the world, right? We have our co-chair partners, which are United, JetBlue, and TAP, and those are important to us. We're constantly looking at more partners within Brazil as well. So we're open to working with everybody. We were pretty public about it. Actually, and we'll look at any opportunity that comes along. Things that we don't control, honestly. So, you know, our network, our customer, our service is strong. We have to make sure that Azul stays special as we get big and we don't lose our secret sauce. It's hard to tell, but it's our people and how they take care of each other and our customer.

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