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Core Insights - Payara and Azul have formed a strategic partnership aimed at enhancing Java application performance and facilitating codeless migrations, which will help enterprises modernize their Java applications while reducing costs [2][4][5] - The joint solution integrates Payara Qube with Azul Platform Prime, providing a high-performance environment for Java applications without requiring code changes [3][4][5] Company Overview - Payara specializes in cloud-native solutions for managing Java applications, offering enterprise-grade platforms that support Jakarta EE, Quarkus, and Spring applications [9] - Azul is solely focused on Java, providing a high-performance Java platform that is trusted by numerous leading organizations, including 36% of the Fortune 100 [8][9] Product Features - Payara Qube offers automation, pre-configured Kubernetes environments, and built-in observability, enabling rapid and secure deployment of enterprise Java applications [3] - Azul Platform Prime enhances Java runtime performance, ensuring applications run faster and more reliably in production environments [3][5] Market Impact - The partnership is particularly beneficial for companies in regulated sectors, allowing them to modernize applications efficiently while maintaining control over their cloud environments [4] - The combined solution is designed for teams managing extensive portfolios of Java applications across hybrid and multi-cloud environments, simplifying the modernization process [4]

Core Points - Azul S.A. has filed for voluntary Chapter 11 petitions in the United States to restructure its financial situation [1][2] - The company has received interim court approvals for its "First Day" motions, allowing it to access US$250 million of its US$1.6 billion debtor-in-possession financing [2][3] - The CEO of Azul stated that these approvals are crucial for the company's long-term success and will help reduce leverage while generating cash [3] Company Operations - Azul continues to operate normally, honoring all tickets, loyalty points, travel packages, and customer benefits during the restructuring process [1] - The company operates over 900 daily flights to more than 150 destinations with a fleet of over 200 aircraft [6] Financial Support - The company is supported by various legal and financial advisors, including Davis Polk & Wardwell LLP and Guggenheim Securities, LLC [5] - Key financial stakeholders such as United Airlines, American Airlines, and AerCap are backing Azul during this restructuring [3] Future Plans - A "Second Day" hearing is scheduled for July 9, 2025, to consider the company's requested relief on a final basis [3] - The restructuring process aims to position Azul for an accelerated transformation and improved financial health [3]

巴西航空公司Azul寻求破产保护。 ...

Core Viewpoint - Azul S.A. has initiated a pre-arranged restructuring process under Chapter 11 in the United States, aiming to secure approximately US$1.6 billion in debtor-in-possession financing and eliminate over US$2.0 billion in debt, positioning the company for long-term success in the aviation industry [1][3][5]. Financial Restructuring - The restructuring process includes Restructuring Support Agreements with key stakeholders, including bondholders and major lessors like AerCap, as well as strategic partners United Airlines and American Airlines [3][6]. - The financing structure involves up to US$950 million in equity investments, which will facilitate an accelerated emergence from the restructuring process [1][3]. - The company plans to utilize the Chapter 11 process to optimize its capital structure, reduce lease obligations, and enhance fleet efficiency, ultimately leading to improved cash flow generation [5][10]. Operational Continuity - Azul will continue its operations normally, honoring all customer commitments, including tickets and loyalty points, throughout the restructuring process [2][4]. - The company has filed motions to support ordinary-course operations, ensuring that crewmember compensation and benefits programs remain intact [9]. Stakeholder Support - Key stakeholders, including AerCap, United Airlines, and American Airlines, have expressed confidence in Azul's restructuring plan, highlighting the collaborative approach taken to strengthen the airline's future [6][8][9]. - The support from these partners is expected to reinforce Azul's financial position and operational efficiency, allowing the company to emerge stronger post-restructuring [10]. Company Overview - Azul S.A. is the largest airline in Brazil by flight departures and destinations, operating over 900 daily flights to more than 150 locations with a fleet of over 200 aircraft [13]. - The airline has been recognized for its operational excellence, being named the most on-time airline in the world in 2023 [13].

Core Viewpoint - Azul S.A. reported lower-than-expected first-quarter 2025 results, with both bottom line and top line lagging behind the Zacks Consensus Estimate, leading to a 9.3% drop in share price following the earnings release [1][2]. Financial Performance - The company incurred a loss of $2.18 per share in Q1 2025, contrasting with the Zacks Consensus Estimate of earnings of 4 cents per share, and a loss of 57 cents in Q1 2024 [3]. - Total revenues were $920 million, falling short of the Zacks Consensus Estimate of $925 million, despite a 15.2% year-over-year growth in passenger revenues, which accounted for 93% of total revenues [4]. - Cargo revenues and other grew by 17.3% year-over-year, with international cargo revenues increasing by 62% year-over-year [5]. - Consolidated traffic, measured in revenue passenger kilometers (RPKs), rose 19.4% year-over-year, with domestic and international traffic increasing by 14.7% and 38.3%, respectively [6]. - Total revenues per available seat kilometer (RASK) were R$42.14 cents, down 0.2% year-over-year, while passenger revenues per available seat kilometer (PRASK) decreased by 0.4% year-over-year [7]. Business Growth and Customer Satisfaction - Significant improvements in customer satisfaction were noted, with scores recovering by over 30 points in March 2025 compared to December 2024, leading to AZUL being ranked as the best airline in Brazil for the third consecutive year [8]. - The loyalty program, Azul Fidelidade, has nearly 19 million members, with active users increasing by 12% year-over-year, and gross bookings for Azul Viagens increased by 57% year-over-year [9]. - The logistics business, Azul Cargo, saw total revenue increase by 18% year-over-year, primarily driven by a 62% increase in international revenues [10]. Cost Management and Operational Efficiency - Despite macroeconomic challenges, cost reduction initiatives and productivity improvements have been effective, with productivity measured in ASKs per full-time equivalent increasing by 19% year-over-year [11]. - Fuel efficiency improved, with consumption per ASK dropping by 2.5% from the previous year [11]. - Operating expenses rose to R$4.82 billion, a 24.4% increase year-over-year, influenced by various factors including currency depreciation and fuel price increases [14]. Valuation and Market Position - AZUL is trading at a discount compared to the industry based on its forward 12-month price-to-sales ratio, with a Value Score of A [13]. - The company's shares have declined by 66.5% year-to-date, underperforming the Zacks Airline industry and other airline operators [18][20]. Investment Considerations - While AZUL stock is attractively valued and benefits from strong air travel demand, investors are advised to monitor the company's developments closely before making investment decisions [21][23].

Core Insights - Azul S.A. reported a loss of $2.18 per share in Q1 2025, significantly missing the Zacks Consensus Estimate of earnings of 4 cents per share, compared to a loss of 57 cents per share in Q1 2024 [1] Financial Performance - Total revenues for Q1 2025 were $920 million, slightly below the Zacks Consensus Estimate of $925 million, with passenger revenues, which account for 93% of total revenues, increasing by 15.2% year over year due to strong demand [2] - Cargo revenues and other sources grew by 17.3% year over year, with international cargo revenues experiencing a substantial 62% year-over-year growth, contributing to a healthy EBITDA that more than doubled year over year [3] Operational Metrics - Consolidated traffic, measured in revenue passenger kilometers (RPKs), rose by 19.4% year over year, with domestic traffic increasing by 14.7% and international traffic surging by 38.3% [4] - Consolidated available seat kilometers (ASK) increased by 15.6% year over year, with domestic capacity rising by 10.2% and international capacity by 39.2%, leading to a load factor increase of 2.6 percentage points to 81.5% [4] Cost and Expenses - Total revenues per ASK (RASK) were R$42.14 cents, down 0.2% year over year, while passenger revenues per ASK (PRASK) decreased by 0.4% year over year [5] - Cost per ASK (CASK) increased by 7.6% year over year, influenced by an 18% depreciation of the Brazilian real against the US dollar, 5.5% inflation, and higher costs associated with international operations [6] - Operating expenses reached R$4.82 billion, up 24.4% year over year, driven by increased capacity and fuel prices, although offset by productivity improvements and cost-reduction initiatives [7] Liquidity and Debt - At the end of Q1 2025, Azul had total liquidity of R$6.66 billion, down from R$7.49 billion at the end of the previous quarter, while gross debt rose to R$34.6 billion from R$33.6 billion [8]

[Azul S.A. First Quarter 2025 Results](index=2&type=section&id=Azul%20S.A.%20First%20Quarter%202025%20Results) [Financial and Operating Highlights](index=2&type=section&id=Financial%20and%20Operating%20Highlights) In Q1 2025, Azul achieved a record first-quarter operating revenue of R$5.4 billion, a 15.3% increase year-over-year, driven by a 15.6% growth in capacity (ASK), though EBITDA decreased by 2.1% to R$1.4 billion, with the margin contracting by 4.6 percentage points to 25.7% primarily due to a 7.6% rise in CASK influenced by Brazilian real depreciation, higher fuel prices, and inflation 1Q25 Financial and Operating Highlights (vs. 1Q24) | Indicator | 1Q25 | 1Q24 | Change | | :--- | :--- | :--- | :--- | | Total operating revenue (R$ million) | 5,394.4 | 4,678.4 | 15.3% | | Operating income (R$ million) | 570.6 | 800.7 | (230.2) | | EBITDA (R$ million) | 1,385.8 | 1,415.2 | (29.4) | | EBITDA margin (%) | 25.7% | 30.3% | -4.6 p.p. | | ASK (million) | 12,802 | 11,077 | 15.6% | | RASK (R$ cents) | 42.14 | 42.23 | -0.2% | | CASK (R$ cents) | 37.68 | 35.01 | 7.6% | - Operating revenue reached a record **R$5.4 billion** for a first quarter, up **15.3% YoY**, supported by strong demand and ancillary revenue growth[8](index=8&type=chunk) - Consolidated capacity (ASK) grew **15.6% YoY**, primarily driven by a **39.2%** increase in international operations, with passenger traffic (RPK) increasing **19.4%**, leading to a load factor of **81.5%**[8](index=8&type=chunk) - CASK increased by **7.6%** to **R$37.68 cents**, mainly due to an **18.0%** average depreciation of the Brazilian real, **5.5%** inflation, and growth in international operations[9](index=9&type=chunk) [Management Comments](index=3&type=section&id=Management%20Comments) The CEO highlighted record Q1 revenue of R$5.4 billion, driven by strong demand and significant contributions from business units like Azul Viagens and Azul Cargo, despite operations being impacted by macroeconomic factors including an 18% currency depreciation and inflation which increased CASK by 8%, with the company continuing to focus on its unique network where it is the sole carrier on 82% of its routes and actively working to optimize its capital structure and reduce debt - Business units demonstrated strong growth, with Azul Viagens increasing gross bookings by **57% YoY** and Azul Cargo's revenue growing by **18% YoY**[12](index=12&type=chunk) - Despite a **16%** capacity increase, unit revenue (RASK) remained strong at over **R$42 cents**, demonstrating the resilience of the business model[13](index=13&type=chunk) - Cost pressures were partially offset by productivity gains, with ASKs per FTE increasing by **19%** and fuel consumption per ASK dropping by **2.5% YoY** due to fleet modernization[15](index=15&type=chunk) - The company is in ongoing discussions with partners to further optimize its capital structure and liquidity, having already made significant progress in reducing debt and leverage[18](index=18&type=chunk) [Recent Developments](index=4&type=section&id=Recent%20Developments) In April 2025, Azul executed several capital structure optimizations, including issuing new preferred shares to lessors to settle a R$3.0 billion equity obligation and to bondholders to eliminate approximately US$270 million of debt (35% of notes due 2029/2030), additionally securing R$600 million in new funding from existing bondholders to bolster its short-term liquidity - On April 3, 2025, **96 million** new preferred shares were issued to lessors, eliminating an outstanding equity obligation of approximately **R$3.0 billion**[21](index=21&type=chunk) - On April 28, 2025, **450.6 million** new preferred shares were issued to bondholders, eliminating **35%** of the notes due in 2029 and 2030, valued at approximately **US$270 million**[21](index=21&type=chunk) - On April 30, 2025, Azul secured approximately **R$600 million** in additional funding from existing bondholders to support its short-term liquidity position[20](index=20&type=chunk) [Consolidated Financial Results](index=5&type=section&id=Consolidated%20Financial%20Results) [Operating Performance](index=5&type=section&id=Operating%20Performance) In Q1 2025, total operating revenue grew 15.3% to R$5.4 billion, with passenger revenue up 15.2% and cargo revenue up 17.3%, however, total operating expenses surged 24.4% to R$4.8 billion driven by higher fuel costs, depreciation, and airport fees, leading to a 28.7% decrease in operating income to R$570.6 million and a contraction in the operating margin from 17.1% to 10.6% 1Q25 Income Statement Summary (R$ million) | Item | 1Q25 | 1Q24 | % Δ | | :--- | :--- | :--- | :--- | | **Total operating revenue** | **5,394.4** | **4,678.4** | **15.3%** | | Passenger revenue | 5,017.4 | 4,357.0 | 15.2% | | Cargo revenue and other | 377.0 | 321.4 | 17.3% | | **Total Operating Expenses** | **(4,823.8)** | **(3,877.7)** | **24.4%** | | Aircraft fuel | (1,572.0) | (1,353.3) | 16.2% | | Depreciation and amortization | (815.2) | (614.5) | 32.7% | | **Operating Result** | **570.6** | **800.7** | **-28.7%** | | **EBITDA** | **1,385.8** | **1,415.2** | **-2.1%** | - International cargo revenues showed a remarkable recovery, increasing **62% year-over-year**[27](index=27&type=chunk) - Operating expenses per ASK (CASK) increased by **7.6%**, with notable rises in depreciation (**+14.8%**) and airport fees (**+13.5%**) on a per-ASK basis[29](index=29&type=chunk) [Non-Operating Results](index=8&type=section&id=Non-Operating%20Results) The non-operating result was significantly influenced by foreign exchange movements, with a net gain of R$2.6 billion on foreign currency exchange due to the appreciation of the Brazilian real more than offsetting net financial expenses of R$2.4 billion, which included a R$1.1 billion accounting impact from debt modification and R$604 million in lease-related interest 1Q25 Net Financial Results (R$ million) | Item | 1Q25 | 1Q24 | % Δ | | :--- | :--- | :--- | :--- | | Net financial expenses | (2,361.9) | (1,117.0) | 111.5% | | Foreign currency exchange, net | 2,567.1 | (847.3) | n.a. | | **Net financial results** | **212.5** | **(1,925.9)** | **n.a.** | - Net financial expenses of **R$2,361.9 million** included a **R$1.1 billion** non-cash accounting impact from debt modification agreements[32](index=32&type=chunk) - A net gain of **R$2,567.1 million** was recorded from foreign currency exchange due to a **7.3%** appreciation of the Brazilian real against the US dollar during the quarter[34](index=34&type=chunk) [Liquidity and Financing](index=8&type=section&id=Liquidity%20and%20Financing) [Liquidity Position](index=8&type=section&id=Liquidity%20Position) Azul ended Q1 2025 with total liquidity of R$6.7 billion, including R$2.3 billion in immediate liquidity (cash and receivables), and during the quarter, the company raised approximately R$3.0 billion in new notes while paying down over R$4.0 billion in leases, debt repayments, and interest, reflecting active balance sheet management Liquidity Position as of March 31, 2025 (R$ million) | Item | 1Q25 | 4Q24 | 1Q24 | | :--- | :--- | :--- | :--- | | Immediate liquidity | 2,345.2 | 3,057.3 | 2,713.9 | | Total Liquidity | 6,664.4 | 7,490.4 | 5,989.0 | - Immediate liquidity of **R$2.3 billion** represents **11.6%** of last twelve months' (LTM) revenues[35](index=35&type=chunk) [Debt Structure and Leverage](index=9&type=section&id=Debt%20Structure%20and%20Leverage) Gross debt stood at R$34.7 billion at the end of Q1 2025, an increase from Q4 2024 mainly due to a R$3.0 billion loan raised in January, with the company's leverage, measured as net debt to LTM EBITDA, at 5.2x, and the average debt maturity, excluding leases and convertibles, at 4.1 years with an average interest rate of 12.5% Key Financial Ratios | Ratio | 1Q25 | 4Q24 | 1Q24 | | :--- | :--- | :--- | :--- | | Gross debt (R$ million) | 34,664.1 | 33,677.1 | 24,384.1 | | Net debt (R$ million) | 31,350.1 | 29,579.4 | 20,865.1 | | Net debt / EBITDA (LTM) | 5.2x | 4.9x | 3.7x | - Gross debt increased by **R$987.0 million** compared to Q4 2024, primarily due to a **R$3.0 billion** loan raised as part of the restructuring plan[40](index=40&type=chunk) - The leverage ratio of **5.2x** was impacted by the depreciation of the Brazilian real on dollar-denominated debt, with the company continuing to explore opportunities to manage its leverage and debt profile[43](index=43&type=chunk) [Fleet and Capex](index=10&type=section&id=Fleet%20and%20Capex) [Fleet Composition](index=10&type=section&id=Fleet%20Composition) As of March 31, 2025, Azul's passenger operating fleet comprised 184 aircraft, with the company having advanced its fleet modernization, as next-generation aircraft now account for approximately 80% of its total capacity, a key driver for fuel efficiency Passenger Operating Fleet | Aircraft Type | 1Q25 | 1Q24 | | :--- | :--- | :--- | | Airbus widebody | 13 | 9 | | Airbus narrowbody | 57 | 55 | | Embraer E2 | 32 | 20 | | Embraer E1 | 29 | 37 | | ATR | 29 | 36 | | Cessna | 24 | 24 | | **Total** | **184** | **181** | - The share of capacity from next-generation aircraft reached **80%** at the end of 1Q25, which is significantly higher than regional competitors[46](index=46&type=chunk) [Capital Expenditures](index=10&type=section&id=Capital%20Expenditures) Net capital expenditures (capex) in Q1 2025 totaled R$141.9 million, a 67.4% decrease compared to the same period last year, with spending primarily directed towards the capitalization of engine overhauls and the acquisition of spare parts Capex (R$ million) | Item | 1Q25 | 1Q24 | % Δ | | :--- | :--- | :--- | :--- | | Capex | 144.3 | 446.2 | -67.7% | | Sale and leaseback | -2.4 | -10.3 | -76.9% | | **Net capex** | **141.9** | **435.9** | **-67.4%** | [ESG and Non-Recurring Items](index=11&type=section&id=ESG%20and%20Non-Recurring%20Items) [ESG Responsibility](index=11&type=section&id=ESG%20Responsibility) Azul reported its key ESG indicators based on SASB standards, showing environmentally, fuel consumption per ASK improved by 1.9% compared to Q4 2024, socially, 100% of employees are covered by collective bargaining agreements, and governance metrics indicate 92% of directors are independent and 23% are women Key ESG Indicators (1Q25) | Category | Metric | Value | | :--- | :--- | :--- | | **Environmental** | Total fuel consumed per ASK (GJ / ASK) | 1,053 | | **Social** | Employee monthly turnover (%) | 1.0% | | **Social** | Employee covered under collective bargaining agreements (%) | 100% | | **Governance** | Independent directors (%) | 92% | | **Governance** | Percent of Board members that are women (%) | 23% | [Non-Recurring Items Reconciliation](index=11&type=section&id=Non-Recurring%20Items%20Reconciliation) The company's reported operating results for Q1 2025 included a significant non-recurring positive adjustment of R$910.3 million, which, related to the capital optimization plan, increased reported operating income from an adjusted R$570.6 million to a reported R$1,480.9 million, and boosted reported EBITDA from R$1.4 billion to R$2.3 billion 1Q25 Non-recurring Adjustments (R$ million) | Item | As recorded | Adjustments | Adjusted | | :--- | :--- | :--- | :--- | | Operating income | 1,480.9 | (910.3) | 570.6 | | Operating Margin | 27.5% | -16.9 p.p. | 10.6% | | EBITDA | 2,296.1 | (910.3) | 1,385.8 | | EBITDA Margin | 42.6% | -16.9 p.p. | 25.7% | - A positive non-recurring impact of **R$910.3 million** was recorded in 1Q25, related to the capital optimization plan and final terms negotiated with lessors, OEMs, and bondholders[51](index=51&type=chunk) [Financial Statements](index=13&type=section&id=Financial%20Statements) [Balance Sheet](index=13&type=section&id=Balance%20Sheet) As of March 31, 2025, Azul's balance sheet showed total assets of R$25.5 billion, with total liabilities at R$54.0 billion significantly exceeding assets and resulting in a negative equity of R$28.5 billion, while current liabilities were R$17.0 billion against current assets of R$6.0 billion Balance Sheet Summary (R$ million) | Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **5,960.9** | **5,658.0** | | **Total Assets** | **25,548.7** | **26,274.9** | | **Total Current Liabilities** | **17,021.5** | **21,342.3** | | **Total Liabilities** | **53,999.8** | **56,710.2** | | **Total Equity** | **(28,451.1)** | **(30,435.3)** | [Cash Flow Statement](index=14&type=section&id=Cash%20Flow%20Statement) In Q1 2025, cash flow from operating activities was a net outflow of R$313.2 million, compared to an outflow of R$63.2 million in Q1 2024, with investing activities using R$238.2 million and financing activities using R$176.8 million, resulting in a net decrease in cash and cash equivalents of R$749.3 million for the quarter Cash Flow Summary (R$ million) | Item | 1Q25 | 1Q24 | | :--- | :--- | :--- | | Net cash generated (used) by operating activities | (313.2) | (63.2) | | Net cash generated (used) in investing activities | (238.2) | (435.9) | | Net cash generated (used) in financing activities | (176.8) | (59.4) | | **Net decrease in cash and cash equivalents** | **(749.3)** | **(559.7)** |

Core Viewpoint - AZUL has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - Changes in a company's earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, leading to stock price fluctuations based on their buying or selling activities [3]. AZUL's Earnings Outlook - AZUL's rising earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, which is expected to drive the stock price higher [4]. - The Zacks Consensus Estimate for AZUL has increased by 168.7% over the past three months, with expected earnings of $0.16 per share for the fiscal year ending December 2025, representing a year-over-year change of 109.5% [7]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimates and has a strong track record, with Zacks Rank 1 stocks averaging a +25% annual return since 1988 [6]. - The upgrade of AZUL to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Core Viewpoint - AZUL has experienced significant selling pressure, declining 57.1% over the past four weeks, but is now positioned for a potential trend reversal as it is in oversold territory, supported by positive earnings forecasts from Wall Street analysts [1]. Group 1: Stock Performance - AZUL's stock has declined 57.1% in the last four weeks, indicating substantial selling pressure [1]. - The stock's Relative Strength Index (RSI) is currently at 23.35, suggesting it is oversold and may soon experience a trend reversal [5]. Group 2: Analyst Sentiment - There is strong consensus among sell-side analysts that AZUL will report better earnings than previously predicted, with the consensus EPS estimate increasing by 8.3% over the last 30 days [7]. - AZUL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8].