Azul Fleet

Azul Accelerates Its Fleet Transformation In 2019

Next-generation fuel efficient Embraer E2 and A320neo aircraft to replace Embraer E-195s

Azul

Azul, the largest airline in Brazil by number of departures and destinations, announced today a significant acceleration in its fleet transformation program. The Company expects to add 21 next-generation aircraft this year, an increase of eight aircraft from its previous plan. These additions will be offset by the retirement of 15 Embraer E195 E1s, seven more than previously announced. Consistent with our fleet upgauging strategy, total available seat kilometers (ASKs) are expected to increase by 18% while departures should grow by only 5%.

For John Rodgerson, CEO of Azul, this acceleration is a further step in achieving Azul's margin expansion plan. "Azul ended 2018 with a fleet of 20 A320neo aircraft, which provide significant revenue uplift to all parts of our business. The extra seats offer passengers improved connectivity throughout our network; our TudoAzul loyalty customers love the additional redemption opportunities; and our Azul Cargo business fills up the extra belly space. All of these benefits come with an impressive 29% lower seat cost than our current generation aircraft.  We are equally excited about the entry of our next-generation Embraer E2, which themselves provide a 26% lower seat cost than the current airplanes." By the end of 2019, an industry-leading 40% of Azul's capacity is expected be flown on next-generation aircraft.

The table below provides further detail on Azul's updated fleet plan projections for 2019:

Azul Fleet Projection

2018A

2019 Old

2019 New

A320neo family

20

27

32

E2s

0

2

6

E-Jets

63

55

48

ATRs

33

36

33

A330s

7

11

10

Total commercial

fleet

123

131

129



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