SAO PAULO, Aug 13 (Reuters) - Brazilian airline Azul ( AZUL )

reported record second-quarter operating revenue on

Thursday, but core earnings fell 55% as a surge in fuel costs

after the oil shock related to the U.S.-Israeli war on Iran

squeezed margins..

The airline, Brazil's largest by cities served, cut capacity by

nearly 11% year-on-year to deal with higher fuel costs and as

part of its post-restructuring plan after emerging from a

nine-month-long Chapter 11 process in February.

* Total operating revenue rose 0.7% from a year earlier to

4.98 billion reais ($959.83 million).

* Earnings before interest, taxes, depreciation and

amortization (EBITDA) fell 55.4% to 510.1 million reais.

* Analysts polled by LSEG expected net revenue of 5.03

billion reais and EBITDA of 618 million reais.

* Azul ( AZUL ) reduced capacity by 10.6% but said unit revenue rose

as it implemented higher fares in response to the surge in fuel

prices.

* Average fares were up 9.5% year-on-year.

* Fuel cost per liter rose 61.8%; total aircraft fuel

expenses were up 41.2% to 1.96 billion reais.

* Total gross debt fell 37.8% to 21.4 billion reais

following completion of its financial restructuring.

* Adjusted net loss stood at 1.07 billion reais in Q2,

versus net loss of 475.8 million reais a year earlier.

($1 = 5.1884 reais)