Brazil's Azul posts $220 million loss but signals travel demand recovery

(Reuters) - Brazilian airline Azul SA on Monday reported a third-quarter loss of 1.2 billion reais ($220 million) but signaled a faster-than-expected recovery in air travel demand, forecasting it will be operating 80% of its normal flights by year-end. Revenue doubled versus the second quarter to 805 million reais, although was still 70% lower than a year earlier due to the coronavirus pandemic. Azul's guidance is the most optimistic on Brazilian domestic travel recovery yet

Reuters November 17, 2020 01:05:51 IST
Brazil's Azul posts $220 million loss but signals travel demand recovery

Brazils Azul posts 220 million loss but signals travel demand recovery

(Reuters) - Brazilian airline Azul SA on Monday reported a third-quarter loss of 1.2 billion reais ($220 million) but signaled a faster-than-expected recovery in air travel demand, forecasting it will be operating 80% of its normal flights by year-end.

Revenue doubled versus the second quarter to 805 million reais, although was still 70% lower than a year earlier due to the coronavirus pandemic.

Azul's guidance is the most optimistic on Brazilian domestic travel recovery yet. Its rival Gol Linhas Aereas Inteligentes has forecast a 70% recovery by next year. Still, both forecasts are more bullish than what U.S. airlines have seen so far.

Executives said that Azul leisure travelers were already paying fares that were within 10% of pre-pandemic prices, although business travel has not seen a meaningful recovery.

Azul is focused on connecting Brazil's smaller cities, most often focusing on routes where it can have a monopoly that gives it pricing power. Executives said they had seen the strongest recovery in Brazil's northeast region, and that Sao Paulo's business-focused Congonhas airport was lagging in recovery.

But while domestic travel may be recovering faster than expected, the same does not apply to international flights. Azul said the only international route it hopes to resume in the short-term is to Orlando, if the United States were to lift its travel ban on Brazil.

(Reporting by Marcelo Rochabrun; editing by Jason Neely and Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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