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An Azul A320neo taxies in Manaus. (Photo: AirlineGeeks | João Machado)

Azul Still Not Sure About Bailout, Says CEO

While an eventual date for an airline bailout package in Brazil approaches, at least one airline is still reviewing whether such a package would be worthwhile or not. This is what John Rodgerson, CEO of Azul, told Reuters this Friday. The airline was the third-largest by domestic traffic in Brazil before the coronavirus crisis hit the country.

The executive told the news agency that, “our Board of Directors will meet next week to decide if the company will adhere [to the package].” The bailout package has been under negotiation since March when it was clear that COVID-19 would shatter demand for air travel in Brazil, between airlines and BNDES, Brazil’s National Bank for Economic and Social Development, a state-owned bank.

This is the first time an airline executive publicly considers the hypothesis of not taking the bailout proposed by the bank, as he highlighted the efforts Azul made to survive the crisis.

“In the end, the delay for the package was even useful, because we managed to renegotiate 98% of our debts, we won’t have any important [debt] maturity until the second half of 2021 and we are becoming a much leaner company,” said Rodgerson.

AirlineGeeks reported two weeks ago that, according to BNDES’ Director for the Participation and Companies Restructuring Division, the renegotiation of debts was a primary requirement for the bailout package to be concluded. The negotiations are in its final stages, with an eventual borrowing expected to be released in September.

“If I was sure that things will continue evolving like now”, said Rodgerson to Reuters, “we would not need the package.”

As was extensively reported throughout the negotiations, the proposed package would not necessarily be a no-brainer for airlines, at least when compared with bailouts from developed countries, where governments even granted cash for its local companies. With Brazil’s Federal Government in a delicate fiscal situation, BNDES could not afford to give grants, nor subsidize loans.

Instead, the package is expected to count both with a mix of loans from BNDES, private banks and capital offered in the open market, all within market interest conditions.

Reuters mentions that “for Azul’s President, the airline evaluates it could eventually attain better conditions in a prudential credit line.” The agency claims that, according to sources, the package is still with pending details, although its part of the loan should mature in 5 years, with an interest of CDI +4%, CDI being a variable proportion used as a local economic benchmark. It currently stands at around 1.9% per year.

Despite only now saying that giving up on the bailout would be not impossible, John Rodgerson was repeatedly outspoken when it came to the BNDES help package to the Brazilian airlines. As coronavirus made public activities restricted to the internet and live streams became popular, the executive’s insights on the industry could be more easily accessible, this included his views on the bailout.

Azul’s CEO, John Rodgerson, at the delivery of Azul’s first E195-E2. (Photo: AirlineGeeks | João Machado)

To InfoMoney, a market news outlet, early this month, the CEO said help from the government would be “different than a robbery,” referring to the BNDES package, remembering that an eventual loan would not be subsidized.

In the same week, at Azul’s first public event since the pandemic started, he told Veja that, “I get offended when people use the term ‘BNDES rescue’, because it is not a rescue, it is a very expensive thing and that generates a huge return to the Brazilian government, so I don’t like that [people] refer to this as a rescue because it’s not.”

Serving as a spokesman for Azul during the COVID-19 crisis, Rodgerson remains surprisingly optimistic, a remarkable trait of his administration, which began in 2017. To Reuters, he said that keeping the current recovery trend, the airline will return to profitability in 2021.


  • João has loved aviation since he was six-years-old when he started visiting his home airport in Porto Alegre, southern Brazil. As he always loved writing, in 2011, at age 10 he started his very own aviation blog. Many things have happened since then, and now he is putting all his efforts into being an airline executive in the future.

João Machado
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