Azul S A : Results Presentation 2Q20

2Q20 Earnings Results

August 13th, 2020

DISCLAIMER

The information contained in this presentation is only a summary and does not purport to be complete. This presentation has been prepared solely for informational purposes and should not be construed as financial, legal, tax, accounting, investment or other advice or a recommendation with respect to any investment. This presentation does not constitute or form part of any offer or invitation for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.

This presentation includes estimates and forward-looking statements within the meaning of the U.S. federal securities laws. These estimates and forward-looking statements are based mainly on our current expectations and estimates of future events and trends that affect or may affect our business, financial condition, results of operations, cash flow, liquidity, prospects and the trading price of our preferred shares, including in the form of ADSs. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to many significant risks, uncertainties and assumptions and are made in light of information currently available to us.

These statements appear throughout this presentation and include statements regarding our intent, belief or current expectations in connection with: changes in market prices, customer demand and preferences and competitive conditions; general economic, political and business conditions in Brazil, particularly in the geographic markets we serve as well as any other countries we currently serve and may serve in the future; our ability to keep costs low; existing and future governmental regulations; increases in maintenance costs, fuel costs and insurance premiums; our ability to maintain landing rights in the airports that we operate; air travel substitutes; labor disputes, employee strikes and other labor-related disruptions, including in connection with negotiations with unions; our ability to attract and retain qualified personnel; our aircraft utilization rate; defects or mechanical problems with our aircraft; our ability to successfully implement our growth strategy, including our expected fleet growth, passenger growth, our capital expenditure plans, our future joint venture and partnership plans, our ability to enter new airports (including certain international airports), that match our operating criteria; management's expectations and estimates concerning our future financial performance and financing plans and programs; our level of debt and other fixed obligations; our reliance on third parties, including changes in the availability or increased cost of air transport infrastructure and airport facilities; inflation, appreciation, depreciation and devaluation of the real; our aircraft and engine suppliers; and other factors or trends affecting our financial condition or results of operations, including those factors identified or discussed as set forth under "Risk Factors" in the prospectus included in our registration statement on Form F-1 (No. 333-215908) filed with the Securities and Exchange Commission (the "Registration Statement").

In addition, in this presentation, the words "believe," "understand," "may," "will," "aim," "estimate," "continue," "anticipate," "seek," "intend," "expect," "should," "could," "forecast" and similar words are

intended to identify forward-looking statements. You should not place undue reliance on such statements, which speak only as of the date they were made. We do not undertake any obligation to update publicly or to revise any forward-looking statements after we distribute this presentation because of new information, future events or other factors. Our independent public auditors have neither examined nor compiled the forward-looking statements and, accordingly, do not provide any assurance with respect to such statements. In light of the risks and uncertainties described above, the future events and circumstances discussed in this presentation might not occur and are not guarantees of future performance. Because of these uncertainties, you should not make any investment decision based upon these estimates and forward looking statements.

In this presentation, we present EBITDA, which is a non-IFRS performance measure and is not a financial performance measure determined in accordance with IFRS and should not be considered in isolation or as alternatives to operating income or net income or loss, or as indications of operating performance, or as alternatives to operating cash flows, or as indicators of liquidity, or as the basis for the distribution of dividends. Accordingly, you are cautioned not to place undue reliance on this information.

2

First time Brazilian carrier elected "Best of the Best"

	#1 Overall in the World
	#1 Airline in Latin America
	#1 Airline in Brazil
	#1 Economy in the World
	#1 Economy in Latin America
	#1 Low Cost Carrier in Latin America
	Tripadvisor Ranking
#1	#6
#2	#7
#3	#8
#4	#9
#5	#10

3

CARING FOR THE HEALTH AND SAFETY OF OUR CREWMEMBERS AND CUSTOMERS

Daily temperature checks of all crewmembers

Mandatory mask or face covering

HEPA cleaning filters remove 99.9% of airborne particles

Intensified aircraft cleaning

New boarding process: Tapete Azul (blue carpet)

• Displays seat numbers on floor during boarding
• Faster boarding while respecting physical distancing rules
• 21% increase in NPS
• Available on 70% of our flights by December 2020

4

FLEET FLEXIBILITY

Diversified and Right-Sized Aircraft for the Brazilian Market

Targeted Routes by Fleet Type

Cessna		17 aircraft	Low cost
	9 seats	per trip

ATR		33 aircraft
	70 seats

Embraer		53 aircraft
	106-136 seats

Airbus		42 aircraft	Low cost
	174-214 seats	per seat		ATR & Cessna		E-Jets		A320neo Family

5

INCREASE OF IMMEDIATE LIQUIDITY POSITION

Cash Balance

(R$ billion)

2.22.3

1.31.6

Debt Amortization

(R$ million)

Agreement to be rolled

over beyond 2021

2,386

30

2,356

0.9

0.6

					556
284		309	542		26
	210			296
74
	14		14			14		12

520

356

164

MarchJune

3Q20

4Q20

1Q21

2Q21

2H21 2024

Cash		Receivables		BRL		USD

6

OTHER SOURCES OF LIQUIDITY

• Strong balance sheet
• • No restricted cash
  • No minority interest in subsidiaries
• Wholly-ownedloyalty program
• TAP investment
• • Bond principal plus interest R$689 million
  • Equity stake R$65 million
  • TAP to receive 1.2B euros in support from Portuguese Government
  • Overwhelming shareholder approval of sale of equity stake and withdrawal of conversion rights

Azul Assets

(R$ million)

					1,363
				2,273
						6,644
		754
	623
			3,008
1,631
Cash	Accounts	TAP	Cash +	Deposits and	Unencumbered	Total Liquidity
	Receivable	Bond	Investments	Maintenace	Assets	Position
				Reserves

Valuable assets not typically found in other airlines

7

AZUL'S MANAGEMENT PLAN

UPDATE

8

AZUL MANAGEMENT PLAN: SUPPORT FROM ALL STAKEHOLDERS

Over R$7.0 Billion in cash savings and deferrals until December 2021

Crewmembers

Payroll initiatives aimed at adjusting to new demand environment

~40% salary reduction expected in 2H20

Financial partners

Commercial agreements to roll over amortizations beyond 2021 (not reflected in June financials)

Other

Negotiating with suppliers to postpone and extend payment terms

Provisional measure 925:

• Passengers refund after 12 months
• Postponement of fees payments

Lessors

Comprehensive renegotiation of lease terms

R$3.2 billion in working capital reduction until Dec 2021

Fleet

Deferral of 82 aircraft deliveries from Embraer and Airbus to 2024 and beyond

Breeze Aviation to take delivery of 12 Embraer E1s over next 18 months, including 2 in 2020

Sale of 2 E1s in August, generating excess cash of R$ 46 million

Accelerated exit of 3 aircraft previously scheduled for 2021

9

SIGNIFICANT LEASE LIABILITY REDUCTION

Strong support from leasing partners

• New payment profile resulting in R$3.2 billion working capital relief until Dec 2021
• Better cash generation than power-by-the-hour
• Lease liability reduction of 21% (present value of future payments)

New Lease Payment Profile	Lease Liability
(R$ billion)

	Demand recovery
		projection
				Negotiated lease
				payments
2Q20	3Q20	4Q20	1Q21	2Q21	3Q21	4Q21

-21%

15.9

12.5

March

December Expected

10

FASTER THAN EXPECTED NETWORK RECOVERY

Azul Routes Leadership

Network growth focused on domestic market

• True to original network strategy: only carrier in 85% of markets
• 88 destinations and 404 daily flights to be served by September
• Increase in network scale and connectivity with Latam codeshare

Only Carrier 85%

Most Frequencies 7%

Others 8%

Total Capacity Recovery

(% of previous year)

~60%

43%

32%

22% 23%

17%

12%

Apr	May	Jun	Jul	Aug	Sep	Dec
						Expected

11

CARGO PERFOMANCE

• Stable revenue even with dramatic network reduction
• Adapted passenger aircraft to transport cargo
• Prioritized high-yield express cargo
• 27% market share (#1 in Brazil)
• E-commercerepresented 17% of cargo revenue

Mainline ASK	Cargo Revenue
YoY Change	YoY Change
		48%

	-76%
-83%	-1%
2Q20	July	2Q20	July

12

WELL POSITIONED TO NAVIGATE COVID-19 CRISIS

• Successful execution of management plan with over R$7 billion in cash savings
• Liquidity runway greater than 24 months
  Largest domestic network with flexible fleet
• creates unique possibilities for network recovery
• Azul Cargo well positioned to leverage increasing opportunities in e-commerce and logistiscs
• Energizedbase crewmembers and loyal customer

13

I N V E S T O R R E L AT I O N S

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