Brazilian carrier’s operating profits jump in Q1, its first quarter since exiting financial restructuring in February.
Azul executives are pointing to a disciplined approach to capacity as supporting continued unit revenue growth after the Brazilian carrier boosted first-quarter operating profits to just over R1 billion ($204 million).
The airline, in its first quarter since exiting US Chapter 11 bankruptcy protection in February, turned a $1.0 billion operating profit, up from R$571 million in the same period last year. Azul cut its adjusted net loss in the first quarter to R$44 million, compared to an R$1.8 billion loss in the first quarter of 2025.
Its revenue for the period was 1.4% higher year on year at R$5.47 billion, despite a 2.7% reduction in capacity compared with the first quarter of 2025.
“Azul made a deliberate decision to reduce capacity and focus on the markets where we generate the highest profitability,” said Azul chief executive John Rodgerson during a first-quarter earnings call on 7 May.
“This disciplined approach is now clearly reflected in our results. Despite operating with lower capacity in the quarter, we delivered record first quarter results on revenue.”
Alongside a major restructuring of its balance sheet and agreements with lessors, Azul also emerged from Chapter 11 with reduced fleet obligations.
“All the actions we have implemented over the past year have made Azul a much stronger and more resilient airline and we are uniquely positioned to navigate any macro volatility,” Rodgerson adds.
Azul’s operating revenue per available seat kilometer increased 4.3% year on year in the first quarter. The airline’s chief revenue officer, Abhi Manoj Shah, says continued capacity discipline and fare resilience across the majority of its network can support further growth.
“We already had a very conservative growth profile for this year,” he says, noting Azul’s original expectation was to increase capacity 1% for 2026. “We have already made capacity adjustments for May and June. We have taken about 5% capacity out for May and June, and we will strategically roll that forward as needed.
“From a capacity perspective, we are really well positioned,” Shah adds, noting the airline’s capacity will likely be negative year on year for all of 2026.
He points to the carrier’s modified fleet plan as supporting its disciplined approach. “We only have four [Embraer] E2s coming this year – one in June, three the second half of the year – and then the fleet plan is only five E2s a year,” he says. “So we are very comfortable with that fleet plan.”
Shah also flags stronger fare resilience in markets where Azul maintains a strong competitive position.
“Overall we are positive revenue, and negative capacity, so that bodes really well for our unit revenue expansion going forward,” he says.
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