John Rodgerson, CEO of Azul, tells Graham Newton that aviation must continue to shout about being a force for good.
What can you tell us about Azul’s strategy?
Azul has an extensive network in Brazil, and we serve 100 cities that are unique to our network. Our driver remains accessing demand that nobody else has tapped into.
But we also have what I believe is the largest codeshare agreement in the world with GOL and that gives our customers great options throughout the region. Any time you can connect with another player, it is great for customers. The more people that can connect, the better. It strengthens aviation as a whole.
We’re really excited by the prospects because it has been a tumultuous few years. Remember, Brazil was one of the few countries that did not offer support for its airlines during the pandemic and there has been a significant currency devaluation over the years.
But core demand is strong. We’re flying to the United States from five different locations and Paris, Lisbon, and Porto are also among our destinations.
It’s not just about giving Brazilians the opportunity to travel though. We also want to bring people to Brazil. The country is roughly the size of Europe, and yet more people visit the Eiffel Tower than visit Brazil.
We aim to unlock that potential.
Keeping costs low is essential so where do you see the potential to save cost in future?
We can always do more when it comes to cost. But we do need support in our efforts. Brazil has one of the highest jet fuel prices in the world and though we have 3% of traffic, the country has more than 90% of aviation’s legal cases due to the consumer rules. That adds significant cost.
Public policy is something that Brazil needs to work on. If it could put the right framework in place, more people would travel, Embraer would be able to sell more aircraft and the social and economic development of the country would proceed at a faster pace.
For our part, we’re continuing to reduce time on the ground. The aim is to keep pushing our aircraft utilization high and above the level we had pre-pandemic.
How can you get the Brazilian government to understand the value of aviation?
It drives me crazy how this industry is viewed in the world. Aviation is truly a force for good and yet we are vilified for being a source of carbon. In Brazil, there was massive flooding in Rio Grande de Sul. Airlines were the first to arrive with goods for the affected people. And that happens worldwide. It is expected of the industry. Remember, in the pandemic it was airlines that got vaccines around the world.
We need to point these things out and have a louder voice. Aviation creates all manner of jobs, and it allows people to see this wonderful world. The world is a lot smaller because of aviation and I think that’s a great thing.
In Brazil, we are making progress and have a closer dialogue with the government than previously. We point out that whether it is an engineer at Embraer, an uber driver or someone selling to tourists on the beach, the whole spectrum of Brazilian society benefits from our flights. The majority of our fleet is Embraer, also a Brazilian company, which further drives economic activity.
And we are starting to see changes. Petrobras, the Brazilian oil company, has a new CEO who has declared that he wants to be an exporter of jet fuel. At the moment, Brazil is an importer. That could mark a major improvement in fuel supply and price.
What are Brazil’s prospects for supplying sustainable aviation fuels (SAF)?
Brazil will be the largest supplier of world of SAF in the world. The country has huge potential, a huge land mass, and we’re working with a couple of local manufacturers to turn this potential into reality. Brazil also plenty of renewable energy options with hydro and wind.
But we do need to be clear about SAF. It is prohibitively expensive. And we must not put the same responsibilities on carriers in developing countries as we do on carriers in the developed world.
Are we focusing too much on SAF and not paying enough attention to other sustainability requirements?
SAF is one of the ways we get to net zero by 2050 but it is not the only way. We need to study new technologies because, at this moment in time, SAF is too expensive to be the only solution.
And we must not forget the social aspect of Environment, Social and Governance (ESG) metrics. So much depends on providing jobs, including healthcare and education. And aviation provides jobs. I’m less focused on SAF and more on creating opportunities for Brazilians.
Azul is the first airline to properly cover the Amazon basin with air connectivity. It’s a region that is infamous for local people cutting down trees and other environmental damage for economic gain. With air connectivity, we can provide other economic opportunities for those people.
What other challenges /opportunities would you highlight in the region?
E-commerce has become increasingly important, and air cargo will certainly benefit from that. In Latin America, there is no pan-continental rail system and roads are also limited, so getting goods to people relies on aviation. Moreover, we are largely putting this in the belly of commercial flights that are already flying so there is a sustainable aspect to this too.
Has Azul achieved what you wanted it to?
Staring an airline is tough and I don’t think I would do it again!
But Azul has far exceeded our expectations. We started with 30 aircraft with options for 30 more—all Embraer. Azul now has a 200-strong fleet that includes widebodies. We’re flying to 160 destinations, and we have the largest codeshare in the world with GOL.
It’s been an unbelievable ride. When Azul first flew, it was about BRL1.5 to $1, now it’s more like BRL5.25 to the dollar. When most of your cost is dollarized that makes a huge difference. And then there was the pandemic.
I have no regrets but, like I say, I wouldn’t do it again.
If you could change one thing about aviation, what would it be and why?
Right now, we have to sort out the supply chain and particularly engine-related issues. Technology in engines has not progressed as fast as people thought, but we need to keep driving innovation forward and also get more time on-wing with existing engines.
