With that, Cirium’s Diio Mi application shows that Azul led the recovery – in terms of capacity by ASKs – in 21 of Brazil’s top 30 domestic airports as of December 2021, versus the same month in 2019. The key ingredient of this upgauging, as the market has learned in the last «Azul Day» for investors, is that every new aircraft in the company’s fleet can produce much better costs than the E1s, meaning more competitiveness against GOL and LATAM, especially in markets where it is more exposed. It has reactivated practically its entire fleet already, but since 2020, the airline dropped nine older-generation Embraer E1s with no immediate replacement. Naturally it’s not this that put Azul in the situation it is at right now, as Azul Conecta is even counted as a separate airline – with mere 0.02% of 2021’s domestic RPKs in the country.Īzul progressed with its upgauging strategy, albeit much more slowly than pre-COVID. These smaller flights might not make money themselves, but they sure do a subsidizing job that is unreachable – for now – to Azul’s competitors. Flying a nine-seater five times a week from Porto Alegre to Bagé, in Rio Grande do Sul state, for example, will now make the airline save thousands in tax it would pay on a 214-seater flight from Porto Alegre to Campinas in an Airbus A321neo. Now, thanks to Azul’s Cessna Caravans, it pays less on fuel in many states.
Azul airpass full#
All in all, it was only this year that Azul put this project to full speed. On early 2020, Azul took over Two Flex to rob GOL of this competitive advantage, but also to incorporate this capilarity of deal-making capacity. In 2018, GOL thought that was a great idea and it started hiring Two Flex, Brazil’s largest Cessna Caravan operator, to operate flights on its behalf to snatch such deals in a smaller scale at a smaller cost. Some years ago, Azul started doing deals with states in which the more regional destinations/flights it served within that unit of federation, it would earn progressive discounts on the ICMS tax for all flights from that state. How so? There’s this state tax called ICMS in each Brazilian state it is charged over goods and services, including jet fuel.
Speaking of Caravans, in 2021 Azul used Azul Conecta, its Cessna-operator subsidiary which it bought in 2020, as a proxy to pay less for fuel in many states of the federation.
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