Azul’s Performance Results On Long Haul Routes Remains Solid
Azul’s chief revenue officer Abhi Shah discusses corporate demand in Brazil, the airline’s performance on long haul routes and offers an update on the airline’s efforts to forge a JV with United. He also provides insight into Azul’s plans to replace its older E-Jets.
Transcript
Abhi Shah:Yeah, it's doing pretty well actually. On the last earnings call, we talked about demand. Second half of the year is the better part of the year seasonally. Corporate demand is good, better than last year for sure. Good discipline on the capacity side, good discipline on the fare side, so we feel pretty good about the second half of the year. They're doing well. I mean, if you look at our traffic results, the load factors are strong. We've added a couple of new frequencies, a second flight to Lisbon daily, connect some dots, Recife to Orlando, Belo Horizonte. So we feel pretty good overall. We'll make some adjustments as needed based on the currency, but we feel good about the international network. It's a long process. It takes time. They're very complicated. You need to think about things years in advance. So you've got to make sure you think through all the scenarios. I would say it's in progress. We're not at the beginning, we're not at the end, so we're somewhere in the middle. And, you know, it probably takes about 6 months minimum to negotiate and then another 18 months, a year to get it approved. So it takes some time before they're implemented, but we're in the process. So that process is currently under antitrust approval process. It's on schedule. We'll have to see kind of how long it takes. You know, there's been a public opinion where people can offer their opinions on the topic. So we're currently in that process now. The antitrust authorities are approving everything, looking at everything. I don't have a timeline, but, you know, we're cautiously optimistic that we're going to move forward with it. We're very much in the fleet transformation process right now where we're looking to replace our old E1s with new E2s and new A320neos. You know, I think, I think we've been successful. This year we sold 6 to a European airline. We're looking to sell more next year. I think we are finding a market for the right price, and given the economics of the E2 and the E1, I'm confident that we'll be able to make the replacement work. Thank you.
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