How Azul Completed 2020 With Extra Liquidity And Extra Planes
Regardless of the COVID-19 disaster, Azul Linhas Aereas almost doubled its liquidity in 2020 and elevated its fleet by 13%, signaling among the best takeovers on the planet. How did the low-cost Brazilian operator handle to do that? Let’s look additional.
From the low level in April to a digital restoration in December
In April, Azul needed to shut down nearly 100% of its operations because of the COVID-19 pandemic. Instantly, the corporate went from 116 locations to 25, working solely a skeleton route of 70 day by day flights.
Quick ahead ten months and Azul has reclaimed 92 locations. Now, it serves 117 cities, with 700 day by day departures. As well as, the airline expects its home capability for the primary quarter of 2021 to be greater than that of the primary quarter of 2019.
Azul and GOL Linhas Aereas are navigating the Brazilian home restoration. LATAM can also be recovering fairly properly, though it’s a bit behind because it depends extra on the worldwide market.
John Rodgerson, CEO of Azul, mentioned:
“Our various fleet, mixed with our distinctive community benefits, has resulted in one of many quickest recoveries of any airline on the planet. We ended the yr with greater than 90% restoration of our home capability whereas remaining trustworthy to our community technique by being the one provider on 80% of the routes we take. “
In 2020, Azul carried 14.79 million passengers, a lower of 46.5% from the earlier yr.
The fleet is planning for the long run
In contrast to many different low value carriers around the globe, Azul has a really various fleet. GOL Linhas Aereas, for instance, operates solely Boeing 737s, and Volaris in Mexico has a fleet of the Airbus A320 household.
As a substitute, Azul has wide-body plane and slim our bodies from Airbus, Embraer E1 and E2 households, ATRs and Cessnas for industrial operations.
In 2020, many carriers diminished their fleets because of the COVID-19 disaster. Aeromexico rejected leases for a lot of older plane; Lufthansa has diminished the scale of its general fleet by 150 plane. Azul went the opposite method.
The Brazilian provider elevated its fleet by 12.8% in 2020. It added two new massive Airbus jets and 4 new Airbus fuses.
Moreover, Azul obtained 5 new Embraer E2s through the yr, though it diminished its Embraer E1 fleet from 70 to 63.
Lastly, the strongest progress within the fleet got here from the Cessna division. In 2020, Azul acquired Two Taxi Aéreo and renamed it Azul Cargo. The acquisition included 17 Cessna Caravans that are used for each cargo and passenger operations.
This yr, Azul plans to obtain 4 new Airbus planes. The rest of E2 deliveries are delayed till 2024, the airline’s administration mentioned through the fourth-quarter investor name.
What about liquidity?
In 2020, Azul almost doubled its instant liquidity. As of January 2020, he had 2.2 billion reais in money, and as of December, he had over 4 billion (US $ 710 million).
The airline has managed to do that via value discount initiatives and elevating capital. As of December 31, money represented 69.6% of revenues for its final twelve months. As well as, the corporate had not anticipated any important debt repayments for the following twelve months. Because of this Azul is in good monetary form general.
John Rodgerson mentioned,
“Azul is beginning 2021 in a robust place, however we’re additionally conscious of the lingering uncertainty. Due to this fact, we should keep rigorous self-discipline when it comes to capability, prices and money movement. A yr in the past we had 2.2 billion reais in money, no vaccine on the horizon, and we have been solely flying 70 flights a day. A yr later, we now have 4 billion in money, 220 million vaccines arriving within the subsequent 4 months, and over 700 flights a day. “
There are nonetheless challenges forward, however Azul began 2021 with confidence in its aggressive place, Rodgerson added.
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