Aug 14, 2026 earnings call — Capacity cuts, fuel response and balance sheet recovery
Azul reported record second quarter operating revenue of BRL 5 billion and Adjusted EBITDA of BRL 510 million (10.2% margin).
Revenue $1.0B (est $1.0B) · EPS $-1.09 (est $-0.49)
Key quotes
"In response to higher fuel prices, we proactively reduced capacity to protect cash and profitability."
"Total debt declined by approximately BRL 13 billion year-over-year reaching BRL 21.4 billion reflecting successful completion of our restructuring."
Analyst Q&A 7
rising unit costs and one-off payments
Q (Andre Ferreira · Bradesco BBI): He asked why CASK ex-fuel rose (personnel, marketing, maintenance) and how that will evolve. He also asked about levered free cash flow hit from nonrecurring Chapter 11 payments and whether more payments remain in Q3–Q4.
A: Management said pilots received retention guarantees and bonuses while flying was reduced to keep them during the cut in capacity, and those measures should normalize in Q3 and Q4. They said about BRL 100 million were temporary measures that should not repeat next year. On the Chapter 11 payments, they said about BRL 800 million affected cash flow, 2/3 of those payments were already done in Q1 and Q2 and the remaining 1/3 should flow between Q3 and Q4 so the company should be clean from 2027 onward.
"I would say something around BRL 100 million that should not repeat in the next year for example because we are talking about temporary measures, especially on the salary side." — Antonio Garcia (CFO)
fee recapture and no guidance reason
Q (Guilherme Mendes · JPMorgan): He asked how the fee-recapture strategy will play out in H2 and how demand and price sensitivity look for corporate and leisure. He also asked why the company did not give short-term guidance.
A: Management said demand momentum is improving after the World Cup, with strong corporate fares and recovering leisure demand, and their capacity posture lets them be selective to recapture fuel costs. They said the fuel curve is very volatile (moving 10% week-to-week), which makes short-term guidance unreliable, so they prefer to point investors to Azul's long-term plan while noting they feel good about Q3. Antonio added that giving guidance now could fail because of parabolic fuel-price behavior.
"As it relates to the guidance this year, the fuel curve keeps moving 10% one week to the next and it's about building credibility and pointing investors to the long-term strategy of Azul, right?" — John Rodgerson (CEO)
passing fuel into fares and premium focus
Q (Gabriel Rezende · Itau BBA): He asked how the company and sector manage fare increases amid volatile fuel and what to expect for profitability in H2. He also asked why Azul targets premium customers and the benefits.
A: Management said the industry is focused on maximizing revenue and maintaining fare discipline given the fuel curve, and Azul's capacity discipline lets them be selective on demand. They highlighted their network advantage—over 200 nonstop routes—and said premium and corporate customers are favorable now; loyalty tiers, credit card mix and vacations cross-sell increase revenue and stickiness. John added that improved operations, on-time performance and better product (WiFi, entertainment) attract premium flyers and drive revenue.
"We have over 200 nonstop routes, nothing has changed in terms of the competitive dynamics." — Abhi Shah (PRESIDENT)
liquidity target and September bookings
Q (Michael Linenberg · Deutsche Bank): He asked what liquidity as a percent of last 12 months' revenue should be and where liquidity should be by year-end given EBITDA and cash outflows. He also asked how much of September is already booked and an early read on December.
A: Antonio said a normal target is around 20% of last 12 months' revenue and they are confident to end the year above 20%. John noted American Airlines funding is still pending antitrust approval and, if approved (expected in Q3), would boost liquidity. Abhi said more than 50% of revenue is booked inside 21 days, yields look higher for September and October, and fourth-quarter bookings are low today (around 15%, 20% or not even that much).
"A normal percent should be around 20% and basically means today we are confident to end of this year." — Antonio Garcia (CFO)
fleet plan and capacity mix
Q (Savanthi Syth · Raymond James): She asked the fleet plan for the next 12–18 months and how domestic versus international capacity will evolve. She also asked about fleet utilization going forward.
A: Abhi said the restructuring simplified the forward fleet: "So we have 3 more E2s this year is all and next year 5 E2s on the domestic side." He said they received 1 neo this year, the next is delayed to October/November, and they are replacing widebodies to reach 12 widebody aircraft by year-end as a baseline. John added Q2 was the bottom, all E2s and A320s are flying now so they can produce more ASKs without large balance-sheet additions, and they will be cautious on capacity deployment; utilization targets were given for E2s (11.5–12 hours), 320s (~14 hours) and 321s (~15 hours).
"So we have 3 more E2s this year is all and next year 5 E2s on the domestic side." — Abhi Shah (PRESIDENT)
crew incentives and fuel recapture progress
Q (Jens Spiess · Morgan Stanley): He asked whether the crew incentive program is a one-time item or will remain if capacity stays similar. He also asked if the close-in booking curve helps fuel recapture and how much fuel recapture to expect in coming quarters.
A: Abhi said the close-in booking curve helps because it leaves more seats to fill at better fares, which aids recapture. He said fuel recapture depends on the fuel curve: with the curve three weeks ago they expected about 90% recapture by year-end, but with the new peak they are around 60% now. John said the pilot salary retention is expected to normalize over the next couple of quarters.
"the fuel curve that we had like 3 weeks ago, we were probably at 90% recapture by the end of the year." — Abhi Shah (PRESIDENT)
timeline for capacity to return
Q (Hamed Khorsand · BWS Financial): He asked whether capacity will come back all in Q4 or follow a timeline and when to expect full recovery.
A: Abhi said capacity will return over the next several quarters as the international fleet enters over the next 6 months. He said 3Q will still be negative year-over-year but less negative, they expect "0 around fourth quarter" and then positive low single digits into 2027. He added the entire E2 fleet is flying and they expect 0 A320 AOGs in the next 15 to 30 days.
"You will start to see 0 around fourth quarter and then you'll start to see positive low single digits, low to mid-single digits for 2027." — Abhi Shah (PRESIDENT)