Source: Azul Linhas Aereas

Azul S.A., “Azul”, (B3: AZUL4, NYSE: AZUL), the largest airline in Brazil by number of cities served and departures, announces today its expected results in terms of capacity, RASK, EBITDA, and leverage for 2022, EBITDA and leverage for 2023, and leverage for 2024.

Based on the best information available, we share below our expected results as follows:

1) Azul expects to increase capacity by approximately 10% in the full year 2022 compared to 2019.

We continue to serve and connect Brazil through our unique network and diversified fleet. In 1Q22 we reached a record of 151 destinations served. We also saw nine consecutive months of strong and improving leisure demand, and rapidly accelerating corporate bookings. As a result, we expect to grow total capacity by approximately 10% in 2022 compared to 2019.

2) We expect to increase RASK by more than 20% in the full year 2022 compared to 2019.

We ended 1Q22 with fares at record levels in both leisure and corporate segments. Compared to 2019, corporate revenue already recovered to more than 120%, while corporate traffic is still at 71% pre-pandemic levels, indicating potential for additional recovery. We remain confident of our revenue potential for 2022 and estimate our RASK to increase by more than 20% in 2022 compared to 2019.

3) We estimate 2022 EBITDA of R$4 billion and 2023 EBITDA of R$5.5 billion

We are sharply focused on executing our business plan for 2022, with an emphasis on expanding our unique network through disciplined capacity deployment and efficiency gains. Considering the current scenario of demand, fuel and foreign exchange, we expect to generate record EBITDA of R$4 billion in 2022, even with the impact of the Omicron variant in the first quarter. We also forecast an EBITDA of R$5.5 billion in 2023. This compares to our previous record EBITDA of R$3.6 billion in 2019.

4) Azul expects to end 2022 with leverage measured by Net Debt/LTM EBITDA starting with a 5, including cash and cash equivalents, short-term investments, and accounts receivable.

Considering the current scenario of demand recovery and revenue increase already taking place during 2022, in addition to our deleveraging strategy and EBITDA generation, we are confident that we can end 2022 with leverage starting with a 5 and continue to reduce our leverage organically, leading it to to start with a 4 in 2023 and with a 3 in 2024.

This leverage ratio includes cash and cash equivalents, short-term and long-term investments, and receivables and excludes convertible debentures.

These preliminary estimates exclude non-recurring events and additional impacts from the pandemic.