Azul S.A. 2Q26 Financial Summary
Business Context and Reporting Period
Azul S.A. (NYSE: AZUL) reported its second-quarter 2026 results on August 13, 2026. The airline, Brazil's largest by number of cities served, is in a transition year following the successful completion of a major financial restructuring. The quarter was characterized by disciplined capacity management to offset a significant surge in jet fuel prices and to protect liquidity.
Key Financial Metrics
| Metric | 2Q26 | 2Q25 | Change |
|---|---|---|---|
| Total Operating Revenue (R$ million) | 4,978.7 | 4,942.3 | +0.7% |
| EBITDA (R$ million) | 510.1 | 1,142.7 | -55.4% |
| EBITDA Margin | 10.2% | 23.1% | -12.9 p.p. |
| Net Result (R$ million) | (1,041.2) | 1,293.4 | Loss vs. Profit |
| Immediate Liquidity (R$ million) | 3,659.1 | 3,290.5 | +11.2% |
| Gross Debt (R$ million) | 21,415.9 | 34,410.4 | -37.8% |
| Net Debt/EBITDA (LTM) | 3.0x | 5.2x | -2.2x |
Operating Highlights: Revenue per Available Seat Kilometer (RASK) reached a record R$43.41 cents (+12.7% YoY). Cost per ASK (CASK) rose to R$44.80 cents (+26.0% YoY), driven primarily by a 61.8% increase in fuel costs per liter. Capacity (ASK) was reduced by 10.6% YoY, with international capacity cut by 24.9%.
Material Changes vs. Prior Period
- Profitability Decline: EBITDA fell 55.4% year-over-year due to soaring fuel costs and lower capacity absorption of fixed costs. The company reported a net loss of R$1.04 billion compared to a net profit of R$1.29 billion in 2Q25.
- Debt Reduction: Total debt decreased by approximately R$13.0 billion compared to 2Q25, a direct result of the completed financial restructuring.
- Cost Structure: Aircraft fuel expenses increased 41.2% to R$1.96 billion. Salaries and benefits rose 21.3% due to retention initiatives and union agreements. Conversely, depreciation and amortization decreased 12.3% due to lease modifications.
- Revenue Quality: Despite lower passenger volumes (-9.1%), premium revenue increased 12.4%, and average fares rose 9.5%.
Guidance, Outlook, and Risks
Management Commentary: Management views 2026 as a transition year. While the restructuring has strengthened the balance sheet, the quarter was impacted by non-recurring payments (R$359.4 million) related to advisory fees, aircraft redeliveries, and fleet transitions. The company expects temporary cost pressures from lower capacity to diminish as fleet availability stabilizes and modest capacity growth resumes in 4Q26.
Liquidity and Financing: Azul ended the quarter with R$3.7 billion in immediate liquidity. The government approved up to R$4.6 billion in long-term financing in Brazilian reais at attractive rates, providing flexibility to navigate the transition. The company has no material debt maturities until 2031.
Risks and Contingencies:
- Fuel Price Volatility: A 61.8% increase in fuel costs per liter significantly impacted margins.
- Restructuring Costs: Non-recurring items totaling R$359.4 million impacted operating results in 2Q26.
- Operational Transition: The company is gradually eliminating ACMI operations to operate exclusively with Azul aircraft and crew by 2027.
Investor Verification Checklist
- Non-Recurring Adjustments: Verify the impact of the R$359.4 million in non-recurring items on the reported EBITDA and Net Result.
- Liquidity Composition: Confirm the breakdown of "Immediate Liquidity," which includes R$1.46 billion in credit card receivables that can be advanced.
- Fuel Hedging: Assess the effectiveness of NDF contracts and the exposure to future fuel price fluctuations given the 61.8% cost increase.
- Debt Maturity Profile: Review the debt amortization schedule to confirm the absence of material maturities until 2031.
- Capacity Recovery: Monitor the timeline for the resumption of capacity growth expected in 4Q26 and its impact on fixed-cost absorption.