Group 1 - Azul Brazilian Airlines filed its Form 20-F report for the fiscal year 2024 with the U.S. Securities and Exchange Commission on April 28, 2025 [1] - The report is accessible on the SEC's website and Azul's Investor Relations website, and shareholders can request it from the Investor Relations department [1] Group 2 - Azul S.A. is the largest airline in Brazil by number of flight departures and cities served, operating over 1,000 daily flights to more than 150 destinations [2] - The company has an operating fleet of over 180 aircraft and employs more than 15,000 crewmembers, with a network of 300 non-stop routes [2] - Azul was recognized as the most on-time airline in the world in 2022 by Cirium, marking a significant achievement for a Brazilian airline [2] - In 2020, Azul was awarded the title of best airline in the world by TripAdvisor, becoming the first Brazilian flag carrier to earn this recognition [2]

[Form 6-K Report: Update on Outstanding Shares](index=1&type=section&id=Form%206-K%20Report) [Update on Outstanding Shares](index=2&type=section&id=Azul%20Provides%20Current%20Outstanding%20Shares) Azul updates total outstanding shares following a capital increase and debt conversion into preferred shares - Total outstanding shares updated to include shares from a capital increase for aircraft lessors, controlling shareholders, and a debt conversion of **35% of notes due in 2029 and 2030** into preferred shares[5](index=5&type=chunk) - Key share issuances in April 2025 included **96,009,988 new preferred shares** to lessors on April 3, **1,200,000,063 new common shares** to controlling shareholders on April 10, and **450,572,669 new preferred shares** for bondholders on April 28[9](index=9&type=chunk) Updated Shareholder Information | Shareholders | Common Shares | % Common Shares | Preferred Shares | % Preferred Shares | Total Economic Shares (1 PS = 75 CS) | % Economic Interest | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | David Neeleman | 1,426,406,701 | 67.0% | 7,329,683 | 0.8% | 26,348,439 | 2.85% | | Trip Shareholders** | 702,558,420 | 33.0% | 5,981,040 | 0.7% | 15,348,486 | 1.66% | | United Airlines, Inc. (Calfinco) | - | - | 18,632,216 | 2.1% | 18,632,216 | 2.02% | | Others | - | - | 863,832,318 | 96.4% | 863,832,318 | 93.45% | | Treasury | - | - | 264,496 | 0.0% | 264,496 | 0.03% | | **TOTAL** | **2,128,965,121** | **100.0%** | **896,039,753** | **100.0%** | **924,425,955** | **100.0%** | [About Azul](index=2&type=section&id=About%20Azul) Azul S.A. is Brazil's largest airline, recognized for extensive operations and high service quality - Azul is the **largest airline in Brazil** by flight departures and cities served[8](index=8&type=chunk) - Operational metrics include **over 1,000 daily flights**, **more than 150 destinations**, and a fleet of **over 180 aircraft** with **more than 15,000 Crewmembers**[8](index=8&type=chunk) - Azul received international recognition as the **most on-time airline in 2022** by Cirium and the **best airline in 2020** by TripAdvisor[8](index=8&type=chunk) [Signatures](index=3&type=section&id=SIGNATURES) The report is formally signed by Azul S.A.'s CFO, Alexandre Wagner Malfitani, on April 28, 2025 - The report was signed by Alexandre Wagner Malfitani, Chief Financial Officer of Azul S.A[11](index=11&type=chunk)[13](index=13&type=chunk) - The signature date is **April 28, 2025**[12](index=12&type=chunk)

Financial Performance - For the year ended December 31, 2024, Azul achieved a record operating revenue of R$19.5 billion, representing an increase of 5.2% compared to the year ended December 31, 2023[55]. - Fuel expenses accounted for 34.6% of total operating expenses for the year ended December 31, 2024, down from 34.9% in 2023 and 45.2% in 2022[103]. - Labor expenses accounted for 16.9%, 14.3%, and 13.5% of total operating expenses for the years ended December 31, 2024, 2023, and 2022, respectively[185]. - The company experienced liquidity pressures in 2024 due to the ongoing impacts of the COVID-19 pandemic and supply chain disruptions[112]. - The company has significant levels of indebtedness, which may hinder its ability to raise additional capital on acceptable terms due to market conditions and its non-investment grade credit rating[109]. Economic Environment - Brazil's GDP grew by 3.2% in 2023 and is projected to grow by 3.4% in 2024, indicating a recovery from the impacts of the COVID-19 pandemic[51]. - The Brazilian real depreciated against the U.S. dollar, with the selling rate reported at R$6.19 per US$1.00 as of December 31, 2024, compared to R$4.84 per US$1.00 in 2023[65]. - Economic and political instability in Brazil has contributed to a decline in market confidence, which may adversely affect Azul's operations and financial performance[56]. - The Brazilian government has significant influence over the economy, and changes in policies could impact Azul's business operations[50]. - The recent trade war initiated by the United States may create uncertainty and potentially lead to a contraction in Brazil's GDP in the coming years[51]. Regulatory and Compliance Risks - The company is subject to various covenants in its financing agreements that impose significant operating and financial restrictions, limiting its flexibility to respond to changing conditions[117]. - Non-compliance with the LGPD could result in fines of up to 2% of the company's revenue in Brazil for the previous fiscal year, capped at R$50,000,000 per infraction[101]. - The company may face sanctions under the LGPD, including partial suspension of database operations for up to six months until compliance is achieved[101]. - The company operates in a complex regulatory environment, exposing it to compliance and litigation risks that could materially affect its results of operations[150]. - The company is subject to increasingly stringent environmental regulations, with potential fines up to R$50 million for non-compliance[228]. Operational Challenges - The company faced significant challenges in recruiting and retaining personnel as air travel demand rebounded, leading to increased delays and flight cancellations[170]. - Delays in aircraft delivery schedules from manufacturers may limit the ability to meet increasing passenger demand and achieve growth plans[190]. - The company cannot assure that it will maintain current landing rights and slots, which are vital for its growth strategy[189]. - Technical and operational problems in Brazil's civil aviation infrastructure could adversely affect the company's growth strategy[182]. - The company faces risks related to aircraft maintenance and parts availability, which could lead to increased maintenance costs and operational disruptions[209]. Market Competition - The company faces intense competition, with 18% of its domestic network overlapping with Gol and 13% overlapping with LATAM Airlines as of December 31, 2024[137]. - The company entered into a non-binding memorandum of understanding with Abra to explore a potential business combination with Gol on January 15, 2025[146]. - The company anticipates additional fixed costs as it leases or acquires new aircraft to support its growth strategy[131]. - The airline industry is characterized by high fixed costs and relatively elastic revenues, making it difficult to quickly reduce expenses in response to revenue shortfalls[130]. - The company is highly dependent on its three hubs at Viracopos, Confins, and Recife airports, which account for a significant portion of daily operations[199]. Environmental and Sustainability Concerns - The company is preparing for the implementation of CORSIA, which aims to stabilize carbon dioxide emissions in international aviation, with Brazil expected to sign in 2027[231]. - Climate change regulations could require airlines to reduce emissions before cost-effective technologies are available, leading to significant capital investments[236]. - Increased scrutiny on ESG practices may result in higher compliance costs and operational expenses, impacting financial results[240]. - The potential for increased operating costs due to climate change awareness may shift consumer preferences towards more sustainable travel options[236]. - Tax incentives for jet fuel purchases in Brazil are subject to change, which could adversely affect operational costs[244]. Strategic Initiatives - The company plans to expand its business activities by introducing new products and services, which may incur significant costs before generating profits[192]. - The company has contractually committed to acquire 110 aircraft, with 94 directly from manufacturers and 16 from lessors[131]. - Azul Fidelidade's revenue is significantly dependent on selling points to business partners, and any decrease in points sold could adversely affect the company's financial condition[216]. - The company estimates that breakage of points will decrease as it expands its network of business partners, but failure to adequately price points could negatively impact profitability[222]. - The company has entered into a commercial cooperation agreement with Gol, connecting their flight networks through a codeshare agreement covering exclusive domestic routes[213].

Core Insights - The airline industry is experiencing mixed results, with some carriers reporting disappointing earnings while others show positive traffic growth and expansion plans [2][4][8]. Group 1: Company Performance - Azul reported fourth-quarter 2024 earnings of 9 cents per share, below the Zacks Consensus Estimate of 12 cents, but showed over 100% year-over-year improvement. Total revenues were $948.9 million, missing the estimate of $957.6 million [4]. - Allegiant Travel's scheduled traffic in January 2025 rose 7.4% year-over-year, with capacity increasing by 9.9%. However, the load factor declined to 78.8% from 80.7% the previous year [6]. - Volaris reported fourth-quarter 2024 earnings per share of 39 cents, below the estimate of 55 cents, with total operating revenues declining 7% year-over-year to $835 million. The company faced challenges due to aircraft groundings [8]. Group 2: Market Trends - The NYSE ARCA Airline Index declined 7.4% to $66.43 over the past week, although it has increased 28.4% over the past six months [11]. - JetBlue Airways plans to launch a new daily summer-seasonal service between Manchester-Boston Regional Airport and New York's JFK Airport starting June 12, 2025, to cater to increasing air travel demand [9][10]. Group 3: Future Outlook - Ryanair Holdings is expected to release its February traffic results soon, with optimistic air travel demand likely to boost passenger revenues and improve load factors year-over-year [12].

Core Viewpoint - Azul S.A. reported a fourth-quarter 2024 earnings per share of 9 cents, which was below the Zacks Consensus Estimate of 12 cents, but showed over 100% improvement year-over-year [1] Financial Performance - Total revenues for the fourth quarter were $948.9 million, missing the Zacks Consensus Estimate of $957.6 million, driven by strong demand and robust ancillary revenues [2] - Passenger revenues, which accounted for 92.7% of total revenues, increased by 10% year-over-year, while cargo revenue and other grew by 9.9% due to improved performance and partial recovery of international operations [3] Traffic and Capacity - Consolidated traffic, measured in revenue passenger kilometers (RPKs), rose by 16.9% year-over-year, with domestic traffic increasing by 20.2% and international traffic by 5.9% [4] - Consolidated available seat kilometers (ASK) increased by 11% from the previous year, with domestic capacity rising by 13.3% and international capacity by 3.1% [4] - The load factor improved by 4.2 percentage points to 84.2%, indicating that traffic growth outpaced capacity expansion [4] Cost and Expenses - Total revenues per ASK (RASK) were R$44.98 cents, down 0.7% year-over-year, while passenger revenues per ASK (PRASK) also decreased by 0.7% [5] - Cost per ASK (CASK) fell by 6.5% year-over-year, attributed to a 17% reduction in fuel prices and cost reduction initiatives, although partially offset by the depreciation of the Brazilian real [6] - Operating expenses increased by 3.8% year-over-year to R$4.31 billion, driven by a rise in total capacity and currency depreciation [7] Liquidity and Debt - Azul ended the fourth quarter with total liquidity of R$7.49 billion, an increase from R$6.27 billion in the previous quarter, while gross debt decreased to R$33.6 billion from R$27.9 billion [8] Guidance - For 2025, Azul reaffirmed its EBITDA guidance at R$7.4 billion [9]

Core Insights - The article emphasizes the importance of insightful analysis on foreign equities, particularly in emerging markets, to facilitate informed investment decisions [1]. Group 1 - The author has a background in research and operations management, contributing to various financial platforms [1]. - The focus is on providing analysis that empowers investors, highlighting the significance of understanding market dynamics in emerging economies [1].

Group 1 - The company is undergoing a financial restructuring, with an anticipated dilution of 85% [1] - The focus of Quipus Capital is on operational aspects and long-term earnings power rather than market-driven dynamics [1] - Most recommendations from Quipus Capital will be holds, indicating a cautious approach to investment opportunities [1] Group 2 - The article emphasizes the importance of understanding competitive dynamics within industries for making informed investment decisions [1] - A small fraction of companies are deemed suitable for buying at any given time, highlighting a selective investment strategy [1]

Core Viewpoint - MAX Resource Corp. has reported significant assay results from its Sierra Azul Copper-Silver Project, including a new target discovery and an increased exploration budget for 2025, indicating strong potential for large-scale copper-silver discoveries in the region [2][4][7]. Exploration Results - The exploration target at AM-13 has been expanded to 1,500 meters by 100 meters, with notable copper-silver mineralization identified over this area [6][11]. - Recent composite channel assay results include: - 1.6% Copper and 6 g/t Silver over 55.0 meters - 1.6% Copper and 7 g/t Silver over 49.0 meters - 1.0% Copper and 6 g/t Silver over 26.0 meters [6][16]. New Target Discovery - A new Manto-style target, AM-15, has been discovered approximately 1,000 meters northwest of AM-13, with early work suggesting a large target footprint [4][17]. - Initial assay results from AM-15 include: - 4.0% Copper and 35 g/t Silver over 2.0 meters - 0.7% Copper and 7 g/t Silver over 12.0 meters [20]. 2025 Exploration Budget - The company has approved a fully funded exploration budget of US$ 4.8 million for 2025, which is a 14% increase compared to 2024 [7][21]. - The budget will focus on three components: Drill Target Development, District Scale Exploration, and Basin Scale Prospectivity Analysis [21][24]. Geological Context - The Sierra Azul Project is located in a region with geological similarities to the Manto deposits of northern Chile, which have historically hosted significant copper resources [14][30]. - The project area spans 120 kilometers and includes three districts: AM, Conejo, and URU, with a total land tenure of 188 km² [30][38].

Financial Data and Key Metrics Changes - Azul reported a record revenue of BRL 5.5 billion, up 10% year-over-year, with a strong RASK of BRL 0.45 [14][15] - The quarterly EBITDA reached BRL 2 billion with a margin of 35.2%, and EBIT was BRL 1.2 billion, reflecting industry-leading profitability [14][15] - Overall CASK decreased by 6.5% year-over-year, with CASK ex-fuel remaining flat despite an 18% devaluation of the local currency [23][24] Business Line Data and Key Metrics Changes - The contribution of high-margin business units to RASK grew from 15% in Q4 2023 to 23% in Q4 2024, positively impacting EBITDA [18][19] - The loyalty program now has over 18 million members, with a 27% increase in gross billings ex-airline year-over-year [20] - The logistics business saw a 9% increase in international revenue for the full year and a 54% growth quarter-over-quarter [21] Market Data and Key Metrics Changes - Azul's capacity grew by 11% year-over-year, with a disciplined industry environment and encouraging revenue trends expected [16][27] - The company operates in a unique market position, being the only carrier in 82% of its routes, connecting over 150 destinations [10][12] Company Strategy and Development Direction - The company aims to grow its market presence by accessing previously untapped demand, focusing on expanding its network and fleet flexibility [10][12] - The Elevate plan has been integrated into the long-term strategic planning, focusing on efficiency and productivity improvements [24][38] - Azul is optimistic about future profitability, with a projected record EBITDA of BRL 7.4 billion for 2025 [27][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2024, including supply chain issues and currency devaluation, but emphasized the resilience of the business model [6][7] - The outlook for 2025 is positive, with expectations of significant revenue growth and continued operational improvements [27][40] Other Important Information - The company successfully completed a comprehensive restructuring, eliminating BRL 8.5 billion in debt and improving liquidity [30][34] - The restructuring included the issuance of new preferred shares and a focus on enhancing the capital structure [33][35] Q&A Session Summary Question: Update on major cash flow components for '25 and '26 - Management reaffirmed a BRL 7.4 billion EBITDA guidance, noting that a 2% fare increase would be feasible to maintain free cash flow guidance despite currency devaluation [45][48] Question: Expectations for fleet deliveries and capacity growth - The company expects a 10% to 12% overall capacity growth, with a focus on E2 deliveries and some retirements of older aircraft [52][55] Question: Status of the BRL 200 million equity raise - Management confirmed that controlling shareholders are expected to subscribe to the equity raise, which is part of the restructuring plan [58][62] Question: Clarification on the 2030 notes haircut and commercial agreements - The haircut on the 2030 notes was exchanged for cash and other commercial agreements, including future aircraft deliveries and maintenance reimbursements [72][74] Question: Insights on current demand environment - Management reported positive demand trends in January and February, with stable operations and no signs of slowdown in corporate demand [80][82] Question: Expectations regarding M&A with Gol - Management expressed confidence in the low overlap between Azul's and Gol's networks, which is expected to drive future growth [92][94]

4Q24 Results February 24, 2025 Disclaimer The information contained in this presentation is only a summary and does not purport to be complete. This presentation has been prepared solely for informational purposes and should not be construed as financial, legal, tax, accounting, investment or other advice or a recommendation with respect to any investment. This presentation does not constitute or form part of any offer or invitation for sale or subscription of or solicitation or invitation of any offer to b ...