Azul Updates Fleet Plan, Subleases 53 Embraer E195s to LOT and US Startup Breeze Aviation Group
Brazilian carrier Azul announced on Tuesday that they have updated their five-year fleet plan as they transition to next-generation aircraft. The carrier also announced that they have subleased 53 Embraer E195s to LOT and Breeze Aviation Group.
Today, Brazil’s largest carrier Azul announced an update of their five-year fleet plan, with the transition to more fuel efficient next generation aircraft. By 2022, the airline’s domestic fleet will consist entirely of next generation aircraft, resulting in one of the most profitable and environmentally fleets in the world. In Tuesday’s announcement, Azul’s CEO, John Rodgerson said,
“We ended 2019 with 42 next-generation aircraft and could not ne more excited about the economics as well as the high-quality onboard experience they offer our customers. The A320neos and E2s are the principal pillars in our goal to significantly increase revenue and earnings while we grow responsibly over the next five years.”
In a separate announcement Tuesday, Azul also announced that they have subleased 53 Embraer E195s to LOT Polish Airlines and U.S. startup Breeze Aviation Group. The sublease agreements are in line with the airline’s plan to replace their entire fleet of E195s with more efficient next-generation Embraer E2 aircraft. Commenting on the sublease agreements, Azul’s Rodgerson added,
“For the past 11 years, the E195 has been the foundation of Azul’s business model and will continue to deliver a great experience for LOT and Breeze customers. Now that we have built the broadest network in Brazil, we are ready to add larger, more fuel-efficient E2 aircraft to our fleet. Fuel in Brazil is about 35% more expensive than other parts of the world so it is particularly beneficial to Azul to move to next-generation aircraft as quickly as possible.”
Also commenting on today’s announcement, Breeze Aviation Group’s Chief Commercial Officer, Lukas Johnson said,
“The ability of the E195 to perform well with low-utilization and shorter-haul flying makes it a perfect complement to the Airbus A220-300, which will perform well in higher-utilization and longer-haul flights. We believe there is significant charter potential and peak season demand in the United States for an airplane of this seat count and cost structure. With no middle seats, the E195 has ranked high in guest comfort and satisfaction and we look forward to the introduction of the aircraft into our fleet.”
LOT Polish Airlines has signed a letter of intent to sublease 18 firm aircraft with options for up to 14 more, adding to the seven E195s previously acquired from Azul. In Tuesday’s announcement, LOT Polish Airline’s CEO, Rafal Milczarski added,
“The E195 jets are the core of our short-haul fleet. Beloved by our passengers, they have already proved their reliability and cost efficiency over the past few years and this is what we aim for while developing the flight network from our bases in Warsaw and Budapest. Thanks to that, in 2021 LOT will be the biggest Embraer operator in Europe and among the biggest in the world.”
Breeze Aviation Group, which was launched by Azul’s founder and controlling shareholder, David Neeleman, who also founded JetBlue and other airlines, is expected to sublease up to 28 aircraft, subject to approval by Azul’s shareholders, as determined by the company's bylaws. Azul will phase out all E195s by the end of 2022 and the company will continue to sublease the aircraft until the end of their original lease term, which is 4.7 years.
Azul is largest airline in Brazil, based on the number of departures and cities served. The carrier offers 916 daily departures to 116 destinations and operates a fleet of 140 aircraft. Azul employs more than 12,000 and has a network of 249 nonstop routes (as of December 31, 2019).