Azul’s CEO John Rodgerson at CAPA's Latin America Aviation & LCCs Summit

Transcript

John Rodgerson:We've seen unbelievable demand that we've never seen in Brazil before. And so, you know, some of it's been pent up, some of it's been a mix of new leisure demand with the flexible work. But, you know, we're seeing, you know, 30% more traffic than we saw in 2019. And so a significant increase at much higher fares. Yeah, I think what's happened since the pandemic is capacity has come back in a very rational manner. Everybody focused on where they're strong, right? And so you've seen us focus very much our capacity deployment in our hubs, you know, Campinas and Recife and Confins and where we're strong. And we may have steered away from some of the other places where our competitors are strong, right? And so we're deploying capacity where we think we can make money. Well, once you serve a certain amount of cities in a region, right, in Manaus, You know, we were serving, you know, 16 different cities from Manaus, right? And a lot of the north of Brazil. And so what we decided to do is one of our best flights, you know, pre-COVID was Belém to Fort Lauderdale. And then once we had all of that connectivity, it just makes sense. And, you know, when you think about, you know, Fort Lauderdale and Florida, it's just another Brazilian city. You know, let's not kid ourselves. Brazilians love to go to South Florida. And I think that that's, you know, that's what made it work for us. And so, you know, we met with the governor there, we got a reduction in fuel taxes. And I think that was— it's going to make it work. You know, we're going to announce, you know, very shortly that we're kind of accelerating our E2 deliveries and also kind of been able to get rid of some of our older generation aircraft, right? As we look more towards, you know, getting more next-gen aircraft in the fleet, you know, that's the way with these high fuel prices. It's it's more important than ever, and so that's really what we're looking at. And so so those were the announcements will be forthcoming in Brazil. Yep. Yeah. So it's it's pretty remarkable kind of the amount of cities that we can serve, and it's really because of the type of aircraft that we have. You know, we have very small aircraft in the Cessna. Cessna Caravans all the way up to the A321s that are flying domestically, and then we fly obviously internationally. And so, you know, the fact that we can deploy an ATR in many cities in Brazil, we can fly a Cessna, we can fly an E-Jet, and it opens up more opportunities for us than our competitors can do with their type— with their aircraft. You know, we're at about 80% volume but 130% revenue, right? And for us, revenue is more important than volume, right? So I think that that's kind of key for us. And so, You know, the masks on aircraft, you know, was last week. And so as you think about it, when, you know, these large corporates are thinking about, hey, how do we, you know, how do we get our workforce back out there? And so, you know, testing to the US and, you know, stopped about 2 months ago. And so slowly things are coming back, but we expect it to be fully back by the first quarter in terms of volume and obviously up a lot in terms of revenue. I think anytime, you know, people get together, it's healthy for the industry. And for capacity and for making money. And so we see that, we see that as a positive thing. But, you know, you know, I think the Abra, it's not domestic consolidation, right? It's kind of intra-Latin American consolidation. And so, you know, I don't think that that's enough to kind of really move the needle overall. You know, when I think of consolidation that really changes things, it's the consolidation you've seen in the United States, you've seen in Europe, you know, where those companies have come together. And I think that's what really moves the needle overall. I don't think this year. I think probably by the first quarter we'll have more international announcements, but for this year, I think we're done with our network through the end of the year because we have to start selling it.

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