Azul Announces Embraer E2 Deferral

Brazilian carrier Azul Airlines has reached an agreement with Embraer to defer the delivery of 59 E195-E2s until at least 2024. Deliveries of the next generation narrowbodies were expected to take place this year and continue through to 2023.

The airline originally ordered 30 of the type in 2015 and added 21 more examples in December 2018. In January this year, the São Paulo-based firm reportedly tacked on a further 24 airframes, taking the total to 75.

The company said the deferment forms part of its “comprehensive plan” to conserve much-needed cash during the COVID-19 crisis. The decision by Azul will come as a blow to Embraer, which so far this year has struggled to deliver commercial aircraft.

This week, the Brazilian manufacturer blamed its weak delivery figures on preparations it made for a failed Boeing joint-venture. In the first quarter of this year, the airframer delivered only five examples, a drop of more than 50% compared with the same period in 2019.

Azul E195-E2
Azul Airlines has ordered a total of 75 E195-E2 aircraft. Deliveries were expected to take place this year and continue through to 2023. Embraer

John Rodgerson, Azul’s CEO, said: “[We] 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 optimise the airline for the future,” he added.

Like many carriers, Azul has reduced its capacity by more than 90% in response to the COVID-19 pandemic. It has also made headcount and salary changes which have reduced the payroll costs by over 50%.

In March, the company received approval from its shareholders to sub-lease 53 E195s to US start-up carrier Breeze Airways and LOT Polish Airlines. At this stage, it is not clear if the deferral will impact the fleet renewal and sub-leasing plan.