Azul Trims Third Quarter Daily Cash Burn, Expands Liquidity Position
During the third quarter, the airline expected a daily cash burn of approximately R$ 3.0 million per day, ended up with a cash increase of around R$ 0.7 million/day. As of September 30th, the carrier’s liquidity increased to R$ 2.3 billion versus R$2.25 billion at the end of Q2.
On Tuesday (October 6, 2020), Azul announced that they reduced their daily cash burn and bolstered their liquidity position during the third quarter. While the carrier expected a Q3 cash burn of approximately R$ 3.0 million per day (USD $535,500), they ended up with a cash increase of around R$ 0.7 million (USD $124,959) per day. With severance payments excluded, cash grew by R$ 1.5 million (USD $267,900) per day. Azul closed the third quarter (September 30, 2020) with cash, cash equivalents, short-term investments and receivables of R$ 2.3 billion (USD $410.8 million), an increase from R$ 2.25 billion (USD $401.9 million) at the end of the second quarter. For Q4, the company is expecting an average daily cash burn of around R$ 2.5 million (USD $446,500) and has no significant debt amortization due to negotiations with financial partners. Azul projects that they now have enough liquidity for 30 months, without any new capital, but will continue to evaluate opportunities to strengthen their balance sheet. In Tuesday’s announcement, Azul’s CFO, Alex Malfitani, said,
“The combination of a leaner and more efficient cost structure with better-than expected increase in demand indicates that we are on the right track to restore our position as one of the most profitable airlines in the region. I would like to thank our crewmembers and partners for all their support during this process.”
Azul is the largest airline in Brazil, based on the number of departures and cities served. Prior to the global COVID-19 pandemic, the carrier offered 916 daily departures to 116 destinations and operated a fleet of 142 aircraft. The airline employs more than 13,000 and has a network of 249 nonstop routes (as of December 31, 2019).