Azul Linhas Aereas anticipated the announcement of an agreement with Embraer to postpone the delivery of 59 E195-E2 aircraft. The jets, which were to be received between 2020 and 2023, will be delivered from 2024 onwards. The Brazilian airline is expected to detail the announcement in presentation to investors on Thursday, but said it is taking steps to preserve its business.
“Azul entered this crisis as one of the most profitable airlines in the world. The impact of the pandemic on the Brazilian and global economy has been unprecedented, and the timing of the recovery still remains uncertain. With the contribution of all of our stakeholders, we believe we will be able to come out of this crisis as an even stronger company. The agreement reached with Embraer to defer aircraft deliveries to 2024 is one important component of our comprehensive plan that allows us to create the liquidity runway for this crisis. With this support, we are able to ensure that we have the liquidity and the resources required to optimize the airline for the future,” said John Rodgerson, Azul’s CEO.
Azul has received five E195-E2 jets so far, all of them leased from Aercap. Embraer’s backlog contains an order for 51 units still pending. In January, Rodgerson had said the company would expand its order to 75 jets, but did not explain whether they would be leased or options converted into firm orders.
The deferral reveals a change in strategy at Azul that had decided to accelerate the withdrawal from service of the E195-E1 models, which were negotiated with LOT and David Neeleman’s new airline, Breeze.
With the brutal reduction in passenger demand, it is not clear whether Azul will maintain its larger planes such as the A320neo and A321neo or if it will preserve its oldest fleet and its capacity more aligned to the new reality.
In April, the company had reduced its flight network by 90%, but started to restore some smaller routes in recent weeks and to carry out emergency cargo and repatriation flights. The airline currently has a fleet of 138 planes.
Postponement is yet another blow to Embraer, which has Azul as the biggest customer of the new E2 family. To date, the manufacturer has only 171 firm orders for the E190-E2 and E195-E2 jets, a third of which are destined for the Brazilian airline.