Brazilian Carrier Azul Deepens Flight Cuts as Jet Fuel Costs Surge on Iran Conflict
RIO DE JANEIRO, June 6 (Reuters) — Azul, Brazil's leading airline by domestic reach, is speeding up cuts to its flight schedule as persistently elevated jet fuel prices, driven by the protracted conflict in Iran, erode earnings. Chief Executive John Rodgerson told Reuters on Friday that the carrier will continue to pare back flying to protect liquidity in an uncertain economic environment.
The comments come as global airlines grapple with a sustained spike in fuel expenses—typically one of their largest cost items—after the Iran war upended energy markets. Rodgerson said that “when we made our initial cuts, we thought the war would be over by now,” reflecting the industry's broader miscalculation on the conflict's duration.
Most of Azul’s reductions in the second quarter have targeted international routes, but further adjustments will focus on domestic frequencies rather than dropping entire cities, Rodgerson explained. “Do you fly to Curitiba six times a day? Maybe with these fuel prices, it should be four,” he said, underscoring a strategy of trimming utilization before pulling routes entirely.
The airline is prioritizing its main hubs in Campinas, Belo Horizonte, and Recife to preserve network efficiency. “You don’t want to be utilizing an aircraft 13, 14 hours a day when fuel prices double,” Rodgerson added, noting that pulling cities remains “always on the table” but starts with frequency cuts first.
Azul’s financial flexibility sets it apart from some rivals. The carrier exited Chapter 11 bankruptcy proceedings in February with backing from United Airlines and American Airlines, leaving it with a strengthened balance sheet. That cushion, Rodgerson said, positions Azul to adapt more nimbly than peers facing similar cost pressures.
Looking ahead, Azul expects pricing to remain under pressure in the seasonally weaker second quarter, but sees room for higher fares as demand picks up in the third and fourth quarters. The airline’s capacity discipline mirrors a broader trend across the Latin American aviation sector, where carriers are recalibrating networks to match a higher-cost reality.
Rodgerson spoke ahead of a gathering of global airline chiefs in Rio de Janeiro, where fuel volatility and capacity management are expected to dominate discussions.
(Reporting by Gabriel Araujo; Additional reporting by Luciana Magalhaes; Editing by Andrew Heavens)