Time to Resume Business Travel? Azul Thinks so; Shares Soar by Nine Percent
RIO DE JANEIRO, BRAZIL – Azul believes that sooner or later corporate travel will come back with vigor. The airline posted a loss of US$1.2 (R$6.54) billion in Q3 this year, but now sees strong indications of recovery and expects to grow with domestic travel, cargo transport and even corporate travel. Despite the billion-dollar losses, the company’s optimism has inspired the market and stocks were up by 9.24 percent at 2.30 PM on November 16th.
The return to air travel is occurring mostly through domestic tourism flights. In September, Azul’s domestic capacity represented 49 percent compared to the same period last year, and it is expected to exceed 80 percent by December. By the end of this year, Azul will again fly to 113 of the 116 destinations served in early 2020, a recovery of 97 percent in terms of cities served.
However, corporate travel is starting to gain momentum. Before the pandemic, this sector accounted for 61 percent of revenues and in April the share plummeted to five percent. In October, corporate sales represented 26 percent of total reservations. The average price of corporate tickets has also recovered. It is only four percent below last year’s amount and above competitors, says the company.
By the end of the year, the company expects that reservations for this segment will reach 35 percent of last year’s total – and 80 percent in the domestic market – with a recovery of 60 to 70 percent by July next year.
According to John Rodgerson, Azul’s CEO, this rebound is only a matter of time. With the implementation and disclosure of safety measures, “people are not afraid to travel. They are working remotely because they can. But after they lose the first deal because the competitor visited the client and they didn’t, people will fly again,” said the executive.
Source: Exame
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