Azul (AZUL4) Q1 2026 earnings summary

Executive summary

• Achieved record first-quarter operating revenue of R$5.5 billion, up 1.4% year-over-year, with strong RASK, EBITDA, and EBIT growth despite lower capacity, reflecting disciplined revenue generation, cost efficiency, and balance sheet de-risking.

• EBITDA reached R$1.7 billion, up 22.6% year-over-year, with a 31.1% margin; EBIT rose 83.1% to R$1.0 billion and operating income margin reached 19.1%.

• Capacity decreased 2.7% year-over-year, mainly due to an 8.9% reduction in international operations, while load factor hit a record 83.8%.

• Strengthened brand through partnership with the Brazilian Football Confederation and improved Net Promoter Score by over 12 points year-over-year.

• Leadership transition with new CFO Antonio Garcia, focusing on deleveraging and long-term value creation.

Financial highlights

• RASK increased 4.3% year-over-year to R$43.94 cents; CASK decreased 5.7% to R$35.55 cents, driven by cost initiatives and lower fuel prices.

• Passenger revenue grew 0.6% to R$5,048.8 million; cargo and other revenue increased 12.1% to R$422.6 million.

• Recurring free cash flow reached R$217 million in a seasonally weak quarter; immediate liquidity at R$4.7 billion, up 98.6% year-over-year.

• Operating expenses fell 8.2% to R$4,426.4 million.

• Adjusted net result was R$1,421.6 million, with an adjusted net margin of 26.0%.

Outlook and guidance

• Capacity growth for the year revised downward; proactive capacity reductions expected to result in negative growth.

• Targeting 12%-15% year-over-year RASK increase to offset fuel cost pressures, with good visibility to achieve this in 2Q.

• Focus remains on deleveraging, cash generation, and maintaining strict cost control amid fuel and macro volatility.

• Management expects continued margin expansion and resilience, supported by disciplined capacity management and a modern, efficient fleet.

• Monitoring geopolitical risks, especially fuel price volatility due to the Strait of Hormuz conflict.