Azul beat profit expectations in Q2 as it doubled down on domestic flights, trimmed an international expansion, and saw a 21% jump in the number of passengers transported that outpaced capacity growth. The airline posted a profit of 345m reais in the quarter, while analysts expected it to earn 84.6m reais, according to a poll by Refinitiv data. “We have reduced our international capacity growth at the same time as we are strengthening our presence in domestic markets, where there is more potential to increase profitability,” the company said. Azul recently obtained the rights to additional flights in Brazil’s most desired domestic airport, Congonhas, located in Sao Paulo, after a bitter dispute with its larger rivals LATAM Airlines Group and Gol Linhas Aereas Inteligentes. The slots, as the rights are known, will allow Azul to boost its presence in some of the most heavily transited domestic routes. The airline also revised its outlook for 2019, raising its capacity growth guidance in domestic flights to up to 25% from up to 20%, while reducing its guidance for international flight growth to up to 15%, from up to 25%.<br/>
unaligned
Spanish union SEPLA is considering industrial action against Irish low-cost operator Ryanair in response to the possible dismissal of 100 pilots. Ryanair told SEPLA it was considering reducing pilot numbers during a meeting on 7 August, says the union. The cutbacks could include the closure of bases at Las Palmas, Tenerife South and possibly Girona. "The pilots' union is not willing to accept that dismissals occur," states SEPLA, arguing that these would be "the product of nefarious management by Ryanair". SEPLA adds that that it will now look at what action it could take, including strikes. Ryanair CE Michael O'Leary recently warned that the airline had a surplus of around 500 pilots and 400 cabin crew as a result of higher staff retention and delays to deliveries of Boeing 737 Max jets. Staff cutbacks would likely begin at the end of the year's summer season, he indicated. The airline has long been embroiled in a dispute with SEPLA over working terms for pilots. Although a recognition agreement was signed by Ryanair with the union earlier in the year, talks over a collective labour agreement have yet to bear fruit, and SEPLA is now accusing the airline of negotiating in bad faith. "The negotiations, which to date have been carried out with absolute slowness and lack of willingness to negotiate by Ryanair, are now contaminated by this unexpected announcement of dismissals," SEPLA complains. Ryanair did not respond to a request for comment on the dispute.<br/>
Ryanair has launched legal proceedings against its outgoing Chief Operations Officer (COO) Peter Bellew, whom low cost rival easyJet announced last month it had poached, Irish court filings showed. Ryanair boss Michael O’Leary told staff on July 11 that Bellew would step down at the end of the year. easyJet announced his arrival as its new COO at an unspecified date a week later. The legal proceedings were lodged in the Irish High Court on Aug. 6. No further details of the case were made available. Asked about Bellew’s departure on an analyst call last week, O’Leary said he could not comment on it for legal reasons but said all senior management at the Irish airline had pretty extensive non-compete agreements in their contracts. “I would not expect any senior manager in Ryanair to be moving to a competitive airline for a reasonably long period of time,” he said, adding the airline was in dialogue with Bellew regarding his six-month termination period.<br/>
Jeju Air blamed “sudden changes in external environment” as it slipped into a W31.4b operating loss for Q2, driven primarily by higher fuel costs. By comparison, for the quarter ended June 2018 it reported a W11.9b operating profit. Operating revenue for the three months to the end of June was up by 9.9% to W311b ($257m), driven by an 8.7% growth in its passenger business segment. The carrier notes that passenger revenues from domestic and Japanese routes declined slightly, but it enjoyed 33% growth on China routes, while Southeast Asia expanded by 19%. Jeju’s ASKs rose by 28%, driven by international expansion, however RPK growth of just 17.5% saw load factor fall by 5.5 points to 85.3% Revenue growth was, however, wiped out by a 25% increase in cost of goods sold, driven by a 28% hike in the carrier's fuel costs. The carrier reported a net loss of W23.4b for the period, versus a W16.5b net profit over the previous corresponding period.<br/>