RIO DE JANEIRO, June 6 (Reuters) - Brazilian airline Azul ( AZUL )
is stepping up capacity cuts amid higher jet fuel
prices linked to the Iran war, and the carrier will continue to
trim flying to protect cash in an uncertain environment, CEO
John Rodgerson said.
Rodgerson told Reuters the industry's largest companies were
reducing capacity to better align with demand at higher cost
levels, and Azul ( AZUL ) would follow suit, going beyond earlier cuts as
the conflict drags on.
"When we made our initial cuts, we thought the war would be
over by now," he said in an interview on Friday, in the build-up
to a meeting of global airline chiefs in Rio de Janeiro.
"But it's continuing, so we're going to continue to
opportunistically cut some frequencies, make sure that we're
only flying things that make sense."
Most of Azul's ( AZUL ) reductions in the second quarter were on
international routes, with further adjustments focused on
domestic frequencies rather than pulling entire cities,
Rodgerson said.
"Do you fly to Curitiba six times a day? Maybe with these
fuel prices, it should be four." The airline was prioritizing
its main hubs in Campinas, Belo Horizonte and Recife, he added.
"We're yet to pull cities, but that's always on the table.
But you first start with utilization and cutting frequencies.
"You don't want to be utilizing an aircraft 13, 14 hours a
day when fuel prices double."
Rodgerson said Azul's ( AZUL ) balance sheet after a major debt
restructuring put it in a stronger position than some peers to
adapt. It exited Chapter 11 proceedings in February with backing
from United Airlines and American Airlines ( AAL ).
Azul ( AZUL ) expects pricing to remain under pressure in the
seasonally weaker second quarter, but sees scope for higher
fares to stick as demand strengthens into the third and fourth
quarters, he said.