Brazilian airline Azul Linhas Aéreas has officially received approval from its shareholders to sub-lease 53 Embraer E195s to US start-up carrier Breeze Airways and to Poland’s LOT. The go-ahead was given yesterday during an Extraordinary General Meeting and gained 97% of the votes. In line with the airline’s policies, the controlling shareholder abstained from the vote.
A five-year plan
Azul Linhas Aéreas announced its five-year strategic plan for fleet renewal in January. The plan will see the airline operate only new-generation aircraft by 2022. Yesterday, shareholders voted in favor of sub-leasing 53 of its Embraer 195s to two other carriers. Breeze Airways and LOT, a Polish airline, will receive the carrier over the next two years as Azul phases them out of its fleet.
Of the shareholders’ vote Azul’s CEO John Rodgerson said;
“I would like to thank our shareholders for helping us to accelerate the transformation of our fleet, the main source of our growth and margin expansion in the coming years.”
The airline plans to replace the E195s with new-generation aircraft. It is currently Brazil’s largest airline, operating 916 flights per day to 116 destinations
Updating the fleet
Azul currently operates 145 aircraft; 56 Embraer E1s, four Embraer E2s, two Boeing 737 freighters, 33 ATR 72-600s, 39 Airbus A320neos, one A321neo, eight A330-200s, and two A330-900s.
The airline aims to operate 75 Embraer E2s, 80 A320neo Family aircraft, 12 Airbus A330 widebodies and 33 ATR turboprops by 2024. In the short-term, the airline plans to get rid of 28 of its Embraer E1 aircraft and add one A330, nine A320neos, and 25 Embraer E2s by the end of this year.
Azul’s CEO had some fond words for the departing E1s;
“For the past 11 years, the E195 has been the foundation of Azul’s business model and will continue to deliver a great experience to LOT and Breeze customers. Now that we have built the broadest network in Brazil we are ready to add larger, more fuel-efficient E2 aircraft to our fleet.”
He also pointed out that fuel is 35% more expensive in Brazil than in other parts of the world so moving to more efficient next-generation aircraft is the only financially-viable, long-term plan. The new aircraft will help the airline cut costs as well as increase revenue.
Breeze and LOT
Of the 53 aircraft which Azul will sub-lease, 28 will go to David Neeleman’s start-up, Breeze Airways. LOT has already acquired seven A195s from Azul and has signed for a further 18 with options for another 14. These will mean that LOT operates the fleet of Embraer aircraft in Europe.
As well as leasing aircraft from Azul, LOT has also recently signed a deal to wet-lease four Airbus A320. The airline is poised for rapid growth over the coming years. IT has recently announced new routes and is in the process of building a brand-new hub airport just outside Warsaw.
The Embraer 195s are going from one successful airline to another in the case of Azul and LOT. Will Breeze be as successful once it launches? We will have to wait and find out.