Azul S.A. (AZUL): Business Model Canvas [Dec-2025 Updated]

You're looking at the engine of Azul S.A. right now, and honestly, it's a fascinating, high-stakes study in operational resilience while navigating a massive financial overhaul that began with their Chapter 11 filing in May 2025. Even while restructuring, the core business is firing on all cylinders, evidenced by Q3 2025 passenger revenue hitting R$5.29 billion and cargo adding another R$442.9 million to the top line. My two decades analyzing these complex situations tells me the key isn't just managing the R$37.3 billion gross debt, but how their dominant domestic network-serving over 160 destinations-translates into a successful emergence. Dive into the full Business Model Canvas below to see exactly how they are balancing this tightrope walk.

Azul S.A. (AZUL) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Azul S.A. (AZUL) built to navigate its Chapter 11 restructuring, which concluded with key agreements in 2025. These partnerships are critical for both immediate liquidity and long-term strategy, so let's look at the hard numbers supporting them.

The strategic equity partners, United Airlines and American Airlines, solidified their commitment following the May 2025 Restructuring Support Agreements. This wasn't just a handshake; it involved concrete capital commitments. The total potential additional capital injection from both US carriers is up to $300 million, earmarked to repay the debtor-in-possession (DIP) financing upon emergence from bankruptcy. To be fair, United Airlines already held a 2.02% stake before this latest move. CEO John Rodgerson indicated that post-restructuring, each airline could invest between $100 million and $150 million, securing board seats and a relevant equity stake.

Here's a quick look at the financing structure tied to these agreements and the overall restructuring:

The relationship with aircraft lessors and OEMs was heavily focused on deleveraging. Azul concluded negotiations worth over US$ 2.4 billion with these groups back in January 2025. This effort successfully renegotiated 98% of its obligations with lessors and OEMs. That resulted in about US$ 550 million in finalized agreements, with a potential debt reduction exceeding US$ 800 million. Specifically, the first step of the restructuring in Q1 2025 eliminated equity obligations to lessors and OEMs totaling approximately 3.1 billion reais (around $541.1 million) in exchange for issuing 96 million new preferred shares.

When it comes to fleet partners like Airbus and Embraer, the focus shifted due to the restructuring. You should note that Azul stated it will receive no Airbus deliveries in 2025, prioritizing the fuel-efficient Embraer E2 jets instead. Azul still holds unfilled orders for 44 E195-E2s from Embraer, though delivery terms are currently being renegotiated. The overall plan involves resizing the fleet to 170 aircraft by the end of 2025, down from the prior target of 201 aircraft. Still, the cargo division is growing, having incorporated two Airbus A321 freighters, which supports an expected revenue growth of between 25% and 30% for Azul Cargo Express in 2025.

For global reach, the interline agreement with Euroairlines Group is key for distribution outside of Azul's direct network. This partnership allows Azul to distribute its routes through the Spanish company's IATA Q4-291 plate in more than 50 countries. Honestly, Euroairlines supports distribution in over 60 markets in total. At the time of the agreement, Azul was serving over 160 destinations within Brazil and operated seven international routes, so this global reach is defintely a force multiplier.

• Azul's loyalty program, Azul Fidelidade, boasted some 19 million members in early 2025.
• The business segment (which includes loyalty) generated a positive impact of more than R$480 million in the first three months of 2025.
• Azul Cargo's segment represented 37% of the unit's revenue before the A321 freighter additions, with an expectation to reach around 50% by year-end 2025.

Azul S.A. (AZUL) - Canvas Business Model: Key Activities

You're looking at the core engine of Azul S.A. right now, which is operating under the shadow and structure of a major financial overhaul. The key activities are focused on maintaining service quality while aggressively managing the balance sheet through court supervision.

The network operation remains central to the business, aiming to maintain market leadership in connectivity across Brazil. This activity is critical for generating the necessary cash flow to support the restructuring efforts.

• - Operating the largest domestic network, serving over 160 destinations.
• - Executing approximately 850 daily flights.
• - Focusing operations on three primary hubs: Campinas (VCP), Belo Horizonte (CNF), and Recife (REC).

Fleet modernization is a continuous activity, even amid the Chapter 11 filing, as it directly impacts future cost structure and sustainability. The focus is clearly on newer, more efficient models.

It's a clear push to retire older, more expensive jets. Honestly, this transition is a major operational lever for post-restructuring profitability.

Managing the ancillary businesses is vital for non-fare revenue generation, especially while the core passenger business navigates bankruptcy. Azul Cargo Express, in particular, shows strong growth momentum.

• - Managing the TudoAzul loyalty program, which is projected to surpass the mark of 20 million registered customers in late 2025.
• - TudoAzul international flight redemptions are projected to grow by almost 80% in 2025.
• - Azul Cargo Express forecasts revenue growth between 25% and 30% for 2025, driven by the incorporation of two Airbus A321 freighters in February 2025.
• - E-commerce segment revenue share for Azul Cargo is targeted to rise from 37% to around 50% by the end of 2025.
• - From January to September 2025, international cargo tonnage grew 25.4%, reaching 29.1 thousand tons.

The most significant activity is the execution of the Chapter 11 financial restructuring process, which commenced on May 28, 2025. This process dictates many other operational decisions, such as the withdrawal from 13 cities and elimination of 53 routes in mid-August 2025 to bolster stability.

The primary financial goals of this activity include:

• - Eliminating over USD 2 billion in funded debt.
• - Securing USD 1.6 billion in committed Debtor-in-Possession (DIP) financing.
• - Targeting an exit date from Chapter 11 in February 2026.
• - Expecting to gain up to USD 950 million in equity investments upon emergence.

The U.S. bankruptcy court approved the restructuring process in July 2025.

Azul S.A. (AZUL) - Canvas Business Model: Key Resources

You're looking at the core assets Azul S.A. relies on to run its operations as of late 2025. These aren't just line items; they are the physical and intangible foundations of their market position.

• - Mixed and modern operating fleet of over 180 aircraft.
• - Extensive domestic network, covering 95% of Brazil's GDP.
• - TudoAzul loyalty program, a high-value, liquid asset.
• - Over 16,000 highly-trained Crewmembers.

The fleet composition is a critical resource, especially post-restructuring. While the baseline is over 180 aircraft, the May 2025 Chapter 11 filing indicated an operating fleet of 226 aircraft at that time. This included both mainline jets and regional assets, which is key to their extensive reach across Brazil.

The network itself is arguably the most significant barrier to entry for competitors. Azul S.A. is the largest airline in Brazil by cities served. This reach is supported by a high frequency of operations, connecting travelers to exclusive destinations from its main hubs in Campinas (VCP), Belo Horizonte (CNF), and Recife (REC). This physical infrastructure is what underpins the required network coverage claim.

The TudoAzul loyalty program is a wholly-owned strategic asset. It's considered liquid because the points liability can be monetized or used as collateral, as seen in past financing structures where secured notes were collateralized by cash flow and receivables generated by TudoAzul. As of year-end 2024, the program had more than 18 million members, with 1.1 million active members per month.

Your people are a massive resource, too. The company has consistently maintained a large workforce, reported at over 16,000 staff members around the May 2025 filing date, and more recently cited with around 15,400 employees as of December 2024. These Crewmembers deliver the customer service culture Azul S.A. emphasizes.

Here's a quick look at some of the scale of these operational resources based on recent filings:

Also, consider the strategic business units that generate revenue and feed the loyalty program. Azul Cargo, the logistics unit, reached R$ 1.1 billion in net revenue in 2024. Azul Viagens, the tourism operator, saw a 48% increase in travel packages in 2024 compared to 2023, leveraging the unique network flexibility.

The fleet composition is dynamic, with specific models like the Embraer E195, A320neo, A321neo, and A330 being central to the current operational plan, even amidst restructuring efforts. For instance, Azul S.A. was operating two A321-200(P2F) freighters as of February 2025.

Azul S.A. (AZUL) - Canvas Business Model: Value Propositions

You're looking at the core reasons why customers choose Azul S.A. over the competition. It really boils down to unmatched reach and operational reliability, plus the convenience of a full travel suite.

The network design is a key differentiator. Azul S.A. offers extensive connectivity, maintaining a competitive moat with no non-stop competition on an estimated 82% of its routes. This unique network structure represented 77% of the company's revenue as of Q1 2025, showing how central this coverage is to the business.

Operational excellence is another major draw. For instance, the superior operational punctuality reached an impressive 92.15% on-time arrival rate in August 2025, according to Cirium's global report. Honestly, for a traveler, getting there on time is often the most valuable service you can provide.

The integrated travel ecosystem helps lock in customer spend across different travel needs. This means you aren't just buying a seat; you're accessing a full suite of services that work together. Here's a snapshot of how the key non-flight units are performing, based on recent figures:

The commitment to a modern fleet directly translates into a better passenger experience and lower operating costs. Azul S.A. is actively managing this. As of October 2025, the operating fleet comprised approximately 200 aircraft, with a strategic focus on next-generation, fuel-efficient models.

This fleet modernization is a tangible cost-saver, which helps maintain competitive pricing and service levels. You can see the results in the fuel metrics:

• Fuel consumption per Available Seat Kilometer (ASK) dropped 1.4% year-over-year.
• Fuel consumption per ASK dropped 3% year-over-year.
• Achieved up to +2% monthly fuel savings from better management of Pilot Extra Fuel.
• The fleet includes Embraer E2 195s and Airbus A321neos.

The focus on operational precision, like the punctuality mentioned earlier, also drives efficiency. For example, the Cost per Available Seat Kilometer (CASK) dropped by 2.0% in 3Q25 compared to 2Q25, a direct result of cost-reduction strategies implemented as part of the restructuring process.

Azul S.A. (AZUL) - Canvas Business Model: Customer Relationships

Dedicated loyalty program (Azul Fidelidade) for points accumulation and redemption

The Azul Fidelidade program is expected to reach a milestone of 20 million registered customers by the end of 2025. As of May 2025, the program already boasted some 19 million members. The use of points for travel and non-travel rewards shows significant engagement.

Here is a look at the redemption activity for the first nine months of 2025 compared to the same period in 2024, and for the first half of 2025:

The top five most redeemed items on the Shopping Azul platform in the first half of 2025 included vouchers from Accor, the iPhone 15 (128 GB), an Electrolux pot set, a Shopee gift card, and an Uber voucher valued at R$300. For partner brands in Shopping Azul during the first half of 2025, Accor Hotels saw an increase of 334% in being the most sought-after, followed by Camicado at 150%, Netshoes at 103%, Casas Bahia at 92%, and Portal das Malas at 77%.

High-touch service model, including the Tapete Azul (Blue Carpet) boarding system

Operational improvements are reflected in customer perception metrics. The Net Promoter Score (NPS) recovered by more than 33 points in June 2025 compared to December 2024. In the second quarter of 2025, Azul transported nearly 8.0 million passengers, which was a 7.7% increase over the same period the prior year. The load factor for 2Q25 reached 81.5%. Historically, Azul was named the second most punctual airline in the world in 2023 by Cirium.

Self-service and personalized digital interactions via app and website

Digital channel performance is evident in ancillary revenue. Revenue from ancillary sales, or non-fare fees, was up more than 20% year-on-year in the first quarter of 2025, with a reported increase of 22% year-over-year in ancillary revenue for Q1 2025. The business segment generated a positive impact of more than R$480 million during the first three months of 2025.

Azul S.A. (AZUL) - Canvas Business Model: Channels

You're looking at how Azul S.A. (AZUL) gets its product-seats on planes and travel packages-into the hands of customers. The channel strategy for Azul S.A. is clearly multi-pronged, balancing direct control with third-party reach across its extensive network.

Azul's proprietary Online Booking Website and Mobile Application form a critical direct channel. While an exact percentage of total ticket sales attributed solely to these digital platforms isn't explicitly broken out in the latest reports, the strong performance of ancillary revenue is a good indicator of digital engagement. For instance, in the first quarter of 2025, ancillary revenue saw a 22% year-over-year increase. Also, the overall operating revenue for Q1 2025 hit a record R$5.4 billion, and for Q2 2025, it was R$4,942.3 million, showing high customer interaction across all sales points, heavily influenced by digital self-service.

Direct sales are also captured through traditional methods like airport ticket counters and dedicated call centers. These channels support the core network operations, which, as of October 2025, included operating over 800 daily flights to 137 destinations. The total operating revenue for October 2025 alone was R$1,900.6 million.

Azul Viagens (in-house travel agency) is a significant, growing channel for package sales, which diversifies revenue away from just the flight segment. This unit showed substantial momentum; in the second quarter of 2025, Azul Viagens saw gross bookings surge by over 45% compared to the second quarter of 2024. This business unit contributed to the overall strong operational performance, with business units accounting for 37.5% of EBITDA in Q2 2025. Passenger revenue for the third quarter of 2025 reached R$5.29 billion, a segment where package sales play a role.

The final piece involves third-party travel agencies and global distribution systems (GDS). These partners provide necessary reach, especially for corporate or complex international bookings that might not originate on the proprietary site. While the specific revenue split is not detailed, these external channels are integral to supporting the airline's capacity, which grew 17.5% year-over-year in Q2 2025. The overall financial results reflect the combined output of all these distribution methods.

Here's a quick look at some of the top-line figures that reflect the performance across these channels in the first half of 2025:

The growth in business units like Azul Viagens, which saw its gross bookings jump over 45% in Q2 2025, suggests that specialized, often digitally-driven, package sales are a key focus area for channel development. Also, Azul Cargo's net revenue grew by more than 14% in the same period.

You can see the company is definitely pushing its own platforms, given the strong ancillary revenue growth, but it still relies on the broader market access provided by third parties to fill the capacity that grew 17.5% in Q2 2025. Finance: draft 13-week cash view by Friday.

Azul S.A. (AZUL) - Canvas Business Model: Customer Segments

You're looking at the core groups Azul S.A. (AZUL) serves as it navigates its post-restructuring environment in late 2025. The customer base is diverse, but the focus is clearly on maximizing yield from the high-frequency domestic network while strategically growing international presence. Honestly, the mix of leisure and business travel is what gives Azul its unique resilience in the Brazilian market.

We can see the financial impact of these segments by looking at the contribution of the business units, which often capture the higher-yield corporate and ancillary spend. For instance, in the second quarter of 2025 (2Q25), these units accounted for 22.5% of RASK (Revenue per Available Seat Kilometer) and 37.5% of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This compares to Q1 2025, where they represented 23% of RASK and 35% of EBITDA. The preliminary October 2025 figures show an adjusted EBITDA margin of 37.7%, reflecting strong operational leverage from these customer groups.

Here's a quick look at how some of the key financial metrics related to revenue streams looked in the recent past, which gives you context for the revenue-generating segments:

The primary customer segments Azul targets, based on their established market focus, include:

• - Domestic Leisure Travelers, representing approximately 65% of passenger traffic.
• - Business Professionals and Corporate Clients (approx. 25% of passenger revenue).
• - Passengers in underserved regional Brazilian markets. This segment is core to Azul's initial strategy, as the airline is the only operator on roughly 81% of its routes as of 2024, connecting more than 130 Brazilian cities.
• - International Travelers on routes to the U.S. and Europe. International capacity saw a substantial increase of 36.8% year-over-year in 2Q25, and the focus is now strongly on the U.S. market after suspending the Paris (ORY) route.

The airline remains the domestic leader in Brazil by departing frequencies, holding a nearly 40% share. You should note that Azul is currently the third-largest airline in Brazil by international passengers carried year-to-date in 2025. Finance: draft 13-week cash view by Friday.

Azul S.A. (AZUL) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Azul S.A.'s operations, especially as the company works through its Chapter 11 reorganization. The cost structure is heavily weighted toward fixed commitments, which is typical for an airline, but recent restructuring efforts aim to shift this balance.

The fixed cost base is substantial, stemming primarily from aircraft lease obligations and depreciation. While Azul has been actively renegotiating these terms, such as the extensive settlement with its largest lessor, AerCap, which provided over $1 billion in cost savings, the underlying commitment remains significant. Depreciation and amortization is a key non-cash fixed cost; for instance, in the third quarter of 2025 (3Q25), this line item increased by 14.6% year-over-year, reflecting the fleet transformation process. To give you a sense of the scale of fixed commitments, the company's total operating expenses in 3Q25 reached R$4.47 billion.

Variable costs are dominated by jet fuel, which is highly sensitive to both global commodity prices and the local currency exchange rate. As per the required data point for the period, variable costs are dominated by jet fuel (Q3 2025: R$1.370 billion). This is a major component of the overall operating expense base, though fuel costs in 3Q25 did decrease by 8.3% year-over-year due to a 13.2% drop in the fuel price per liter.

Financial expenses represent another critical, non-operational cost area, heavily influenced by the depreciating Brazilian Real. Azul ended 3Q25 with a gross debt of R$37.3 billion, reflecting new debtor-in-possession (DIP) financing as part of its ongoing restructuring. The company's net debt to EBITDA ratio stood at 5.1x at the quarter end. The impact of currency fluctuation is clear when looking at related line items; for example, in the second quarter of 2025 (2Q25), foreign currency exchange net impact was a significant gain of R$1,775.1 million, highlighting the volatility associated with dollar-denominated liabilities.

Maintenance and repairs are defintely impacted by the depreciating Brazilian Real, as many parts and services are dollar-denominated. This pressure is compounded by the need to service a growing fleet. Here is a look at how some key cost components trended in recent quarters, showing the scale of the expense base:

The restructuring process is specifically designed to address these fixed and financial burdens. The updated Business Plan projects the company will emerge from Chapter 11 with a net leverage of 2.5x, significantly lower lease liabilities, and lower aircraft lease payments, aiming for a more competitive cost structure moving forward.

You should review the impact of the expected 4.2% inflation for 2025 on local costs like salaries and SG&A, which are also part of the overall expense base.

Azul S.A. (AZUL) - Canvas Business Model: Revenue Streams

You're looking at how Azul S.A. brings in the cash flow to power its massive network across Brazil, and it's definitely more than just selling seats.

The core of the business remains the movement of people. Passenger Ticket Sales generated R$5,294.1 million in the third quarter of 2025, contributing significantly to the total operating revenue of R$5,737.0 million for that same period. For the first nine months of 2025, total operating revenue hit R$16,073.8 million.

Here's a quick breakdown of the major components making up that top-line number for the third quarter of 2025:

Ancillary revenue is a critical, high-margin component that diversifies the income base beyond the ticket price. For instance, in the second quarter of 2025, these non-ticket sources, which include things like baggage fees and seat selection, accounted for 22.5% of the Unit Revenue (RASK). This segment showed strong growth, with ancillary revenue itself growing 21% year-over-year in 2Q25.

The logistics arm, Azul Cargo Express, is another distinct revenue stream that shows resilience. Its net revenue for Q3 2025 was reported at R$442.9 million, marking a 20.7% increase compared to the third quarter of 2024. This unit is strategically positioned, with expectations that e-commerce could represent up to 50% of its total revenue by the end of 2025.

The company also monetizes its customer base through its loyalty program, TudoAzul. This involves the Sale of loyalty points, often through co-branded credit card partnerships, which drives engagement and provides upfront cash flow. In 3Q25, the broader business units, which encompass cargo and loyalty alongside ancillary sales, represented 25.3% of RASK and contributed 29.7% of the period's EBITDA.

You can see the importance of these non-ticket streams by looking at the growth rates:

• Passenger Ticket Sales (Q3 2025: R$5.29 billion).
• Ancillary Revenue (e.g., baggage fees, seat selection, accounting for 22.5% of RASK in 2Q25).
• Cargo Services via Azul Cargo Express (Q3 2025: R$442.9 million).
• Sale of loyalty points through the TudoAzul program.

Finance: draft 13-week cash view by Friday.