Operator: Hello, everyone, and welcome to Azul’s second quarter earnings conference call. My name is Zach, and I will be your operator for today. This event is being recorded, and all participants will be in listen only mode until we conduct a Q&A session following the company’s presentation. If you have a question, click on the Q&A icon at the bottom of your screen and write your name and company. When your name is announced, please turn your microphone on and proceed. For those who are listening to the conference on the phone, press 9 to join the queue and 6 to accept the audio when requested. I would like to turn the presentation over to Thais Haberli, Head of Investor Relations. Please proceed, Thais.

Thais Haberli, Head of Investor Relations, Azul: Thank you, Zach, and welcome all to Azul’s second quarter earnings call. The results that we announced last night, the audio of this call, and the slides that we reference are available on our IR website. I’d like to caution you regarding our forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company’s future plans, objectives, and expected performance constitute forward-looking statements. These statements are based on a range of assumptions that the company believes are reasonable but are subjected to uncertainties and risks that are discussed in detail in our CVM and SEC filings. Also, during the course of the call, we will discuss non-IFRS performance measures, which should not be considered in isolation. Presented today will be John Rodgerson, our CEO, and Antonio Garcia, our CFO. Abhi Shah, the President of Azul, is also here for the Q&A session.

With that, I will turn the call over to John. John?

John Rodgerson, CEO, Azul: Thank you, Thais. Welcome, everyone, and thank you for joining us today. We are pleased to present Azul’s second quarter 2026 results. The quarter reflects the continued execution of our plan and the decisive actions we have taken to navigate higher fuel prices, protect liquidity, and build a stronger, more resilient company positioned for long-term success. As we go through the presentation, we will focus on operational reliability and customer experience, disciplined capacity and revenue management, liquidity and deleveraging, and the initiatives positioning Azul for sustainable value creation. In response to higher fuel prices, we proactively reduced capacity to protect cash and profitability. This is discipline. It reflects our commitment to align capacity with profitable demand in creating long-term value. This shows a clear change in mindset and acting in a responsible way to the macro changes.

At the same time, we continued with our fleet transition as we removed several wide body aircraft from our operation, and we will restore our international capacity throughout this year. By year-end, we expect to have only one ACMI remaining and a significant step towards a more reliable international operation operated with Azul aircraft and our own crew members. Our operational performance is the best in the region. As you will see on the next slide, Azul was the most on-time airline in Brazil in April, June, and July, and the most on-time airline in Latin America in July. We maintain the number one position month to date. This matters because reliability is a key driver of customer satisfaction, loyalty, and customer selection. The improvement is also reflected in our NPS, which increased 26 points in 2026.

A better travel experience strengthens customer loyalty, supports premium demand, and reduces the cost of operational disruptions. Together, these improvements reinforce our ability to capture premium revenue through our focus on high yield customers, enhanced customer experience, and differentiated products. This is how Azul grows revenue while maintaining disciplined capacity. It all starts with the customers. Reliable operation enhanced customer experience, translating to stronger yields, and disciplined capacity converts demand into profitability and cash generation. Together, they position Azul to navigate volatility and create sustainable long-term value. Moving to slide 4, our on-time performance reached 87.7% in July, making Azul the most on-time airline in Latin America. This follows leading performance in Brazil in April, June, and July, demonstrating the consistency of a great operation. This directly translates to our NPS, which increased 26 points since December 2025.

This reflects the direct impact of restoring fleet reliability, reducing operational disruptions, and enhancing the overall customer experience. Improving reliability is not only the right thing to do for our customers, but also a key driver of loyalty, premium demand, and higher yields. One example of this is our co-branded credit card, which just hit a record of over 1 million holders this quarter. Behind these improvements are our crew members. Azul’s service culture remains one of our most important competitive advantages. By focusing on operational reliability and customer experience, our teams are reinforcing the foundation of Azul and leading us to greater profitability. On slide 5, you can see our crew members in action. I want to pause here and especially thank them for their dedication, passion, and commitment. These qualities make Azul unique and bolster our customer-centric culture, operational excellence, and differentiated travel experience.

This is a competitive advantage that cannot be replicated simply by investing in aircraft. It is built by our people every day. Our product also reinforces this differentiation. Azul operates the most modern and efficient fleet. Our Embraer aircraft are equipped with seat back entertainment, live television, and Wi-Fi, providing customers with a differentiated experience, even on domestic flights. Combined with our service culture, this product advantage strengthens loyalty and supports our premium positioning. We have the best operational performance, the best hard product, and the best people in the business. All of that while maintaining the lowest unit cost in the region. With that, I’ll turn it over to Antonio, who will walk you through our second quarter results. Antonio

Antonio Garcia, CFO, Azul: Well, thank you, John. Good morning, everyone. Before discussing the results, I would also like to recognize our crew members for their dedication, passion, and commitment to our customers. Their focus on safety, service, and operational excellence is driving improvements in reliability and customer experience that differentiate Azul. Our people are the foundation for our culture and give us the confidence in our ability to execute our long-term plan. Turning to our second quarter results on slide 6, the metrics shown here underscore both the resilience of our business model and the effectiveness of our strategy. We reported operating revenue of BRL 5 billion in the second quarter record, supported by healthy demand, disciplined capacity management, strong high yields revenue, and continuous growth from our business unit. RASK increased 12.7% year-over-year to a record for second quarter of BRL 0.4341.

Adjusted EBITDA reached BRL 510 million, representing a 10.2% margin. We delivered the results in the weakest quarter of the season-wise, while also managing the significant 61% increase in fuel prices. We ended the quarter with immediate liquidity of BRL 3.7 billion, equivalent to 60.6% of the last 12 months revenue. These results delivered during the challenging quarter are exactly what we committed to our investor during the history. A disciplined airline with a stronger balance sheet and a clear path to cash generation and the ability to create value long term. On slide 7, highlights the resilience of our business model. Revenue increased 0.7% year-over-year, while capacity declined 10.6%, reflecting the disciplined capacity allocation and price actions designed to align with profitable demand and partially mitigate higher fuel prices.

Higher fares, strong yields, and solid contribution for our business unit supported both record net revenue and record unit revenue, with RASK increasing 12.7% year-over-year. On slide 8, you can see how Azul responded actively to higher fuel prices. We proactively implemented additional capacity reductions to our plan to protect liquidity and remain focused on long-term value creation. This was not reactive. Just to repeat, this is discipline. Capacity declined 10.6% in the quarter. This figure represents a combination of our restricted planned capacity and further actions taken as fuel prices increased. This proactive action enabled Azul to align capacity with profitable demand, preserve liquidity, and strength long-term financial performance. While total capacity declined, at the same time premium revenue increased 12% versus last year.

This reflects our ability to capture higher quality demand through four key actions: prioritize high-yield customer, enhancing customer experience, introduce differentiated premium products, and concentrate capacity on routes with a stronger premium demand. Our strategy is clear: prioritize revenue quality over volume. This ongoing mix shift supports stronger yields and enables Azul to sustain RASK growth while maintaining disciplined capacity. Now on slide 9, let me address another important part of our strategy, our business unit. These businesses diversify our revenue base, supported premium revenues, and enhanced the resiliency of Azul’s broader ecosystem. Second quarter 2026, average fares increased 9.5% year-over-year, while our business unit continued to contribute more than 20% of RASK, reinforced their growing importance to Azul’s business model and long-term value creation. Azul Fidelidade, Azul Viagens, Azul Cargo, Azul Conecta, Azul TecOps, and Azul Media are much more than just ancillary revenues.

They are strategic units with differentiated business model, diversify revenue streams, and attractive cash flow cycles. Together, this business create a more diversified and balanced revenue profile, strengthening Azul’s ability to navigate volatile periods and generate value beyond the metal. As shown in slide 10, fuel prices have remained highly volatile, reinforcing the importance of our flexible fleet, disciplined capacity management, dynamic pricing and diversified business unit, and strong cash management practice. Fuel remains primarily external variable affecting our profitability. Given the continued uncertainty around fuel prices and the broader macro environment, Azul is not providing full-year guidance for 2026 at this time. We are focused on our long-term strategy. Turning to costs, slide 11 shows CASK at BRL 0.4480 in the quarter, 26% higher year-over-year, primarily reflecting the 61.8% increase in fuel cost per liter.

However, Azul continues to maintain the lowest CASK in the region, demonstrating our structured cost advantage and the benefit of the hedge reference. CASK ex-fuel increased 12%, mainly reflecting the temporary actions, reduction in capacity, pilot retention plan and training, higher sales incentive to match market dynamics. I would like to highlight that the meaningful portion of the increase reflects the temporary fixed cost deleverage, as fixed costs were allocated over a smaller ASK base, rather than a structured deterioration of our cost base. It is in the opposite. We are confident that as fleet availability stabilize and capacity progressively resumes, this temporary deleverage should be reduced or diminished. The results of the resulting dilution and fixed cost, combined with our structured cost initiatives and more modern fleet, should strengthen operating leverage and support the normalization of CASK over time.

Moving to slide 12, as you can see, the impact of fuel prices on EBITDA in second quarter 2026 in a year-over-year comparison. Fuel represented an approximate BRL 749 million headwind compared with second quarter 2025. Through disciplined capacity management and price action, Azul recaptured 60% of its impact, contributing approximately BRL 448 million to EBITDA. This performance was achieved even in a challenged operating environment, with higher fuel prices and the historically weakest seasonal period in Brazil affecting demand and profitability. As a result, Azul delivered BRL 510 million in EBITDA in the quarter, demonstrating the resilience of our business model and our ability to respond to the changes in market conditions. Looking ahead, we expect much higher EBITDA levels in the second half of the year. Turning to slide 13, let me walk you through the recurring free cash flow here was nearly breakeven the quarter.

This is a meaningful achievement considering the seasonally weaker period and substantially higher fuel price and lower capacity. Please keep in mind that we continue to clean up remaining commitments from the restructuring process. During the quarter, Azul paid BRL 794 million in non-recurring items related to restructuring and normalization of deferred obligations. This payment will decline materially over time, reducing our cash outflows and support a stronger free cash flow generation. Our strengthened liquidity position also enabled us to reduce advances of credit-driven receivables during the quarter, supporting lower financial costs and greater financial flexibility. As Azul restore its fleet and resume capacity in line with restructuring plan, air traffic liability should increase as books continues to grow. This growth represents a source of working capital and should provide additional support to operating cash flow as capacity and revenue recovers.

Deliver nearly breakeven recurring free cash flow during one of the most challenging periods for a Brazilian carrier, while it is absorbing significant transition related to cash outflows, demonstrating the effectiveness of our restructuring. As non-recurrent payments decline and capacity normalize, Azul expects cash flow, cash generation strength further. On slide 14, you can see that Azul ended the quarter with BRL 3.7 billion immediately liquidity, as expected. Total debt declined by approximately BRL 13 billion year-over-year, reaching BRL 21.4 billion, reflecting successful completion of our restructuring. Leverage measured using immediate liquidity improved 2.8 times, 2.3 turns lower than second quarter last year. The substantial improvements in our balance sheet demonstrate the effectiveness of our restructuring and provides Azul the financial flexibility to navigate near-term volatility while continuing its delevering journey.

Now let me detail our debt maturity schedule on slide 15 shows the amortization profile of our loans and financial obligations. Azul has no material debt maturity before 2031, with the exit financial representing the only significant remaining obligation and its repayment concentrating that year. This provides approximately five years of visibility, materially reducing the refinance risk and gives us the flexibility to pursue strategic opportunities while generating the cash required to address this obligation. In addition, our restructuring permanently reduced interest payments by more than 50%, further strengthening our ability to generate consistent free cash flow and deleveraging over time. Just to finalize, in addition, we recently achieved an important milestone by obtaining approval of both FGTS and FNAC facility, as shown in slide 16. This program together provide up to BRL 4.6 billion of long-term financial in Brazilian reais at attractive rates. Combining for existing liquidity.

This facility provides additional financial flexibility throughout this transitional year and supports continued execution of our strategic plan. It is important to highlight we only had BRL 1.1 billion in government-backed finance in our restructuring business plan. The approval of up to BRL 4.6 billion reflects the confidence in Azul underlying business fundamentals. We expect to assess these lines in third quarter or fourth quarter 2026. With that, I will turn the call back to John. Thank you very much.

John Rodgerson, CEO, Azul: Thank you, Antonio. Moving to slide 17, as we look ahead, Azul is entering a new phase. Our operation is the best in Latin America. Our balance sheet is reset, and our strategy remains firmly focused on long-term value creation. Operationally, we will continue improving efficiency through higher utilization and greater reliability and lower operational disruptions. Today, 100% of our E2 aircraft are flying, as is our A320 aircraft, and we are restoring our international operations while reducing our ACMI exposure, positioning Azul for more reliable international operation, increasingly supported by Azul’s aircraft and its own crew members. Our international recovery will be completed by stronger partnerships with leading global carriers. The recent expansion of our codeshare partnership with JetBlue increases connectivity beyond our U.S. gateways, allowing us to offer customers access to additional destinations while improving the profitability and capital efficiency of our international network.

Financially, our priorities remain clear: preserve liquidity, enhance cash generation, and continue deleveraging. As our restructuring-related obligations decline, our non-recurring cash outflows should progressively normalize, further supporting free cash flow generation. We will pursue profitable growth through disciplined capacity allocation, deploying aircraft where they generate the highest returns, and leveraging strategic partnerships where they create greater network value. By improving service quality, restoring international connectivity, and attracting more premium customers, Azul will continue strengthening the competitive advantages that differentiate us. On slide 18, you can see that our objectives align with our board’s strategic priorities. We are targeting leverage below 1.5x and 150% increase in market cap by 2029. Achieving these objectives requires a sustained, rational, and profitable growth, consistent free cash flow generation and disciplined investment, and continued deleveraging. We have the right strategy, a stronger operational foundation, and the financial flexibility to execute.

As we move forward, we are confident in our ability to deliver stronger results, generate sustained cash flow, and create long-term value for our shareholders. I want to once again thank our crew members, partners, investors, and customers for their support and trust in Azul. With that, Antonio, Abhi, and I are available to take your questions as I turn the call over to the operator.

Operator: Ladies and gentlemen, thank you. We will now begin the Q&A session. Remembering that if you have a question, click on the Q&A icon at the bottom of the screen and write your name and company. When your name is announced, please activate your microphone and proceed. For those who are listening to the conference on the phone, press 9 to join the queue and 6 to accept the audio when requested. Let’s move on to our first question. The first question will come from André Ferreira, Sell Side Analyst from Bradesco BBI. Andre, we will open your microphone so you may ask your question. Please proceed.

André Ferreira, Sell Side Analyst, Bradesco BBI: Hi. Good morning. Thank you for taking my questions, and congrats on the work you’ve been doing in the past few years. I wanted to touch base on two topics here. First, on the CASK ex-fuel, which increased this quarter. It was mainly personnel, marketing, and maintenance. Just wanted to get some more color on the incentives given in terms of personnel and marketing, and also some more color on maintenance. What should your year-on-year delta look like for the rest of the year? The second question on the labored free cash flow, around BRL 80 million negative, but it was then affected by the non-recurring-

John Rodgerson, CEO, Azul: Just quickly to address the salary-related. I think obviously pilots are key and strategic to us. Pilots, we put in place some guarantees to ensure our pilots were fairly compensated as we took our flying down.

Operator: Hello?

Abhi Shah, President, Azul: It is just following the market in terms of corporate customers, in terms of attracting the high-yield customers. These customers book indirectly, so we have to go through travel agencies, corporate travel agencies, and making sure that we are partnering in a really positive way with these corporate travel agencies to make sure that we get not just our fair share, but what we should be getting in terms of corporate and high-yield revenue. It was very much aligned with our revenue targets and our ability to increase RASK this quarter, and most importantly, our ability to keep increasing RASK as the fuel curve evolves.

Antonio Garcia, CFO, Azul: Okay, André, Antonio Garcia speaking here. In regards to your question about those temporary measures, I would say something around BRL 100 million that should not repeat in the next year, for example, because we are talking about temporary measures, especially on the salary side. When you ask about the lever free cash flow, the line was broken. Could you repeat your question?

André Ferreira, Sell Side Analyst, Bradesco BBI: Yes. On the leverage free cash flow, it was affected by the non-recurring close to BRL 800 million in the recurring payments related to Chapter 11. Just wanted to know if there are any other tail payments left for the third and fourth quarter.

Antonio Garcia, CFO, Azul: Andre, thanks for the question. We are performing two-thirds of the payments in Q1 and Q2. The remaining one-third is going to outflow between Q3 and Q4. We should be very clean from 2027 onwards.

André Ferreira, Sell Side Analyst, Bradesco BBI: Okay, perfect. Just very quick, the first part, which was John commenting on the personnel, it got cut off. I am not sure if only for our team here.

John Rodgerson, CEO, Azul: Let me just repeat.

André Ferreira, Sell Side Analyst, Bradesco BBI: Yeah

John Rodgerson, CEO, Azul: Pilots are strategic to our business, and when we cut capacity like we do, that significantly impacts their pay. We put some kind of retention and bonuses in place for them, while they were not getting the full amount of their typical flying. That helps us maintain our pilot population as we now look to grow in the back half of the year, because as we replace our wide-body fleet and move away from ACMI, we have a significant amount of training. It is around short-term pilot retention, and we feel good about where we are right now, and what we did really was effective for us, and that will normalize as we go into the third and the fourth quarter.

André Ferreira, Sell Side Analyst, Bradesco BBI: All right. Very clear. Thank you, guys.

Antonio Garcia, CFO, Azul: Thanks, André.

André Ferreira, Sell Side Analyst, Bradesco BBI: Bye.

Operator: Okay, thank you. The next question will come from Guilherme Mendes, sell-side analyst at JPMorgan. Guilherme, we will open your microphone so you can ask your question, please.

Guilherme Mendes, Sell Side Analyst, JPMorgan: Hey, guys. Good morning. Thanks for taking the question, John, Antonio, Abhi, Thais. On the fuel recapture strategy, first, congrats, the 60% on the second quarter seems pretty impressive. Can you walk us through the strategy for the second half of the year? How have you been seeing demand evolving and the price elasticity on corporate and leisure segments? The second one is more of a follow-up on the guidance or not providing the guidance. I just want to understand the rationale of not providing at least a short-term third quarter guidance into the year. Thank you.

Abhi Shah, President, Azul: Thanks, Guilherme. Overall, we are in a really good place right now as an industry, I would say. As you know, second quarter is the weakest quarter. Of course, the biggest aggravating effect was the World Cup, right? It was a massive distraction in Brazil, and impacted June flown revenue and impacted June bookings as well. Now we are coming out of that World Cup winter break. We have seen really good momentum first couple of weeks of August, both on the revenue side, on the volume side, and the average fare side. I think the industry has done a really positive job of preparing the table for the next nine months, which is our best seasonality. So I think we have put ourselves in a really good place overall.

I see resilient demand on the agency side, on the corporate side, probably the highest ever corporate fares in the history of Brazil, probably is what customers are paying right now. The volumes are good, and the revenue is good. If you remember on the previous call, I mentioned that leisure demand, which is our direct channels, which is the site and the app, initially was waiting when fares jumped in the March and April timeframe, the first reaction to the war. Now we are seeing that demand recovering as well. So we are probably having our best B2C week this year, in the last six months easily. So I think momentum is good. Good seasonality going forward is very helpful. The industry has been very disciplined overall, I think doing all of the right things.

Again, our capacity posture is very helpful in allowing us to be aggressive and make sure that we are able to recapture the fuel. As we showed you, there is a new spike in the fuel curve going forward, right? So what we did is not enough, and this work has to keep going to make sure that we are now able to recover this fuel spike going forward as well.

John Rodgerson, CEO, Azul: If I could just add, it is a premium game, and I just want to reiterate, Azul’s hubs with 80% of the markets, we are the only ones that fly that helps Abhi get the revenue where it needs to be. We think we are being the real rational competitors in the market and the most around disciplined capacity. When we see, we see that is not the case as an industry as a whole. We are seeing a lot of additional capacity coming in from our competitors, but we are going to stay the course and do the right thing for our business. As it relates to the guidance this year, the fuel curve keeps moving 10% one week to the next, and it is about building credibility and pointing investors to the long-term strategy of Azul.

We are on plan for where we need to be as we go into 2027 and 2028 and 2029. That is why we want to point investors there. We feel very good about our third quarter, how it is coming in right now, but we just do not think there is value in providing guidance as the fuel curve continues to bounce around as much as it has.

Antonio Garcia, CFO, Azul: As Guilherme, as Antonio is speaking here, we would love to give guidance, but if you would do this, we would fail today. It means we want to keep consistency our message here. With this parabolic behavior in the fuel prices, you never know what is going to happen tomorrow. It means let us have a little bit patient, but the picture for second quarter is much, much better, as I said in my speech here. Much, much better.

Guilherme Mendes, Sell Side Analyst, JPMorgan: Very clear. Thank you, all.

Operator: Thank you. Moving on to the next question, it will come from Lucas Barbosa, sell-side analyst at Santander. Lucas, we will open your microphone so you may ask your question. Please proceed. Lucas? Just sent via text it. All right. Let us move on to the next question then. The next question will be from Gabriel Rezende, sell-side analyst at Itaú BBA. Gabriel, you may ask your question.

Gabriel Rezende, Sell Side Analyst, Itaú BBA: Hi. Good morning, John, Antonio, Abhi, Thais. I just wanted to follow up a little bit on your comment regarding fuel prices. Specifically on how the company is managing the tariffs increase looking into the second half of the year. Just trying to understand. I understand it’s a big challenge, everyone is being surprised by how much volatility we are seeing from one week to the other. Just trying to understand what the company, and perhaps what the sector is trying to do when managing tariffs increases looking into the second half of the year, considering that the sector does seem rational, companies are trying to pass through these hard fuel inflation. Just what perhaps can we expect into profitability, look into the second half of the year, due to this high volatility environment?

Also, if you comment a little bit more on the company’s premium strategy, targeting these more premium customers. Just trying to understand what are the main advantages that a company sees in targeting these customers, whether it’s perhaps competition, whether it’s less sensitivity to price increases, whether it’s higher margins, the overall factors that incentive the company to seek those customers. Thank you.

Abhi Shah, President, Azul: Yeah, Gabriel, I can start, and John can jump in. The industry is trying to maximize revenue, right? That’s obviously the number one priority, and that has extreme urgency given the way the fuel curve is behaving. As I mentioned, we’re seeing really good discipline on the fare side, and I think that given the seasonality now over the next 6 to 9 months, I think the customer behavior will be very positive. Now, of course, our capacity discipline helps us because we just have less. We can be more selective in the type of demand that we take. We don’t have to be more aggressive in terms of volumes like some of the other competitors here, because that are growing more, and that’s publicly out there. So allows us to be a lot more selective. Our network advantage, we have over 200 nonstop routes.

Nothing has changed in terms of the competitive dynamics. Only 18 of them I consider super competitive, where all three airlines are flying, and another 18 of them, I have some competition, but we have a large majority of the share on those routes. So really, our network position continues to be very, very privileged. The market is maintaining the overall discipline. And we of course, have the added benefit of having our capacity plan, which allows us to be even more resilient. I think the corporate customer is very favorable right now. We’re seeing strong dynamics in that sector. And we’re starting to see, I would say, for the first time since the war began, a really positive behavior from the B2C, from the direct customer as well, which kind of points towards the strong seasonality for the second half of the year.

This also goes very much in line with our initiatives on premium customer. Our credit card is, we think, by far the largest mix of premium credit cards with Infinite, Skyline, and Platinum. That brings us a large proportion of customers that are into our universe. We launched this year two new tiers in our loyalty program, which again, delivers benefits like 24-hour concierge service, airport service, other benefits like same-day change that our customers are really enjoying and are providing more stickiness to our network and to our universe. In addition, of course, to our vacations business, which provides a really strong cross-sell opportunity. Remember, not every customer is a corporate customer, but pretty much 100% of customers are leisure customers at some point, right? That allows us to have really strong cross-sell within the Azul universe.

Having access, growing this premium population allows us to increase revenue across the entire business.

John Rodgerson, CEO, Azul: Yeah, and a couple things I’ll just highlight on that. Going back to capacity, I think some of our competitors planned capacity assuming the war would end, right? I think everybody would rethink the amount of capacity they put in the system as it goes to the third quarter. We feel very good about the disciplined approach we made. We reacted quickly, obviously working very closely with our board and the guidance that they’ve provided, and so we feel good about that. But when you talk about premium customers, it comes down to having a great operation, and we have the best operation in Latin America right now. Abhi talked about the corporate customer, and I think over the last four or five years, Azul lost a little bit of its glow because we were fighting for survival. Azul is now back.

We’re investing in the product, we’re investing in our customers. You’re seeing a significant improvement in our NPS scores. You’re seeing the glow come back on the faces of our crew members as they deliver unbelievable great service on a daily basis. The operational reliability that we talked about is really, really important. The premium customer, there are customers in Brazil that fly us over 100 times a year, right? Being the most on-time airline really matters to them. Having the best product with Wi-Fi and television on board the aircraft really, really matters. Having the best network that Abhi has built over an 18-year period, the most destinations, the most connectivity, and really, really concentrating on our super hubs in Campinas, Confins, and Recife are really important to driving that premium revenue.

Gabriel Rezende, Sell Side Analyst, Itaú BBA: Thank you, John. Thank you, Abhi. That is very clear.

Operator: Okay, thank you. Moving on to the next question coming from Michael Linenberg, Sell Side Analyst at Deutsche Bank. Mike, we will open your microphone so you can ask your question.

Michael Linenberg, Sell Side Analyst, Deutsche Bank: Hey, can you guys hear me?

Operator: Yes. We can hear you now, Mike.

Michael Linenberg, Sell Side Analyst, Deutsche Bank: Sorry about that. Hold on here. Let me just. Apologize that, Abhi Shah. I was on different systems. I guess, two questions here. When we go back to liquidity as a percent of last 12 months revenue, Antonio, can you just remind us what is the right range for you? Number one, you are at just over 16% or just under 17%. As we think about the back half of the year, I know that you’re not giving us guidance, but you did say that EBITDA should be a lot better in the back half, the second half of 2026. If we incorporate that and the over BRL 400 million of debt payments, as well as call it that non-recurring cashflow charges, where should liquidity be by the end of the year? Again, what’s the right long-term range that you guys are aiming for?

Antonio Garcia, CFO, Azul: Thanks, Michael Linenberg, for the question. Our normal percentage should be around 20.

Based on estimates today, we are confident to end of this year. We have the access of this government financial lines even to back even more that we need. That’s why I’d say we should be above 20 to end of this year on the last 12 months revenue.

John Rodgerson, CEO, Azul: I also want to remind everybody that American Airlines has not yet funded, right? We’re still going through the antitrust process on the half. The technical team has approved it, and our expectation is that should get approved in the third quarter as well, so that’s an also enhancement to liquidity as we-

Antonio Garcia, CFO, Azul: And by the way, Mike, that was already for us, the level of liquidity we have today, that has been expected. Forget about the fuel price and the reduction.

Recap moment. We were expecting higher payments for the pre- and post-Chapter 11. That happens. We were also planning to access those line in Q2, didn’t happen, and also American. That’s moving to the right to Q3 and Q4. But I would say we are confident to be above 20 to end of this year from the revenue side.

Michael Linenberg, Sell Side Analyst, Deutsche Bank: Okay, great. Just my second question. Abhi, you made the comment you were feeling very good about how September quarter is coming in now. Can you just give us a sense, how much of September is booked now? Maybe even an early read, how much of December would be booked? It’s probably pretty low, it’s probably what? Like 10%, 15%. Your booked yields that you’re currently seeing, at least with the September quarter, just getting a better sense of how that revenue is trending. Thanks for taking my questions.

Abhi Shah, President, Azul: Yeah. Thanks, Mike. The booking curve has come in, especially as fares have gone up and the agencies are overachieving in that sense.

Michael Linenberg, Sell Side Analyst, Deutsche Bank: Okay.

Abhi Shah, President, Azul: We are talking about more than 50% of our revenue is inside 21 days, right? It is very close in, which is good in terms of filling in available seats at higher yields, but it also creates a lot of sweaty, nervous afternoons and evenings because you just look very close in about what is going to happen. That is one. Second of all, we also have to, when we look at year-over-year now for 3Q and 4Q, we have to remember that last year, July onwards, we implemented the new network, which already had significant capacity cuts. Last year, our third quarter was 16% above 2Q. Fourth quarter was 21% above 2Q. We are already now at this much higher base, and we are now having to push through in addition to that higher base.

We are absolutely seeing higher yields going forward, September, October. Like you said, fourth quarter is very low booked. I would say 15%, 20%, not even that much.

Michael Linenberg, Sell Side Analyst, Deutsche Bank: Okay.

Abhi Shah, President, Azul: But we are just managing close in now on a much higher base. It is close in demand. It is kind of white-knuckling it a little bit. But we feel very good about how the industry is positioned and given our capacity posture, how we are positioned.

John Rodgerson, CEO, Azul: Hey, Mike, I just want to highlight another thing on the international side. Our second quarter was down 25% year-over-year as expected as we transitioned the fleet. More than 50% of our customers flew on non-Azul metal when they flew international. As we re-put in and we relaunch our international product over the next two quarters, that has a significant improvement. It will also improve the booking curve as well, as international traffic is booked much farther out than the close-in that Abhi Shah is talking about. But also when we come out and tell our customers that now they are confident they are going to fly on our aircraft with a great product and on a much cheaper aircraft, we are excited for that as we move forward.

Michael Linenberg, Sell Side Analyst, Deutsche Bank: John and Abhi, is the close-in just because the fares are so high and people are just sort of taking that wait and see approach, maybe hoping for a little bit of fare relief as if fuel prices come down? What’s the main driver for that?

Abhi Shah, President, Azul: Yeah, definitely on the B2C side, so all the direct channels, the site and the app, we saw a wait and see approach. Now really we’re starting to see that customer come back in a very strong way. The corporate channel, and remember, so much of our network we’re by ourselves. That corporate customer really doesn’t have that many choices. That demand stays a lot more steady. If I just look at pricing. If I look at competitive markets pricing versus where we are alone pricing, the competitive markets since March have had six oscillations up and down six times, and now we are back on an upward trend again.

Michael Linenberg, Sell Side Analyst, Deutsche Bank: I see.

Abhi Shah, President, Azul: Our market, pretty much a straight line, kind of up and straight. So you have that kind of dynamic where you just have that audience, if you will, in our markets. Then the more leisure customer, the more sensitive customer takes a more of a wait and see approach. Now I’m seeing for the first time really since the war, those customers start to come back.

Michael Linenberg, Sell Side Analyst, Deutsche Bank: Okay. Makes a lot of sense. Thanks, everyone.

Abhi Shah, President, Azul: Thank you.

Operator: Thank you. Moving on to the next question will come from Savanthi Syth, sell-side analyst, Raymond James. Savi, we will open your microphone so you may ask your question.

Savanthi Syth, Sell Side Analyst, Raymond James: Hey, good morning, everyone. I was just wondering if you could remind me again what you’re expecting in terms of fleet over the next 12 to 18 months and just preliminary, I know international should start growing again next year, but just curious how you’re thinking about capacity between domestic and international as you go through the next 12 to 18 months.

Abhi Shah, President, Azul: Yeah. Hey, Savi. On the fleet side, remember in the restructuring, we really simplified the forward fleet. So we have three more E2s this year is all, and next year, five E2s on the domestic side. On the international side, we are in the process of re-optimizing our fleet. So we have received one A320neo so far this year. The next one is delayed of course, but it is going to come in the October-November timeframe. Thanks, Airbus. We also are getting replacement A330ceo aircraft. One is flying, the other one is on its way, and there should be three more plus two more. So replacing the wide body fleet, getting to 12 wide body aircraft by the end of this year. That is our baseline fleet. And really just five E2s a year is all until 2029.

John Rodgerson, CEO, Azul: But Savi, I want to just highlight a couple of things to help Abhi with this. Q2 was the bottom. So we will have the operating leverage as we move forward. We may be down slightly year-over-year, but remember, second quarter was down 10% year-over-year, so it was substantially down. For the first time in over four years, all of our E2s are flying because the GTF problem has been resolved. Also all of our A320s will be flying. So with the existing fleet that we have today, we have the ability to produce more ASKs, which is great from an operating leverage standpoint because we are not adding a bunch of leverage onto the balance sheet, but we will be able to produce more ASKs. But we are going to be cautious about it, obviously.

We are going to be the most disciplined airline in terms of capacity deployment as we move forward.

Savanthi Syth, Sell Side Analyst, Raymond James: I know. Just following up on that, I know you mentioned less reliance on ACMI. So how should we think about utilization of the fleet as we go forward? Where has it been and where could we see it?

Abhi Shah, President, Azul: Yeah. We’re flying the A320 fleet pretty much max, as much as we can. There are a couple of conflicting forces here, right? Obviously, fuel prices and utilization. Utilization is increased, nights, weekends, and stretching out the day, right? Those times of days typically also have lower unit revenues. We have to make sure that we balance out stretching out the day and nights and weekends with the fuel prices as they are. That’s why you saw a dip in utilization in 2Q start to come up now as we improve seasonality towards the end of the year. The A320s are flying pretty much as much as we can. The E2s as well. We have less E1s in the fleet now per design, so the E2s are picking up a little bit of the shorter haul network that brings down the utilization a touch.

But our sort of metrics are E2s, 12 hour plus, 11 and a half, 12 hours. A320s pushing 14 hours, A321s pushing 15 hours.

Savanthi Syth, Sell Side Analyst, Raymond James: Wow. That’s pretty good. All right. Thank you.

Abhi Shah, President, Azul: Thank you.

Operator: Moving on to the next question. The next question comes from Jan Spies, sell-side analyst at Morgan Stanley. Jan, we will open your microphone so you may ask your question.

Jan Spies, Sell Side Analyst, Morgan Stanley: Yes. Hello, can you hear me?

Abhi Shah, President, Azul: Yes.

Jan Spies, Sell Side Analyst, Morgan Stanley: Perfect. I have two questions. Basically one is a follow-up on the crew incentive program, and I just want to understand if that will be remaining in place as capacity stays relatively close to existing levels, or if it’s just a one-time item in that sense. Secondly, on the booking curve, you mentioned that a lot of bookings are happening closer to the date of travel, which I understand obviously gives you a bit of anxiety, but doesn’t also help you in the fuel recapturing process. If you could give any indication of how much fuel recapture completion you expect in the next few quarters, it would be very much appreciated. Thank you.

Abhi Shah, President, Azul: Yeah. I’ll do the second one first. Yes, you’re right. It leaves more seats to be filled at the better fares, right? So that is absolutely a positive in that regard. I think the fuel recapture, I hate to say it, but depends on the fuel curve. I hate to sound obvious here. But the fuel curve that we had three weeks ago, we were probably at 90% recapture by the end of the year. The fuel curve that we have now, that’s got another peak in it, we’re probably where we are now, which is 60% in that range.

John Rodgerson, CEO, Azul: As for the pilot salary retention, we expect that to normalize over the next couple of quarters. Again, it was to ensure that they weren’t hurt by the reduction in capacity and to make sure we retain our great pilots that we have.

Jan Spies, Sell Side Analyst, Morgan Stanley: Got it. All right. Thank you.

Abhi Shah, President, Azul: Thanks.

Operator: Thank you. Moving on to the next question, comes from Hamed Korzan, sell-side analyst at BWS Financial. Hamed, we will open your microphone so you may ask your question.

Hamed Korzan, Sell Side Analyst, BWS Financial: Hi, good morning. I just want to ask you about how you’re scaling your capacity back. Is it going to come back all at Q4, or is there a timeline as to how you expect your capacity to come back?

Abhi Shah, President, Azul: Yeah. It’s going to be over the next several quarters, especially as the international fleet comes in over the next six months. You will see Q3 still negative year-over-year, but less negative than Q2 was. You will start to see zero around fourth quarter, and then you’ll start to see positive low single digits, low to mid single digits for 2027. It’s going to take some time, especially as it takes time for these aircraft to get into service. As John mentioned, we’re extremely happy that the entire E2 fleet is flying again, and we should be at zero A320 AOGs in the next 15-30 days. That’s for the first time in the last many, many years. A combination of that with three to five E2s a year, you’ll see that inflection over the next couple of quarters.

Hamed Korzan, Sell Side Analyst, BWS Financial: I appreciate it. Thank you.

Operator: Thank you. Moving on to the next question from Lucas Barbosa, sell-side analyst at Santander. Lucas, are you able to ask the question? Lucas has sent the question by writing. We’re going to read it. Good morning. Thank you for taking my question. Can you walk us through your expectations of supply increase for the whole domestic market the second half of 2026 and 2027? Is competition adding significant capacity? How much can that impact pricing?

Abhi Shah, President, Azul: Yeah. Thanks, Lucas. This data is public, right? Anybody can pull the schedules. We just know what we see, which is we see GOL around 12%, 13%, 14%, 15% in domestic capacity. Then we see LATAM kind of in the high single digits right now, right? We did see them cut a little bit for second quarter when fuel first spiked. But I have not seen that yet for the second half of the year with this recent spike in fuel. Obviously, it’s a lot higher than where we are. We’re just very comfortable with our network and with our posture. Could it have an effect? Yes, it could, right? That’s why we think that we’re just being very disciplined and very responsible for the market overall.

Operator: Great. Thank you. We will now go to the closing remarks. I will ask John to please make the closing remarks.

John Rodgerson, CEO, Azul: I just want to thank everybody, and especially the Azul team, for all the work, and we look forward to meeting with you. I know we have several calls set up over the next couple of days, and Antonio will be in New York in early September. So we will have the opportunity to speak with many of you. We appreciate your support and look forward to having a great third quarter.

Operator: Thank you. This concludes Azul’s conference call for today. Thank you very much for all your participation, and have a good day.