Azul has confirmed that it will slow deliveries of Embraer's E2 jet and will also return A330neos to lessors, the airline said in an update on its ongoing Chapter 11 proceedings on Thursday (October 23).
With the lowered liabilities and “significant” reduction in rent expense, Azul said its updated plan has materially improved its EBITDA.
“The updated business plan conservatively assumes run-rate cost savings of R$747 million [$139.1 million] based on productivity improvements and finalised contracts already achieved,” the company said in the update.
Azul now estimates a net leverage of 2.5x upon emergence from its bankruptcy proceedings.
“The company also advises that some negotiations are still ongoing with certain aircraft and engine manufacturers (OEMs) and fleet lessors,” the document said.
“While not yet complete, the company is confident in the successful conclusion of these negotiations in the coming weeks.”
The document did not detail the extent to which the deliveries would be slowed, nor the number of A330neos to be rejected.
However, it is known that Azul leases five A330neo aircraft from Avolon.