Q1 2026 Azul SA Earnings Call

May 7, 2026

Zach: The icon at the bottom of your screen and write your name and company. When your name is announced, please turn your microphone on and proceed. Now, I would like to turn the presentation over to Thais Haberli, Head of Investor Relations. Please proceed, Thais.

Thais Haberli: Thank you, Zach. Welcome all to Azul's Q1 Earnings Call. The results that we announced this morning, the audio of this call, and the slides that we reference are available on our IR website. Before I turn the call over to John, I'd like to caution you regarding our forward-looking statements. Any matters discussed today that are not the historical facts, particularly comments regarding the company's future plans, objectives, and expected performance constitute forward-looking statements. These statements are based on a range of assumptions that the company believes are reasonable but are subjected to uncertainties and risks that are discussed in detail in our CVM and SEC filings. Also, during the course of the call, we will discuss non-IFRS performance measures, which should not be considered in isolation. Presenting today will be John Rodgerson, Azul's CEO, and Antonio Garcia, our CFO.

Thais Haberli: Abhi Shah, the President of Azul, is also here for the Q&A session. With that, I will turn the call over to John. John?

John Rodgerson: Thank you, Thais. Welcome everyone, and thank you for joining us today. We're pleased to present Azul's Q1 results. This quarter is particularly important because it reflects the early outcomes of decisions we made proactively on capacity, cost, and capital structure in anticipation of a more volatile macro environment. Despite operating with lower capacity in the quarter, we delivered record Q1 results across revenue, RASK, EBITDA, and EBIT, reinforcing the strength and flexibility of our business model. As we go through the presentation, we'll focus on three core themes: disciplined revenue generation, structural cost efficiency, and a continued de-risking of our balance sheet, all of which position Azul well for the remainder of the year. Before we dive into the details, I would like to begin by thanking our more than 14,000 crew members for their hard work, dedication, and commitment to excellence.

John Rodgerson: Their focus on safety, service quality, and operational reliability is the foundation of Azul's success, and the record performance we delivered this quarter is a direct reflection of their passion, resilience, and professionalism. These strengths were also essential in establishing our partnership with the Brazilian Football Confederation, reinforcing Azul's position as the official airline of the Brazil national football teams. We are extremely proud of this partnership, and I'm especially excited about this announcement given that we're heading into the World Cup. It's a powerful moment to be alongside the Brazilian teams, supporting a symbol that unites the entire country. I also want to remind everyone that the Women's World Cup will be in Brazil next year, and of course, we'll be supporting the Brazil women's team. This partnership goes beyond brand visibility.

John Rodgerson: It reinforces Azul's emotional connection with Brazilian consumers, strengthens our presence across leisure and corporate travel segments, and supports long-term demand generation. Importantly, it aligns our brand with national pride and premium service. We are the true Brazilian carrier that serves all of Brazil. As we continue building this stronger, more resilient Azul, I'm pleased to welcome our new Chief Financial Officer, Antonio Garcia, whose leadership will be instrumental in the next phase of our financial and strategic evolution. His depth of industrial and financial expertise strengthens our leadership team as we focus on de-leveraging cash generation and long-term value creation. With that, I'll turn the call over to Antonio. Antonio?

Antonio Garcia: Thank you, John. I'm truly excited to be joining Azul at such a special moment. I have worked closely with the company for many years as supplier. I have always admired Azul's culture, its commitment to customers, and its unique ability to execute with discipline and consistency. Joining the team now, right after the successful financial restructuring and at the start of the new chapter, giving me first, tremendous sense of responsibility, and second, optimism on the way forward. Azul has a strong foundation, a clear strategy, and exceptional group of leaders and crew members. I look forward to contribute to Azul next stage, strengthening our financial position even further and helping deliver long-term value for our customers, partners, and shareholders. Why I'm here at Azul? I do see a lot of value creation. I do believe slide 4 explain exactly why. Azul is a unique airline in every dimension.

Antonio Garcia: We have a customer-centric culture that consistently delivers the best travel experience. We operate a flexible next-gen fleet that give us unmatched efficiency and adaptability. Our strategic capacity management and deep understanding of demand allows us to maximize profitability even in volatile environments. We have a robust, unrivaled network that reach every region of Brazil with minimal competitive overlaps. All of this supported by strengthening capital structuring following our successful restructuring, putting Azul on the strong financial foundation in its history. These fundamentals are people with great culture. Our strategy and our competitive advantage are exactly why I choose to join Azul. Azul is perfectly positioned for the next phase of delivery and long-term value creation. With that, let me turn back to John, who will walk you through the strong results we delivered in Q1. Thank you.

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With that, let me turn back to John.

John Rodgerson: Thank you, Antonio. We're truly excited to have you with us, we're confident that your experience and leadership will add tremendous value to Azul. Turning to our Q1 results. Slide 5 shows the strong performance we delivered this quarter. The metrics shown here underscore both resilience of our business model and the effectiveness of our strategic initiatives. We reported operating revenues of BRL 5.5 billion, a Q1 record. This was supported by healthy demand, disciplined capacity deployment, strong ancillary revenue, continued growth from our business units, with RASK increasing 4.3% year-over-year. Our EBITDA reached BRL 1.7 billion, up 22.6% year-over-year, with a 31.1% margin, which translates to an expansion of 5.4 margin points year-over-year.

Whom we will walk you through the strong results with delivering the first quarter. Thank you. Thank you, Antonio. We're tried to have you with us, and we're confident that your experience in leadership, will add tremendous value to us as well.

Operator: The icon at the bottom of your screen and write your name and company. When your name is announced, please turn your microphone on and proceed. Now, I would like to turn the presentation over to Thais Haberli, Head of Investor Relations. Please proceed, Thais.

John Rodgerson: EBIT totaled BRL 1 billion, up 83% versus Q1 2025, with a 19.1% margin. These results reflect consistent execution and disciplined capacity, as you can see on slide 6. As we outlined in our plan, Azul made a deliberate decision to reduce capacity and focus on the markets where we generate the highest profitability. This disciplined approach is now clearly reflected in our results. We delivered an impressive 83% increase in operating results in the quarter, while we reduced our capacity by 2.7% year over year. This performance demonstrates that our strategy is working exactly as we intended. By proactively adjusting our network and prioritizing profitability over market share, we are capturing stronger margins, improving cash flow generation, and reinforcing the structural resilience of our business model.

Disciplined capacity. As you can see on slide 6, as we outlined in our outlined in our plan, Azul made a deliberate decision to reduce capacity and focus on the markets where we generate the highest profitability. This disciplined approach is now. Clearly reflected in our results. We delivered an impressive 83% increase in operating results in the quarter. While we reduced our capacity by 2.7% year-over-year, this performance demonstrates that our strategy is working exactly as we intended,

John Rodgerson: This is the outcome we planned for. The results speak for themselves. Beyond the strong profitability impact of our capacity discipline, we also continue to deliver meaningful progress on the cost side. Turning to slide seven, you can see that our financial restructuring was about more than just debt and fleet. We used this moment as an opportunity to streamline the company, reduce structural costs, and become an even more efficient and resilient airline. In Q1, our CASK decreased 5.7% year over year, primarily driven by our cost initiatives we implemented throughout the restructuring, supported by lower fuel prices and a stronger Brazilian real against the dollar. When compared to one of our regional peers, Azul continues to maintain the lowest CASK in the region, an even more remarkable accomplishment considering our diversified and more complex fleet.

Right, proactively adjusting our Network and prioritizing profitability over market share, we are capturing stronger, margins improving cash flow generation, and reinforcing. The structural resilience of our business model. This is the outcome. We plan for and the results speak for themselves.

Thais Haberli: Abhi Shah, the President of Azul, is also here for the Q&A session. With that, I will turn the call over to John. John?

Beyond the strong profitability impact of our capacity to discipline. We also continue to deliver meaningful progress on the cost side.

Turning to slide 7. You can see that our financial restructuring was about more than just debt and Fleet. We use this moment as an opportunity to streamline the company reduce structural costs and become an even more efficient and resilient Airline.

John Rodgerson: This performance underscores our structural cost advantage and demonstrates the effectiveness of the measures implemented during the restructuring process. I just want to repeat, we have the lowest unit cost in the region. Beyond the improvements in our cost structure, we also continue to strengthen one of the most important foundations of our business, our fleet. Turning to slide 8, you will see the significant progress we made in modernizing and optimizing our fleet mix. We reduced our E1 fleet by 31% year over year, while increasing our E2 fleet by more than 40%. As a result, we ended the Q1 with almost 93% of our domestic capacity coming from next-gen aircraft, considerably higher than any competitor in the region. This modern and efficient fleet is what enables us to serve all of Brazil with minimal overlap and unmatched network breadth.

in the first quarter, our Cask, decreased 5.7% year-over-year, primarily driven by our cost initiatives, we implemented throughout the restructuring supported by lower fuel prices and a stronger Brazilian real against the dollar when compared to 1 of our regional peers, Azul continues to maintain the lowest task in the region and even more remarkable accomplishment, considering our Diversified and more

Complex, sleep. This performance underscores, our structural cost advantage and demonstrates. The effectiveness of the measures implemented during the restructuring process. I just want to repeat, we have the lowest unit cost in the region.

Beyond the improvements in our cost structure. We also have continued to strengthen 1 of the most important foundations of our business, our Fleet attorneys of slide 8. You will see the significant progress we made in modernizing and optimizing our Fleet mix. We reduced our E1. Fleet by 31% year-over-year. While increasing our E2, Fleet by more than 40%.

John Rodgerson: Even with the youngest and most modern fleet in the region, we permanently reduced lease payments by more than 30%. Youngest fleet with a 30% reduction in lease payments, which will provide meaningful and recurring support to Azul's cash flow generation going forward. Alongside the modern fleet, we also strengthened the foundation of our network. On slide 9, you can see how we continue to reinforce our strategic hubs while reducing our exposure to low-margin routes. Our main hubs, Campinas, Recife, and Belo Horizonte, are located in regions with strong business demand, higher income populations, and a significant concentration of corporate travelers. These markets deliver more stable demand patterns, support higher yields, and provide a stronger mix of premium customers compared with leisure-focused hubs.

As a result. We ended the first quarter with almost 93% of our domestic capacity coming from NextGen aircraft considerably higher than any competitor in the region. This Modern and efficient Fleet is what enables us to serve all of Brazil with minimal overlap and unmatched. Network breath.

Even with the youngest and most modern fleet in the region, we

Permanently reduced leap, lease payments, by more than 30%, youngest Fleet, with a 30% reduction in lease payments, which will provide meaningful and recurring support to azules cash flow generation. Going forward alongside the modern Fleet. We also strengthen the foundation of our Network on slide 9. You can see how we continue to reinforce our strategic. Hubs, while reducing our exposure to low margin routes, our main hubs campaigns receive the in bellah Horizonte are located in regions, with strong business demand, higher income populations. And the significant concentration,

Of corporate Travelers.

John Rodgerson: In addition, our flexible and diversified fleet allows us to match capacity to the right markets, deploy the ideal aircraft for each demand profile, and maximize connectivity and operational efficiency across the network. This flexibility is even more important in this volatile fuel environment. This hub-focused strategy enhances connectivity, improves aircraft utilization, and strengthens yields while enabling more rational deployment of capacity. Ultimately, this disciplined approach allows us to maximize profitability and further increase the efficiency of our network. Our disciplined network strategy is just one part of the story. We also benefit from the portfolio of business units that consistently generate premium revenue and highly predictable cash flows. On slide 10, you will see the businesses that we have as an additional layer of strength and stability to Azul continuing to make meaningful contributions to our results and representing 23% of our RASK in the quarter.

These markets deliver more stable, demand patterns support, higher yields and provide a stronger mix of Premium customers compared with Leisure focused. Hubs

In addition, our flexible and diversified Fleet allows us to match capacity to the right markets. Deploy the ideal aircraft for each demand profile, and maximize connectivity, and operational efficiency across the network. This flexibility is even more important in. This volatile fuel environment,

This help, Focus strategy, enhances connectivity, improves aircraft utilization, and strengthens yields while enabling more rational deployment of capacities capacity. Ultimately, this discipline of approach allows us to maximize profitability in further increase the efficiency of our Network.

John Rodgerson: Moving to slide 11, I am proud to report that we already over-delivered on our restructuring commitments. We executed a disciplined and comprehensive de-leveraging process that has already materially strengthened our balance sheet. Lease liabilities down 42% year-over-year, reflecting the structural improvements achieved in our lease payment profile. Loans and financing decreased almost 40%, driven by consistent debt reduction throughout the period. As a result, leverage improved by over 3 turns, reaching 2.0x when using cash plus credit card receivables, or 2.3x when using cash plus all short-term receivables. This represents a substantial improvement from the 5.5x leverage we were in Q1 2025. Lower leverage significantly reduces financial risk and interest burden, while positioning Azul for sustainable long-term value creation, supported by strong operating cash flow generation.

Our discipline Network strategy is just 1 part of the story. We also benefit from the portfolio of business units that consistently generate premium revenue and highly predictable. Cash flows on slide 10. You will see the businesses that we have as an additional layer of strength and stability to azool, continuing to make meaningful contributions to our results and representing 23% of our Ras in the quarter.

John Rodgerson: With our leverage improving significantly and our balance sheet now much stronger, we also made important progress in reshaping our debt profile. Turning to slide 12, you can see that we now have an attractive financial debt maturity schedule supported by almost $1 billion in immediate liquidity, with no meaningful repayments expected until 2031 when our exit financing comes due. The exit financing is the only major debt in our capital structure, giving us exceptional visibility and stability over the long term. I also want to remind everybody of the coupon on that was significantly better than our two peers in the region. We were able to permanently reduce inter-interest payments by more than 50%, which supports us on a trajectory to generate consistent free cash flow.

25, lower leverage significantly, reduces Financial Risk. And interest burden, while positioning Azul for sustainable long-term value creation, supported by strong operating cash flow generation,

With our leverage improving significantly, in our balance sheet now much stronger. We also made important progress in reshaping our debt profile turning to slide 12. You can see that we now have an attractive financial debt maturity schedule supported by almost 1 billion dollars in immediate liquidity with no meaningful repayments expected until 2031 when our exit financing comes due, the exit financing, is the only major debt in our capital structure giving us exceptional visibility and stability over the long term. They also want to remind everybody of the coupon on that was significantly better than our

2 peers in the region.

John Rodgerson: On slide 13, you'll see that in Q1, we generated BRL 217 million in recurring free cash flow, and this was achieved in a period that is seasonally weaker. In other words, Azul was free cash flow positive even after paying CapEx, aircraft rent, and interest. In the quarter, our cash flow was negatively impacted by a decrease in ATL as a result of the lower capacity in our growth driven by the war. This impact should be one-time in nature, occurring only as we adjust our capacity levels. As capacity normalizes, ATL should also return to more typical levels. This performance clearly shows that our restructuring was effective and that we are already capturing its benefits. Looking ahead, the ability to generate cash consistently at this level is a strong indication of the sustainability of our business.

We are we were able to permanently reduce in interest payments by more than 50% which supports us on a trajectory to generate consistent free cash flow.

On slide 13. You'll see that in the first quarter. We generated 217 million. In recurring, free cash flow and this was achieved in a period that is seasonally weaker. In other words, Azul is free cash flow positive. Even after paying half backs, aircraft rent, and interest in the quarter. Our cash flow is negatively impacted by a decrease in ATL, as a result of the lower capacity in our growth driven by the war, this impact should be 1 time in nature. As we adjust our capacity levels as capacity normalizes at

Should also return to more typical levels.

John Rodgerson: This cash will continue to be used to de-lever the company and to invest in Azul's long-term strategic priorities. Having demonstrated the strength of our restructuring, our improved debt profile, and our consistent cash generation, we'd like to close by looking ahead. Turning to the last slide, as we mentioned in our forecast results, all the actions we implemented over the past year have made Azul much stronger and more resilient airline. We're uniquely positioned to navigate any macro volatility. At the center of our success is our strong service-oriented culture, a key competitive advantage that consistently differentiates Azul in the Brazilian market. We remain firmly committed to de-leveraging and generating cash. At the same time, we are closely monitoring the impact of higher fuel prices. Our strong fundamentals allow us to navigate this environment from a position of strength. We implemented strategic pricing actions across our network.

This performance clearly shows that our instruction was effective and that we are already capturing its benefits. Looking ahead, the ability to generate cash. Consistently at this level is a strong indication of the sustainability of our business.

This cache will continue to be used to deliver the company. And to invest in azules, long-term, strategic priorities, having demonstrated the strength of our restructuring, our improved debt profile and our consistent cash generation. We'd like to close by looking at turning to the last slide. As we mentioned in our Fork view results, all the actions, we implemented over the past year have made a zul much stronger and more resilient Airlines and we're uniquely positioned to navigate any macro volatility at the center of our success is our strong service oriented culture, a key competitive advantage, that consistently differentiate differentiates, the zoo in the Brazilian Market. We remain firmly committed to do leveraging and generating cash.

John Rodgerson: We also adjusted capacity and optimized our network to focus on the most profitable markets. This is only possible because of our diversified and flexible fleet. In parallel, we're maintaining strict cost control and reinforcing strong cash management discipline to protect liquidity. Together, these actions help ensure that Azul can protect margins and navigate the current fuel and macro volatility. I want to once again thank all of our crew members, partners, investors, and customers for their support and trust in Azul. With that, Antonio, Abi, and I are available to take any of your questions.

At the same time, we are closely monitoring the impact of higher fuel prices. Our strong fundamentals, allow us to navigate this environment from a position of strength. We implemented strategic pricing actions across our Network. We also adjusted capacity and optimize our Network to focus on the most profitable markets.

This is only possible because of our Diversified and flexible. Fleet in parallel. We're maintaining strict cost control in reinforcing, strong cash management.

Discipline to protect liquidity together. These actions help ensure that Azul can protect margins and navigate the current fuel and macro volatility. I want to once again thank all of our crew members, partners, investors, and customers for their support and trust in Azul. With that, Antonio, Abby, and I are available to take any of your questions.

Zach: Ladies and gentlemen, thank you. We will now begin the Q&A session, remembering that if you have a question, click on the Q&A icon at the bottom of your screen and write your name and company. When your name is announced, please activate your microphone and proceed. For those who are listening to the conference on the phone, press 9 to join the queue and 6 to accept the audio when requested. Moving on to the first question will come from Savanthi Syth, Sell-Side Analyst, Raymond James. Savi, we're going to open your microphone, so you may ask your question. Please proceed.

Ladies and gentlemen, thank you.

We will now begin the Q&A session. Remembering that if you have a question, you can a Q&A icon at the bottom of your screen and by your name and Company. When your name is announced, please activate your microphone and proceed for those who are listening to the conference on the phone. Press 9 to join the queue and 6 to accept the audio when requested

Moving on to the first. Question will come from Services, sales, side, analysts, Raymond, James Savvy. We're going to open your microphone, so you may ask your question, please proceed.

Savanthi Syth: Hey, good morning, everybody. Thank you. Antonio, welcome to this side of the aviation business.

John Rodgerson: Thank you.

Savanthi Syth: Maybe for Abi, you know, obviously the focus here is fuel is higher, even though it's volatile day to day. Just curious, you know, what you're seeing in terms of success in kind of fare increases both in the domestic and international markets?

Hey, good morning everybody. Thank you. And uh and and Sonia, welcome to the side of the aviation business.

Abhi Shah: Hey, Savi. Thanks. Obviously we anticipated this question, so I will give a slightly longer answer, and I will try to cover everything here because obviously one of the most important questions today. First of all, it starts with network and capacity, right? As John and Antonio said, we continued focus in our network. Close to 90% of our capacity, we are either alone or we are dominant, right? We already have a very privileged network position, and I will talk a little bit later how that translates into fare resilience. Because there is a difference in the fare resilience and the demand resilience in our network versus what we are seeing in the competitive markets. That's first, number 1. Second, as you know, we already had a very conservative growth profile for this year, +1 overall.

Maybe for for Obby, you know, obviously the the focus here is uh fuel is higher uh even though it's volatile day-to-day. So just curious, you know what you're seeing in terms of uh success in kind of fare increases. Both in the domestic and international markets.

Abhi Shah: Q1 was -2.7. In addition to that, we've already made capacity adjustments for May and June. We've taken about 5% capacity out for May and June, and we will strategically roll that forward as needed. That +1, that was the public plan on exit most likely is now gonna be negative for the whole year, right? We've already been very, very proactive, and I think we were the first to move overall in that, in that space. Also helping us right now is our international fleet replacement. The timing actually could not have been better. That's reducing our fuel exposure kind of over the next 3 to 6 months, which should be the peak of the fuel prices.

In the fair resilience and the demand resilience in kind of our Network versus what we are seeing in the competitive markets. That's first number 1. Uh, second as you know, we already had a very conservative growth profile for this year. Plus 1 overall. Um, um, first queue was minus 2.7. Uh, and in addition to that, we've already made capacity, adjustments for May, and June, we've taken about 5% capacity out for May and June, and we will strategically roll that forward as needed. So that plus 1, that was the public plan on exit. Most likely is now going to be negative for the whole year, right? So we've already been very, very proactive and I think we were the first to move overall, uh, in that, in that space. Um,

Abhi Shah: From a first point on a capacity perspective, we are really well-positioned, and I think we don't have to do anything stupid. We don't have to take airplanes that we don't want. The fleet is very disciplined as well. That really gives us a lot of confidence on the next topic, which is the most important, which is average fares. The industry has done, I think, a good job in showing a lot of urgency. Nine fare increases since 28 February, 8 of them 10%, 1 of them 15% compared to last year, only 3 fare increases last year versus 9. Clearly a lot of urgency, which is good. That's taken average fares up, right? Last time when we talked, I said we were over 20% booked average fares.

Also helping us right now is our International Fleet replacement, uh, the timing actually could not have been better, so uh, that's reducing our fuel exposure kind of over the next 3 to 6 months which should be the peak of the fuel prices. So from a first point on a capacity perspective, we are really well positioned. Um, and I think we don't have to do anything stupid. We don't have to take airplanes that we don't want. Uh, the the fleet is very, very disciplined as well, so that really gives us a lot of confidence on the next topic, which is the most important, which is average fairs.

Abhi Shah: Right now we're over 30% booked average fares. Domestic is higher than that. International is lower than that. Makes sense. Domestic, you have a lot more close-in demand, corporate demand. The booking curve is much closer in, you can actually effectuate the higher fares much quicker. International takes longer with the booking curve, also the absolute numbers are a lot higher, right? That's taking a little bit more time. Right now we're at +30% booked average fares, higher domestic, lower international. In terms of revenue performance, some interesting cuts here to give you some perspective. Close-in travel agency bookings are doing well, being able to absorb these fare increases. We are pushing 30% corporate revenue share in Brazil. Our capacity share is a lot lower than that.

Um, the industry has done. I think a, a, a good job in showing a lot of urgency, uh, 9 Fair increases since February 28th. Uh, 8 of them, 10% 1 of them, 15% over the, uh, compared to last year. Only 3 fare increases last year versus 9, so clearly a lot of urgency, which is good, um, and that's taken average fairs up, right last. Last time when we talked, I said, we were over 20% booked average fairs right now. We're over 30% booked average fairs domestic is higher than that. International is lower than that.

Uh makes sense domestic. You have a lot more close in demand uh corporate demand. The booking curve is much much closer in so you can actually effectuate

The higher fairs, uh, much quicker International takes longer with the booking curve and also, the absolute numbers are a lot higher, right? So that's taking a little bit more time. So right now, we're at plus 30% booked average fairs higher domestic lower International in terms of Revenue performance. Some interesting Cuts here to give you some perspective, uh, close in travel agency bookings, uh, doing well, uh, um, being able to absorb these fare increases

Abhi Shah: We're doing well in that space. Our business units, vacations especially, is actually doing quite well. Positive year-over-year even with the fare increases, that's doing good. Fidelidade loyalty is doing well. Where we are struggling, I think that's probably common, overall, is the further out APs leisure demand that's booking directly into our web and our app. Last time I said those customers were waiting. They're still kind of waiting, to be honest, we're able to make that up specifically with our business units. Overall, we're positive revenue, remember, we are negative capacity, right? That bodes really, really well for our unit revenue expansion going forward. One last slide on the bookings. Azul markets versus competitive markets. A lot more fare resilience in our markets.

Uh, we are pushing, uh, 30% corporate Revenue, share in Brazil. Our capacity share is a lot lower than that, so, uh, we're we're, we're doing well in that space. Our business units, um, vacations, especially is actually doing quite well, uh, positive year-over-year even with the fare increases. So, that's doing good fidela. Daji loyalty is doing well, where we are struggling and I think that's probably common. Uh, overall is the further route APS Leisure demand, that's booking directly into our web and our our app.

Abhi Shah: Obviously because we control, we decide that, we're seeing a much steadier curve in our hubs and our markets. In the competitive markets, São Paulo and Rio, we're seeing a lot more oscillations in the fares. They spike up, we kind of give it back, they spike up again. We kind of give it back again. It's kind of happened two or three times already. You can kind of notice this if you just search Google Flights or anything on any weekday afternoon, you kind of see those changes. Look, the way we are positioned in our network with our fleet, with our capacity posture, we couldn't be better positioned for this. You know, looking ahead, we see kind of strong unit revenue expansion going forward.

Uh, last time I said those customers were waiting, they're still kind of waiting to be honest, but uh, we're able to make that up specifically with our business units. So overall, we're positive revenue. And remember, we are negative capacity, right? So that both really, really well for our unit Revenue expansion, going forward, uh, 1 last slice on the bookings, Azul markets versus competitive markets. Um, a lot more fair resilience in our markets again, obviously, because we we control, we decide that. So we're seeing a much steadier curve uh, in our hubs and our markets uh, in the competitive markets. I'll follow and Rio. We're seeing, uh, a lot more oscillations in the fairs they Spike up and then we kind of give it back and then they spiked up again. We kind of give it back again. It's kind of happened 2 or 3 times already and and you can

Savanthi Syth: Thanks, Abhi. I think you answered like five or six questions there, I'll turn it back. Appreciate it.

We kind of noticed this if you just search Google flights or anything on any weekday afternoon, you you kind of see those changes. So look the the way we are positioned in our network with our Fleet with our capacity posture. Uh we couldn't be better positioned for this and uh you know looking ahead. We see kind of strong unit Revenue expansion going forward,

Thanks.

I think you answered like,

I'll turn it back. Appreciate it.

Abhi Shah: Thank you.

Zach: Thank you. The next question now comes from Guilherme Mendes, Sell-Side Analyst from J.P. Morgan. Guilherme, we're gonna open your microphone so you may ask your question.

The sales side analysts from JP Morgan. If you let me, we're going to open your microphone so you may ask your question.

Guilherme Mendes: Yes. Good morning, all. Thank you for the space and best wishes, Antonio, on your new role. My first one, it's kind of a follow-up. It was very clear. Thank you, Abi. In the Q4 call, you mentioned about 8% target to increase unit revenues to kind of offset the fuel curve that you were seeing back then. Can you provide kind of updated figure that would compare to this 8% increase from RASK for the year, please? The second point is on, let's call it shareholder structure. If there's an update on the ADR releasing and also on the cancellation of the warrants that was announced in April. Thank you.

Operator: Ladies and gentlemen, thank you. We will now begin the Q&A session, remembering that if you have a question, click on the Q&A icon at the bottom of your screen and write your name and company. When your name is announced, please activate your microphone and proceed. For those who are listening to the conference on the phone, press 9 to join the queue and 6 to accept the audio when requested. Moving on to the first question will come from Savanthi Syth, Sell-Side Analyst, Raymond James. Savi, we're going to open your microphone, so you may ask your question. Please proceed.

Yes, good morning. Oh thank you for the space and and best wishes Antonio on your new role. Uh, my first 1, it's it's kind of a follow-up. It was already very clear. Thank you. Abby but in in the fourth quarter call, you mentioned about 8% Target to increase unit revenues to kind of offset. The few curve that you're seeing back then uh can you provide kind of updated figure that would compare to the 8% uh increase on Ras for the year please? And and the second point it's on let's call it a shareholder structure. Uh, if there's an update on the ADR released in uh, and also on the cancellation of the warrant that it was announced in in in April, thank you.

Abhi Shah: Yeah. Let me start with the unit revenues. What I mentioned on the Q4 call was we need to have about 8% above plan, right? To recapture fully the Fuel cost increase year-over-year, that because there was already a year-over-year RASK improvement built into the plan. The number that you should be looking for in terms of year-over-year RASK increase kind of going forward, and I think this is pretty similar to most airlines given the fuel curve, which is a very, very high curve right now in Q2 and the curve comes down in Q3 and Q4, is gonna be about year-over-year, about 12%. 12% to 15% is what I think airlines will require.

Savi Syth: Hey, good morning, everybody. Thank you. Antonio, welcome to this side of the aviation business.

John Rodgerson: Thank you.

Savi Syth: Maybe for Abi, you know, obviously the focus here is fuel is higher, even though it's volatile day to day. Just curious, you know, what you're seeing in terms of success in kind of fare increases both in the domestic and international markets?

Yeah, let me start with the unit revenues. What I mentioned on the fourth quarter call was we need to have about 8%, uh, above plan right to to, to recapture fully the, um, fuel cost increase year-over-year, uh, that because there was already a year-over-year Ras Improvement built into the plan. Uh, the number that you should be looking for in terms of year-over-year, Rask increase, kind of going forward. And I think this is pretty similar to, uh, most Airlines given the Fuel Curve, which is a very, very high curve right now, in 2q. And the curve comes down in 3, q and 4 q. Uh, is going to be

Abhi Shah: I think we have good visibility right now in Q2 to achieve that number. A little bit of caveat with World Cup, because World Cup is a huge distraction in Brazil. We'll see how that goes. Q3, Q4, I think everybody's gonna need around that number. When you combine the fuel curve that's right now it's a peak, it's coming down Q3, Q4. If we're able to maintain about a 12% to 15% year over year unit revenue, then we will be able to recapture exit rate 2026, 90% plus of the impact, and that puts us in a very, very good position for actually higher earnings in 2027.

About with year-over-year about 12%, 12 to 15% is what I think Airlines will require.

Antonio Garcia: Guilherme, Antonio speaking here. In regards to the releasing, we are preparing ourselves here to release with our ADR program within the coming weeks, probably to end of May, is more or less what we are foresee right now. Can be changed one week before or later, it's more or less the time window that we are seeing right now. In regards to warrants, John-

I think we have good visibility right now in 2q uh to achieve that number a little bit of caveat with World Cup because World Cup is a huge distraction in Brazil. We'll see how that goes. And then uh 3 q 4 q, I think everybody's going to need around that number. So when you combine the Fuel Curve that's right now. It's a it's a peek. It's coming down, 3, Q4 Q, if we're able to maintain about 12 to 15% year-over-year unit Revenue, then we will be able to recapture exit rate, 2026, 90% plus of the impact. And that puts us in a very, very good position for actually higher earnings in 2027

So, bear with me. I'm trying to speak here in regards to the releasing, uh,

We are preparing ourselves here to release with our HR program is in the coming weeks, probably to end of May is more or less. What we are first seeing right now. Can be changed 1 week before or later, but this is more or less. The time. We know that we are seeing right now and

John Rodgerson: Yeah, let me just add to what Antonio said. Antonio and I will both be in New York next week. It's Brazil Week. We're gonna be out talking to investors, telling the story, prior to our listing. As for the warrants, we'll be updating the market shortly with news on that.

If you got your warrants John. Yeah let me just add to what Antonio said Antonio and I will both be in New York next week. It's Brazil week. We're going to be out talking to investors uh telling the story um prior to our prior to our listing. As for the warrants uh we'll be updating the market shortly with news on that.

Guilherme Mendes: Very clear. Thank you all. Thank you.

Very clear. Thank you. All

Thank you.

Zach: Thank you. Moving on to the next question, comes from Lucas Barbosa, sell side analyst for Santander. Lucas, you may ask your question.

Thank you. Moving on to the next question. Comes from Lucas Baza.

Sales site analyst for Santana, Lucas, you may ask your question.

John Rodgerson: Lucas, you may be on mute. Let's go to the next question.

Lucas, you may be you may be on mute.

Zach: All right. Okay. Let's move on to the next question will come from Matheus Santana, Sell-Side Analyst, Bradesco BBI. Matheus, we're gonna open your audio, so you may ask your question, please.

Let's go. Let's go to the next question. All right. Okay, so let's move on to the next question. We will come from matil Santana, Southside analyst, but I basically be Ms. We're going to open your auto so you may ask your question, please.

Matheus Santana: Hello, good morning. Thank you for choosing my question, and welcome, Antonio, to your first call here. I just want to ask one year about the fleet plan. You know, you see the growth is going to be lower than expected, so a reduction. Are you planning on changing anything related to the fleet plan, and what are the changes expected? Thank you.

Abhi Shah: Yeah, Matheus. You know, as you remember from our exit plan, we actually modified our fleet plan exactly for this reason. Of course, we didn't know it was going to happen, but you know that we kept talking about a resilient business model. One part of that was reducing our future orders to give us a lot of flexibility, right? We actually only have 3 E2s, 4 E2s coming this year. One is going to be coming in June, 3 the H2 of the year. The fleet plan is only 5 E2s per year, right? That was the fleet plan post-restructuring. We are very comfortable with that fleet plan. As of now, there is no changes because it is a very conservative plan compared to, you know, airlines that are taking dozens of aircraft per year, if you will.

Hello, good morning. Thank you for choosing my question, and welcome. I'm going to show you your first call here. So I just wanted to ask 1 here about the fifth plan. You know, you see the capacity is going to be the growth is going to be lower than expected. I could show a reduction, so are you planning on changing anything related to the free plan? And what are the changes expected? You know, thank you.

Yeah. How much so you know as you remember from our exit plan our we actually modified our Fleet plan

Uh that was the fleet plan uh uh post restructuring. So we're very very comfortable with that Fleet plan and uh as of now there's no changes because it's a very concerned

Abhi Shah: That gives us a lot of flexibility and a lot of opportunity to take advantage of the market.

John Rodgerson: Yeah, I don't think it's any secret, no airline wants to be taking 20, 30, 40 aircraft this year, right? What we learned over the past few years is you make a fleet decision well in advance, and you don't know what's going to happen. You don't know if COVID is going to hit, you don't know if there's going to be a war in the Ukraine, you don't know about a Middle East crisis that doubles fuel prices. You know, our ability to adjust capacity, you know, we are very excited about how we're positioned in the market right now.

Compared to, you know, airlines that are taking dozens of aircraft for a year, if you will, and that gives us a lot of flexibility and a lot of opportunity to take advantage of the market. Yeah. I I I don't think it's any secret. No Airline wants to be taking 20, 30 40 aircraft this year, right? And and and what we learned over the past few years is you make a fleet decision well in advance and you don't know what's going to happen. You don't know if seos going to hit, you don't know if there's going to be a war in the Ukraine. You don't know about a Middle East crisis, that doubles fuel prices. And so, you know, our ability to adjust capacity, you know, we are very excited about how we're positioned in the market right now.

Matheus Santana: Clear. Thank you.

Thank you.

Zach: Thank you. Moving on to the next question, coming from Pedro Tineo. Pedro, Sell-Side Analyst from Itaú BBA. We will open your audio, you may ask your question.

Thank you, move you on to the next question coming from Pedro til Pedro, uh, Southside analyst from mvva, where we will open your auto. So you may ask your question.

Pedro Tineo: Hey, thanks for taking our question. Antonio, we're wishing you the very best here at Azul. I just wondered if you guys could comment, we've seen a lot of meaningful price increases, without a corresponding loss in volumes for the past years. Do you guys think that this trend could continue in a scenario of higher oil prices environment? That's it from our side. Thank you, guys.

Hey, thanks for taking our questions. And Antonio, we're reaching you with the very best here at Azu, um,

Abhi Shah: It has to continue, to be honest. That's why our capacity position and our network position is so important, right? That's why it gives us the confidence to allow us to do that. We can already see the results in terms of the fare resiliency, as I called it, and the discipline that's being maintained in our markets and versus the competitive markets. This is not just us, it's everybody, you know, here and around the world, right? I'd much rather be in our situation where we have such a privileged network position. We already started with a low growth model. We have a really kind of flexible fleet plan going forward. The answer is yes. If you asked me in 2019, would unit revenues be at BRL 0.45, right?

I just wondered if you guys could comment, uh, we've seen a lot of meaningful price increases, uh, with other corresponding loss in finance for the past years. Uh, do you guys think that this trend could continue in a scenario of higher order, price, and environment? That's it from our side. Thank you guys.

Um it has to continue to be honest and and that's why our capacity position and our Network position.

Savi Syth: Thanks, Abhi. I think you answered like five or six questions there, I'll turn it back. Appreciate it.

Abhi Shah: Thank you.

Operator: Thank you. The next question now comes from Guilherme Mendes, Sell-Side Analyst from J.P. Morgan. Guilherme, we're gonna open your microphone so you may ask your question.

Abhi Shah: That was not heard of. In fact, we've been able to generate a 7% CAGR over the last several years on a consistent basis while we were growing. You know, absolutely we should be able to do that with a lower growth model. I think customers might take some time to get used to it. That's why you need time to recover. Given our network position, given our capacity posture, I think we are in the best possible position to make that happen.

Uh is so important, right? And that's why it gives us the confidence to allow us to do that. And we can already see the results in terms of the fair resiliency, as I called it in the discipline, that's being maintained in our markets and versus the competitive markets. So and this is not just us, it's everybody, you know, here and around the world, right? So, uh, I'd much rather be in our situation where we have such a privileged Network position. We already started with a low growth model, uh, and we have a really kind of flexible Fleet plan going forward. So the answer is yes. If you asked me in 2019 uh would would unit revenues be at 45 cents, right? That was not heard of, in fact, uh we've been able to generate a 7% kegger over the last several years on a consistent basis while we were growing. So you know, absolutely. We should be able to do that uh, with a lower growth model. So,

Antonio Garcia: Pedro, just to complete. Sometimes crisis brings also opportunity. I do see the company here well prepared to navigate in this environment we are right now, comparing a few others that we are seeing outside Azul here.

I think customers might take some time to get used to it. That's why you need time to recover but given our Network position given our capacity posture, uh we I think we are in the best possible position to make that happen.

Uh, pay the gesture complete and sometimes crisis brings also opportunity. I do see the company here. Well, prepared to navigate in this environment we are right now. Comparing a few others that we are seeing outside the zoo here.

Pedro Tineo: That's perfect. Thanks, guys.

Antonio Garcia: Thank you.

Abhi Shah: Thank you.

That's perfect. Thanks guys.

Thank you.

Zach: Okay, moving on to the next question will come from Michael Linenberg, sell-side analyst for Deutsche Bank. Michael, we will open your microphone so you can ask your question, please.

Okay. Moving on to the next question, will come from Michael Lindberg, Southside analyst for D Bank. Michael, we will open your microphone so you can ask your question please.

Shannon Doherty: Hi, good morning. This is Shannon Doherty on for Mike. You know, the delivery has been great. Can you guys update us on what your leverage target is for the end of this year? Have your liquidity and leverage ratio assumptions meaningfully changed, you know, with the spike in fuel?

Oh, hi, good morning. This is

Already on.

yeah, the delivering

some leverage for you is for the end of this year and have your liquidity and leverage ratio assumptions meaningfully changed, you know, with the spike and fuel.

John Rodgerson: Yeah, Shannon, we have our plan that's public and, given the volatility in the market, you know, we're not coming out yet, but we're obviously gonna be on the road in the next couple of weeks, and we'll be providing guidance. A couple of things, right? You've had a fuel price increase. The dollar traded at BRL 4.98 today, right? You know that's a significant improvement overall. You know, I think there's some puts and takes. Obviously, you know, it takes some time to get all of the revenue back. When you look at the fuel curve, the fuel curve is a Q2 spike, right? Everybody has a fuel curve coming down significantly. That's gonna impact the Q2. Our mission has not changed.

Yeah. Shannon, um, we have our plan that's public and, um, you've given the volatility in the market, you know, we're we're not coming out yet, but we're obviously, we're going to be, um, on the road in the next couple of weeks and we'll be providing guidance, but I think a couple of things right, you've had a fuel price increase but you've also the dollar traded at 498 today right? And and you know, that's a significant Improvement overall. And so, you know, I think there's some puts and takes obviously, you know,

John Rodgerson: We are going to deliver this business. We're gonna significantly deliver the business over the next couple of years. Antonio has a mission that he's committed to the board. We wanted to have the lowest leverage in the region. That's it.

Antonio Garcia: I would say there is no decision to worsening the debt ratio to end of this year. We are fighting to get the same as we agreed.

Take some time to get all of the revenue back. And when you look at the Fuel Curve, the Fuel Curve is a second quarter Spike, right? And and everybody has a Fuel Curve coming down significantly. And so that's going to impact the second quarter, but our mission has not changed. We are going to deliver this business. We're going to significantly deliver the business over the last over the next couple of years. And Antonio has a mission that he's committed to the board. We wanted to have the lowest leverage in the region, that's it. I would say there is no decision to worsen it that that quickly depth to racial to end of this year. We are fighting to get the same as we agreed.

Shannon Doherty: Great, thank you for that. Maybe one for Abhi Shah. You know, you've given a lot of color on Azul markets, but what are you seeing on the competitive capacity front? You know, do you expect to see some of your peers cut capacity in H2? Thanks.

Guilherme Mendes: Very clear. Thank you all. Thank you.

On the competitive capacity front, do you expect to see some of your previous capacity in the second half?

Abhi Shah: I'm definitely watching it. Let me just say that. Do I think it's enough? No. Obviously, I don't think it's enough. If you look around the world, you see some of the highest growth rates here in Latin America, to be honest, right? You have guys like United talking about cutting capacity, and other airlines. You know, even Delta cut like 3% in June or something like that, right? I think there's more work to be done in this region. I think we've led it, obviously, from our post-restructuring plan and also what we've already done. We're not really looking sideways. I think we're really comfortable with where we are and the strengths that we have.

Uh,

Operator: Thank you. Moving on to the next question, comes from Lucas Barbosa, sell side analyst for Santander. Lucas, you may ask your question.

I'm definitely watching it. Uh, let me just say that.

John Rodgerson: Lucas, you may be on mute. Let's go to the next question.

Abhi Shah: You know, I think that our market is just a lot more resilient, and the other markets are oscillating, and I think that will drive the capacity cuts that are required, to be honest.

Operator: All right. Okay. Let's move on to the next question will come from Matheus Santana, Sell-Side Analyst, Bradesco BBI. Matheus, we're gonna open your audio, so you may ask your question, please.

Do I think it's enough know? Obviously, I don't think it's enough. Uh, but uh if you look around the world, you see some of the highest growth rates here in here in Latin America, to be honest, right? Uh, you have guys like United talking about cutting capacity, um, and other airlines, you know, even Delta cut like 3% in June or something like that, right? So I think, um, I think there's more work to be done in this region, I think we've LED it obviously from our post restructuring plan and also what we've already done, but we're not really looking sideways. I think we're really comfortable with where we are and the strength that we have. And, uh,

John Rodgerson: If I just add, the best run airlines in the world have cut capacity. That's a fact across the board. A little bit back to the previous question that we had, which was we have flexibility and resilience in how we built the model. Unfortunately, airlines buy aircraft well in advance, and they're delivering into a Middle Eastern crisis, and it's a bit harder to take capacity out when you're taking new metal with high ownership costs. Again, I want to reiterate, our ownership cost is down by 30% permanently, and we have a much more flexible fleet plan going forward. Allows us to react. As Abhi Shah said, we're not looking to the left and to the right. We're looking forward, focusing on our markets where we can generate cash.

And, you know, I think that our Market is just a lot more resilient. Uh, and the other markets are oscillating and I think that will drive the capacity cuts that are required, to be honest that if I just add the best run airlines in the world have got capacity, that's a fact across the board and a little bit back to the previous question that we had which was we have flexibility and resilience and how we built the model. Unfortunately Airlines buy aircraft well in advance and their delivery into a middle eastern crisis and it's a bit harder to take capacity out when you're taking new metal with high uh ownership costs. Again I want to reiterate our ownership cost is down by 30.

30% permanently, and we have a much more flexible Fleet, plan going forward, allows us to react, but as Abby said, we're not looking to the left and to the right we're looking forward focusing on our markets where we can generate cash.

Shannon Doherty: Thank you.

Thank you.

Zach: The next question comes from Nicholas, sell-side analyst, Jefferies. Nicholas, we will open your microphone so you may ask your question.

The next question comes from Nicholas. Southside analyst, Jeffrey, Nicholas. We will open your microphone. So you may ask your question.

Nicholas: Hi. Yes, good morning. Thank you for the call. Welcome, Antonio, to the team. I just wanted to ask here on liquidity. Please, if you could give us an update on the government credit lines. I believe there are three, the FGE, the FINAME, and the more recent fuel installments payment plan. If you can give us an update on those three sources of liquidity. Then just on the American ACAGI approval process, timeline, any updates. Lastly, on TAP. It would be helpful just to have an update here on these liquidity measures as we think about liquidity through the end of this year. Thank you.

Abhi Shah: That gives us a lot of flexibility and a lot of opportunity to take advantage of the market.

Uh, yes, good morning. Thank you for the call. Uh, uh, welcome Antonio to the team. Um, I I just wanted to ask here, um, on on the liquidity. Um, please, if you could, uh, give us an update on the government, uh, credit lines. I believe there are 3, uh, the the FG, the fak and the more recent, uh, fuel installments payment plan. Uh, if you can, uh, uh, give us an update on on those 3, uh, sources of liquidity. And then just on the American, uh, akagi approval process timeline any updates

John Rodgerson: Thanks, Nicholas. You hit them all right there. I'll start and then pass it over to Antonio. First of all, we ended Q1 with more cash than we thought, right? We upsized the exit financing, so we feel very comfortable where we are right now. We have just under $1 billion in available liquidity. We Immediately liquidity, so we feel very good about our starting position going into things. Other things that I highlighted, our plan was at 550. The exchange right now is at 498, right? You have seen the government be very proactive. They do not wanna see capacity cuts in the market, right? The government has done a lot of things.

And lastly on, uh, tap. Uh, so so it would be helpful, just um, have an update here on these, uh, liquidity measures as we think about uh uh uh liquidity through the end of this year. Thank you.

Matheus Santana: Clear. Thank you.

Operator: Thank you. Moving on to the next question, coming from Pedro Tineo. Pedro, Sell-Side Analyst from Itaú BBA. We will open your audio, you may ask your question.

John Rodgerson: There's a lot of, you know, different lines that we're looking at as an industry. We see that as a positive thing. They're acting in a very proactive manner. I think that's exciting. As for TAP, they owe us the money. They know they owe us the money. Everybody knows they owe us the money. I think that there's a commercial relationship with TAP that we continue to have, and they're in a privatization process as we speak. You know, we're excited to, you know, get that resolved later this year. We, you know, we think that a friendly solution is always the best resolution to something, especially as they're in a privatization process. In many cities in Brazil, we have a number one connecting partner for them.

Thanks Nicholas. You, you hit them all right there. So I'll start and then and then pass it over to Antonio first of all. We ended the first quarter with more cash than we thought, right? We upsized the the exit financing. So we feel very comfortable where where, where we are right now, we have just under a billion dollars in in available liquidity and so we we immediately. So we feel very good about our starting position, go going into things. Um, other things that I highlighted our plan was at 550. The Exchange right now is at 498, right? And so you have seen the government be very proactive, they do not want to see capacity Cuts in the market, right? So the government has done a lot of things. There's a lot of um, you know different lines that we're looking at as an industry and we see that as a positive thing, they're acting in a very proactive manner. So I I think that's that that's exciting. As for Taps, they owe us the money. They know they owe us, the money, everybody knows they owe us the money. And so, um, I think that there's a commercial relationship with tap that with that. We continue to have and they're in

John Rodgerson: I'll pass it over to Antonio, because, you know, there's the government. There's a lot of things happening, and a de-levered balance sheet just opens up tremendous opportunities for us.

Antonio Garcia: Thanks, John. Nicholas, thanks for the welcome. In regards to the lines of credit, we are back on the street after the Chapter 11, it's not only the government line, but we have the other bankers also in on discussion right now. We are evaluating the best options for Azul to get this money, either for the government or for the private banks, I would say. I'm sure we will have access based on my previous experience, for those line in the still this year.

A lot of privatization process as we speak. And so, you know, we're we're excited to, you know, get that resolved later this year and and, you know, we think that a friendly solution is always the best resolution to something especially as they're in a privatization process and and in many cities in Brazil, we have a number 1 um connecting partner for them. But I'll I'll pass it over to Antonio because you know, there's the government. There's a lot of things happening and and a de-lever balance sheet, just opens up tremendously.

Opportunity for us. Yeah. Thanks John. Nicholas. Uh thanks for the, the welcome. And in regards to the the lines of credit, we are back on the street after the chapter 11 and it's not only the government line, but you have the other Bankers also in on discussion right now and we are evaluating the best options for the, for a zoo to get this money. Either for the government or for the, the private Banks, I would say, uh, I'm sure we have access based on my previous experience. Uh, for those line in the is still this year.

Zach: Okay. This concludes the Q&A session for today. We will now turn the call to John so that we can make the closing remarks, please.

Pedro Tineo: That's perfect. Thanks, guys.

Antonio Garcia: Thank you.

Abhi Shah: Thank you.

Okay, this concludes the Q&A session for today. We will now turn to a call to John so that we can uh, make the closing remarks please.

John Rodgerson: Thanks, everybody, and I just wanna thank everybody. We look forward to seeing people in New York and talking to the investors on the sell side as we prepare the company for our relisting in New York. Thanks, everybody.

Operator: Okay, moving on to the next question will come from Michael Linenberg, sell-side analyst for Deutsche Bank. Michael, we will open your microphone so you can ask your question, please.

Thanks everybody. And I just want to thank everybody. Um, and we look forward to seeing people, um, in New York and talking to the investors and the sell side. As we prepare, the company for our relisting in New York. Thanks, everybody.

Zach: Thank you. This concludes the Azul's audio conference call for today. Thank you very much for your participation, and have a good day.

Thank you. This concludes the Isuzu audio conference call for today. Thank you very much for your participation and have a good day.

Thais Haberli: Goodbye.

Goodbye.

Antonio Garcia: I would say there is no decision to worsening the debt ratio to end of this year. We are fighting to get the same as we agreed.

Abhi Shah: You know, I think that our market is just a lot more resilient, and the other markets are oscillating, and I think that will drive the capacity cuts that are required, to be honest.

Shannon Doherty: Thank you.

Operator: The next question comes from Nicholas, sell-side analyst, Jefferies. Nicholas, we will open your microphone so you may ask your question.

[Analyst] (Jefferies): Hi. Yes, good morning. Thank you for the call. Welcome, Antonio, to the team. I just wanted to ask here on liquidity. Please, if you could give us an update on the government credit lines. I believe there are three, the FGE, the FINAME, and the more recent fuel installments payment plan. If you can give us an update on those three sources of liquidity. Then just on the American ACAGI approval process, timeline, any updates. Lastly, on TAP. It would be helpful just to have an update here on these liquidity measures as we think about liquidity through the end of this year. Thank you.

Operator: Okay. This concludes the Q&A session for today. We will now turn the call to John so that we can make the closing remarks, please.

Operator: Thank you. This concludes the Azul's audio conference call for today. Thank you very much for your participation, and have a good day.

Thais Haberli: Goodbye.