Brazilian airline Azul focused on cutting debt, adding capacity after IPO

Azul Linhas Aéreas Brasileiras SA is focusing on cutting debt after its recent IPO while rebalancing its fleet to add more capacity to long-haul flights, CE David Neeleman said Monday. Azul, Brazil’s third-largest airline by passengers, was able to swing to a profit of 55.3m reais (US$17.8m) in the first three months of 2017 from a loss of 66.9m reais in Q1 last year. Founded in 2008 by Neeleman—who also founded US discount carrier JetBlue Airways—Azul raised about $644m in its April IPO, with $406m in net proceeds to the airline. The airline has recently paid about 401m reais of working capital debt, which is owed mostly to Brazilian banks, and intends to gradually continue reducing its most expensive borrowing while keeping some cash available, taking advantage of still-high interest rates in Brazil, said Neeleman, who is also Azul’s chairman. At the end of Q1, Azul had total debt equivalent to about 3.7 billion reais, roughly half of it denominated in the Brazilian currency. “Every real of profit we make will be used to pay off debt,” Neeleman said.<br/>