Brazilian airline Azul has reached an agreement with Embraer to postpone deliveries of 59 E2 jets by as much as four years, the airline said Wednesday. Originally scheduled for delivery between 2020 and 2023, the airplanes will instead begin arriving in 2024 under the terms of the new deal. The aircraft carry a value of 4.2 billion reais ($712 million) at list prices.
Earlier steps taken by Azul to respond to the Covid-19 crisis included a major network adjustment that saw April capacity cut by 90 percent compared with the same month a year earlier. The company also reduced payroll costs and expenses by 50 percent over the same period.
“Azul entered this crisis as one of the most profitable airlines in the world,” said Azul CEO John Rodgerson. “There is no precedent for the scale of the impact of the pandemic on the Brazilian and global economy, and the moment of recovery remains uncertain. With the contribution of all our stakeholders, we believe that we will emerge from this crisis as an even stronger company.
“This agreement with Embraer to postpone the next aircraft deliveries until starting in 2024 is an important component of our recovery plan, which allows us to create a path to go through this crisis with liquidity. With this support, we are able to guarantee the necessary resources to optimize the airline that we will be in the future.”
For Embraer, the move by Azul comes as another serious blow to its cash-flow prospects following a first quarter that saw it deliver only five airliners. Embraer delivered three E175s, one E190-E2, and a single E195-E2 during the period, while negotiations with Boeing stalled over certain “unsatisfied conditions” related to the planned sale of 80 percent of Embraer Commercial Aviation.