Market Overview

Azul Reports Second Quarter Results


Adjusted Net Income Totaled R$238 Million, up R$277 Million Year over

Azul S.A., "Azul" (B3:AZUL4) (NYSE:AZUL), the largest airline
in Brazil by number of cities and departures, announces today its
results for the second quarter of 2018 ("2Q18"). The following financial
information, unless stated otherwise, is presented in Brazilian reais
and in accordance with International Financial Reporting Standards
(IFRS). Prior periods presented have been adjusted to reflect adoption
of new IFRS accounting standards.

Financial and Operating Highlights for 2Q18

  • Net income adjusted for non-recurring items1 totaled
    R$238.3 million, compared to a net loss of R$38.6 million in 2Q17.
  • Adjusted operating income was R$75.8 million yielding a margin of 3.7%
    compared with R$98.8 million and a margin of 5.8% in 2Q17.
Financial results (R$ million) 2Q181 2Q17 % ∆ 1H181 1H17 % ∆
Operating revenues 2,069.1 1,717.1 20.5 % 4,282.5 3,595.5 19.1 %
Operating income 75.8 98.8 -23.3 % 351.7 308.0 14.2 %
Operating margin 3.7 % 5.8 %



8.2 % 8.6 %



EBITDAR 521.4 470.0 10.9 % 1,205.5 1,036.2 16.3 %
EBITDAR margin 25.2 % 27.4 %



28.2 % 28.8 %



Net income 238.3 (38.6 ) n.a. 448.8 19.7 2,176.6 %
Net income per PN share (R$) 0.71 (0.12 ) n.a. 1.33 0.07 1,917.5 %
Net income per ADS (US$) 0.55 (0.11 ) n.a. 1.03 0.06 1,530.2 %
  • Passenger traffic (RPKs) increased 17.4% over a capacity increase of
    18.6% resulting in a load factor of 80.1%, 0.8 percentage points lower
    than in 2Q17.
  • In addition to the double-digit growth in capacity, RASK and PRASK
    adjusted for the loss in revenue from the truckers' strike in Brazil
    increased 1.6% and 1.1% year over year. Assuming a flat stage-length,
    RASK rose 8.1% year over year.
  • Adjusted CASK ex-fuel increased 0.3%, despite the 12.2% devaluation of
    the Brazilian real. On an exchange rate neutral basis, CASK ex-fuel
    would have been lower by 5.1%.
  • Net financial expenses decreased 26.9% from R$111.8 million to R$81.8
    million due to lower average cost of debt and lower leverage year over
  • At the end of 2Q18, our total cash2 and receivables position
    totaled R$3.8 billion, representing 45% of the last twelve months'
  • Azul's operating fleet totaled 121 aircraft at the end of the quarter,
    including 15 next-generation A320neo aircraft, representing 24% of
    total capacity.
  • TudoAzul recorded a 38% year over year increase in gross billings
  • Azul cargo recorded a 64% year over year increase in revenue.

1 Adjusted for non-recurring items totaling R$283.3
million incurred in 2Q18 as detailed on page 12.

2 Includes cash and cash equivalents, short-term
and long-term investments, and current and non-current restricted

To retrieve the full version of this press release visit

About Azul

Azul S.A. (B3:AZUL4) (NYSE:AZUL), the largest airline in Brazil by
number of cities served, offers 780 daily flights to 107 destinations.
With an operating fleet of 121 aircraft and more than 10,000
crewmembers, the Company has a network of 217 non-stop routes as of June
30, 2018. This year, Azul was awarded best airline in Latin America by
TripAdvisor Travelers' Choice and in 2017, the Company was elected best
low cost carrier in South America for the seventh consecutive time by
Skytrax. Azul also ranked as most on-time airline in Brazil and most
on-time low-cost carrier in the Americas in 2017 according to OAG's
Punctuality League, the industry's most comprehensive annual ranking of
on-time performance. For more information visit

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