Hi, everyone. Thank you for joining us today. I'm Thais Haberli, Azul's IR and FP&A Director. On behalf of all of Azul, I would like to extend a warm welcome to those with us here in New York, and to everyone joining us online. Before we begin, I would like to thank our more than 14,000 crew members and everyone that have been supporting us. Today is an extraordinary day for Azul. Not only we are hosting our Azul Day, but we are also back on the floor of the New York Stock Exchange, an important milestone that symbolizes the remarkable transformation of Azul and the beginning of a new chapter for us. Today's presentation is about much more than on aviation.
Today, we will share how our unbeatable network, customer-centric culture, diversified business units, and operational excellence position us to capture significant opportunities in the Brazilian aviation market and beyond. Our priorities are straightforward: generate sustainable free cash flow, continue our disciplined de-leveraging journey, and create long-term value for our shareholders.
We are building a company that is not only stronger today, but also is structurally positioned to deliver attractive and sustainable returns for many years to come. Presenting today will be John Rodgerson, our CEO, Abhi Shah, the President of Azul, Antonio Garcia, our CFO, and Fabio Campos, our Chief Corporate Officer. We will conduct a Q&A session following our presentation. If you are joining us online and have a question, please send your question to our investor relations email, invest@voazul.com.br. I will read your question here online.
Thank you for being here and for your continuing interest and confidence in Azul. We are excited to share our vision for the future and demonstrate why we believe the best chapters for Azul are still ahead of us. With that, I will turn the presentation to John.
Hello, everybody. Well, welcome. It's fun to be in New York. It's fun to have the bell ceremony today. We want to thank you for being on this journey with us. We have a lot of exciting things to talk about today, about how we're diversifying our revenue streams. Also, I'm really excited to have Antonio here with us. He's a new CFO. I think a couple of things. He joined us at a crucial time in our history. He also joined Embraer at a crucial time in Embraer's history. If you think about it, he joined Embraer in early 2020, right before the pandemic, right when Boeing pulled out of that deal. He was able to take Embraer from its lowest point to an all-time high. So I'm very grateful to have him here as a partner.
Of course, Abhi's been with me on this journey for over 18 years. We have Fabio here with us, who's representing the rest of our leadership team who's in Brazil, because we have more than 900 flights to deliver today. We want to be the most on-time airline and take care of our 33 million customers.
I think today is going to be pretty interactive as we go through, but we're going to walk through a couple of things about Azul. You know the network. We've been talking about the network for a long time. The customer-centric culture that we have at Azul, really interesting. Post Chapter 11, a 25-point increase in our NPS scores, really focusing, we're going to talk a lot about this today on the high-value customers overall. Structural cost advantage, Azul has the lowest unit cost in Brazil.
When you think about it, to have such a high value for our premium customers and still have the lowest unit cost, that's really unbeatable in the market overall. We're very happy about that. Our diversified revenue streams. I think as you think about it, we have customers that fly us once every four years. We have customers that fly us weekly. We have customers that fly us multiple times a week. But the idea of these diversified revenue streams is to allow us to generate revenue from our customers even when they're not flying. That's our credit card, which we just have over 1 million credit cards in circulation right now. That's pretty exciting for us. The customer may only fly us three, four times a year, but we have the ability to generate revenue from that customer every single day.
Our club, our vacations business, and we're going to talk a lot about our partnerships that we have. The diversified streams is really, really important, and I think that's a massive difference from where we were when we took the company public in 2017. You're going to see how much of our revenue is coming from that. Our strengthened balance sheet. This is something that we're very proud of. We exited at 2.4 x levered. That's a great starting point for us. Obviously this engine of an airline that continues to generate a lot of EBITDA and a lot of operating cash flow. As Antonio will walk you through how we've cleaned up the balance sheet through that. Thais, go on to the next slide. Again, just the main pillars here, a strengthened balance sheet, a sustainable growth focus.
This is something that's really key. I think as you looked at Azul in the past, we were growing double digits a year. This is a much de-risked business. We will be back to a growing airline. Thank goodness this year is not a growth year for us. We're actually down in capacity year-over-year. It's a great time to be down in capacity, as we've seen. We have a much more sustainable business model, and we have a saying inside of Azul, "Earn the right to grow." The way you earn the right to grow is generating cash. As you generate cash, that's how you earn the right to grow. I think one of the things I'm most proud of is that we have the two premier airlines.
One is still pending antitrust approval. United Airlines and American Airlines have both decided to invest in Azul. That's a pretty remarkable thing to have those two airlines come together and invest alongside of us. We've had them as partners in United Airlines for more than 12 years. Really excited they've been on our board. Here shortly, we look forward to having American Airlines come in and help us build a stronger airline. That's really a key differentiator. They had the ability to invest in other airlines, but they decided to invest in us. They decided to invest in our balance sheet, and we're really excited about that. As you take a look at the other changes, we've gone from being an owner company, with David Neeleman, our founder, who had the dream of building Azul and had the controlling shares.
We're now a true corporation, right? I think that's exciting. I think it's an exciting change. It's an improved governance structure overall. David is still with us as the chairman of the board. Kind of having the best governance out there now, I think that's an exciting change as well. As you look at it, having great strategic partners like United and American, our existing shareholders have nominated a couple of people to our board, and our strategic committee. We have the best governance out there, which is really exciting as we move forward. I wanted to highlight a couple of things on here, because I think it's a 10-year look. The reason why we went back is because we were here in the New York Stock Exchange roughly 10 years ago when we took the company public.
As you look at some of these things, right? We're up two times in ASKs, three times in EBITDA. We have a little mistake here. One of these is revenue, then one is EBITDA. This airline today is twice as big in terms of capacity, three times as big in terms of revenue, and 3.8 x as big in EBITDA. Here we've passed through. We're a full turn lower in leverage than we were when we went public, right? Think about that for a second. Here we are, 10 years later. We're three times the size in revenue, 3.8 x the size in EBITDA. It's a great starting point for new investors to come in.
Because when we took the company public in 2016, we took the company public for roughly a BRL 2 billion market cap. In a period of less than four years, we took the company from a BRL 2 billion market cap up to a BRL 5 billion market cap, right? Delivering on our promises that we had made to the market. Now we're at a similar starting point with a much larger company, much more cash generation, and much lower leverage.
I think I like to talk about Brazil, because it's kind of my adopted home country. If you see the size of Brazil, it's a massive country. I was having dinner last night with one of our banker friends, and we were talking about the size of Brazil. The north of Brazil is closer to Canada than it is to the southern part of Brazil.
Think about that for a second, right? Sometimes we're very U.S.-centric, and we forget the size and the magnitude that Brazil is. If you're in the eastern part of Brazil, you're actually closer to Africa than you are to the western part of Brazil. Brazil is a massive country. It's the size of the continental U.S.A. I often have friends say, "Oh, I'm going to visit you in Brazil. I'd like to go to Foz do Iguaçu, I'd like to go to Noronha, and I'd like to go to Manaus." I'm like, you realize that's like going L.A. to New York and then Florida. This is a massive country. Brazil is the breadbasket of the world. We still believe there's a tremendous opportunity for growth in Brazil.
You can see that Brazilians still travel less than Argentines do, less than Colombians do, less than Chileans do. Our diversified model that Abhi will walk you through truly serves all of Brazil. Our ability to serve all of Brazil truly differentiates Azul from anybody else. This is our route network, 137 cities served. I think our next closest competitor is about 60 cities served. There's about 80 cities that only Azul is serving today. We truly have the breadth all over Brazil, right? Our main hub in Campinas that Abhi will talk about today, Recife, Confins. We fly all throughout Brazil to so many different destinations. Where we fly internationally, we are the only ones that fly internationally, right? I think that's an important distinction.
There's plenty of people that serve the Guarulhos Airport or the Galeão Airport. We are the only ones serving internationally, the Campinas Airport, Confins to the U.S., and Recife to the U.S. We are the only ones doing that service, which makes a big difference. As you look today at the network, I often talk about this, is that we have two really good competitors, right? Our two competitors, their ASKs are concentrated on three markets, Rio, São Paulo, and Brasília. Every time one of my competitor's planes takes off, there's a 92% chance it'll take off or land in one of those three cities. For them, Brazil is about the size that you thought it was. Right? About an hour flight to get everywhere around because it's about an hour and a half flight to each of those cities.
When you think about Brazil and what is Azul's Brazil, it's a massive country with massive breadth and a lot to be done. I think you can see that through this. We like to fly where we can dominate in a market and where we can really make money. You can see the overlap that we have on this slide with our competitors, is truly unique where we are, whereas our competitors really fly on top of each other, right? When you get to more challenging environments like a spike in fuel prices because of war, the ability to pass that along makes a difference in terms of how you're operating your business model. I talked briefly about this at the beginning. Azul is not just an airline.
I think this is really, really important to go through each of these business units in detail. We'll do that today. Our loyalty business, I think everybody in the U.S. knows how important the credit card relationship is to the airline. In Brazil, we have the best credit card by far, and we'll talk you through that today. In addition to that credit card, we actually sell points to all of the banks in Brazil. We have a exclusive credit card with Itaú today, but we sell to Bradesco, we sell to Caixa, to Banco do Brasil. We actually sell to various different banks. We have our Azul Viagens in Brazil today. This drives a couple billion in revenue on an annual basis. Our Azul Logística, where we're very happy to be Amazon's number one partner in Brazil.
Our Azul TecOps, which is a growing business in Brazil today because of the labor cost advantage that Brazil has. We have the largest hangar in Latin America as well, which helps that business. Our Azul Conecta that Fabio will walk you through today. Then Azul Media. I think one thing I'm excited about is we're now starting to monetize our platform onboard our aircraft. All of our aircraft have live TV onboard the aircraft, have televisions at every screen. Our ability to monetize that is really important. You're going to see how much of our revenue is coming from diversified streams going forward. Many of these, as I talk about are you can make money when the customer is not traveling.
If you're selling media onboard the aircraft to one of your customers, like Itaú or Santander, those companies are actually advertising onboard our aircraft. I don't need them to travel to actually bring in revenue from them. It all comes down to, and we have some of our great crew members here with us today that helped us ring the bell this morning. We are a people business, and our customers know it because we take really good care of our people, and our people are very passionate. We were voted one of the best places to work by Time Magazine. We consistently get all of the top awards in Brazil, and we continue to deliver a great customer experience. I'm going to walk you through that on the next couple of slides because this is something I'm really proud of.
I think we're the only ones that have televisions onboard our aircraft. One of our competitors is getting E2s, and I always say they keep showing the outside of their E2 because they don't want to show the inside, because mine has televisions onboard the aircraft. It's a differentiator for us. Go back a slide, Thais.
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As you look at this, obviously having snacks, but what's the experience? The experience is when our flight attendants connect with the customer. These are just notes that I received in my WhatsApp just this week. These are our flight attendants writing handwritten notes. In today's day and age with AI and chatbots, to have a flight attendant or an airport agent take the time to write a handwritten note to hand it to a customer, that's what makes Azul special. I think that's really exciting to see. You see how often this happens, and you could see what's happening with our NPS as we kind of are now, we're back. I think that the message today is that Azul's back.
This is the Azul that everybody knows, it's actually a much stronger Azul, much more diversified revenue streams, that mojo that we've always had at Azul that maybe we lost because of the pandemic and the fight that we had over the last couple of years, we're back now. You feel that from our crew members when they deliver the experience on a day-to-day basis. Couple of other things as you go forward. We talked about this. Go to the next slide, Thais. We have Azul Concierge. I think as you look at the U.S. airline business, and we look at our partnership with United Airlines, that they've been in our boardroom for quite some time. It's the high-value customer that matters. I think that that's, all customers matter, but it's the high-value customer that we need to take really, really good care of.
It's those people that are traveling with us on a weekly basis, that are traveling with us on a pretty consistent basis. We have this Azul Concierge product, where we deliver the customers to the airplane in one of our BYDs, and we have a partnership with BYD. The cost of the cars for us was nothing. We get to advertise their brand, we actually get to treat our customers really, really well in this concierge product. I think everybody's going after the high-value customer. Everybody has their own version of this, I think we have the special sauce, which is our people, I think that makes a big difference. This is our Azul Comfort. We're actually adding a differentiated product onboard our international flights today. We're excited about that, the economy premium product that we're seeing.
We're seeing that that is what's truly driving revenue. It's not just economy seats anymore. It's actually the premium product, even upgrading from coach into a premium economy, they drive a lot more revenue. This is our new lounge that we have in São Paulo. We partner together with Itaú, which is the premier bank, with our lounge as well. You get to see some of the product offerings. This is an annual event that we do every year to recognize our top crew members inside of the company. These are the ones with the highest NPS scores. They've been voted by their fellow crew members, that recognition event is really, really important for our crew members, they get a star on their badge when they win this event.
For those of you that are in this World Cup phase right now, we had a little bit of a sad week, I'll admit. Brazil was knocked out of the World Cup, but Brazil is the only country in the world that has five stars. We've won the World Cup five times. That's why we root heavily against Germany and Italy, because they have four stars. We want to remain with five stars. As we look at this, when you win this event, you get a star on your badge. Other crew members recognize that you are one of the elites. That is something that's very exciting. We actually give the crew member a new badge with the star on it's pretty exciting for our crew members.
I'm going to turn it over here briefly to Fabio to talk about our partnership with the CBF. I think this was important as we exited to support and to basically tell the world Azul's back. To be the official sponsor of the Brazilian football team. It's a great way to turn the page on the past, look forward. Football is everything to Brazilians. I don't know, Fabio, if you want to comment a little bit on the partnership with the CBF.
I do think I have to say, I think it's cute how the U.S. actually thinks they're into soccer now just because the World Cup. Starting next week, nobody's really going to watch soccer again for another four years. That's not the case in Brazil, right? Brazilians are all about soccer, for us, being the sponsor, not only the sponsor of the men's team that played in the World Cup now, but we're actually the sponsor to all of the national teams, so the women's soccer team, beach soccer, a roll of them. Brazil is actually hosting the Women's World Cup next year. We're very excited. We actually had a friendly with the U.S. just three weeks ago, we did win, so that's good.
We split. Brazil won one game, and the U.S. won one game.
We won one game. That's what matters. Like John mentioned, this was a lot about, this is the next phase of Azul. This is a five-year partnership that will take us through the 2030 World Cup, which is the 100th anniversary of the World Cup. We're very proud of it. It has a lot to do with our crew members. I think, a lot of the 25 points that we got on NPS back, a lot had to do with this partnership. It was our crew members being very excited about it, being very supportive of it. It gave us definitely the most brand exposure we've ever gotten in our history, right?
Being side by side with major brands, like you can see there, but also doing a lot of social media, very heavy on social media, getting a lot of impressions, getting all over the world. I think I got some text messages from some of you when we flew the Brazil flag airplane over Copacabana that went around the world. A great brand exposure that we're very excited about, and we look forward to closing this cycle up in 2030 on the next World Cup, where I guarantee you we're getting the six star.
Yeah, as you said, I know many of you saw the baptism of our airplane, right? That's how serious we take it. I think we probably should have used holy water for the baptism. It would have probably helped the team. We have a couple more opportunities to do that. I'm going to hand it over to Abhi.
Thanks, John.
Do you want to give me the clicker? That'd be faster. Yeah.
Hey, everyone, good to see you. Talk a lot about the network, talk about the revenue. We'll talk about revenue recapture, obviously, one of the most important themes right now. It's not just about short-term revenue, right? Everything that we do every single day is about creating or extending our competitive advantages. That's all we should be doing, and I believe that's what we are focused on, right? It starts with the network.
It always has. Back in 2008, when David first went down with John, it was to build a different airline, right? We are designed to be different, and we've continued that through this point. Even as we've grown double, triple, we're still a very, very different airline, and we're actually proud of that. It starts with the fleet.
We have a very diversified fleet in Brazil, as you can see. Why do we have this? Because it allows us to access demand that nobody else can. It allows us to access demand at a cost that nobody else can access and bring that demand into our network. Every aircraft has a specific mission in terms of distance, in terms of utilization, in terms of the types of markets that it serves, very, very thoughtful construction of the network. Of course, you have your turboprops, shorter distances, very, very low trip cost. On the left side of this chart, you're playing the trip cost game, which is to bring in demand at the lowest possible cost per flight.
On the right side of this chart, you're playing the seat cost game, which is where you have a lot of demand in dense markets, you want the lowest cost per seat. That's the optimization that we do on a daily basis. Obviously, Azul started with the Embraers, the E2s, because we were entering markets that had never been served before, right? 118 seats, what type of demand? We don't really know. We went to the left a little bit with the ATRs, smaller markets, call it populations of 300,000, 400,000, 500,000. Never-been-served cities, bring that demand into our network. Once we saw the network growing, we needed to widen the pipes. 2015, the Airbuses, right?
The narrow bodies to widen the pipes, really bring a lot of connectivity into the network. At the same time, the wide bodies really focus on just a small handful of markets. Brazil, an extension, which is Portugal and Florida. Now we have Madrid as well, right? It's a very focused network, very thoughtful, and each airplane is doing its mission at the right place, in the right market, at the right time. The E2s going forward is the backbone of the airline. We will end this year with 46 E2s. Our new order book now is five to six airplanes a year, which we are very comfortable with that growth rate. A very efficient aircraft, right? A great product, two-by-two seating, no middle seat, Wi-Fi, seat back screens. Really, it's about the fuel efficiency.
With 18 more seats, call it 15% more capacity, you are burning less fuel, right? That is the key here. You have higher generation on the revenue side and much lower cost compared to the E1s, right? In addition, because of these economics, you can fly longer distances, you can fly higher utilizations. We are flying the E2s 11.5, 12 hours a day. Opens up some great markets like the south of Brazil, Curitiba, Porto Alegre, going up to our hub, Recife, nonstop. Very difficult to do on an A320, but very efficient on an E2. This is going to be our main growth engine until 2029, when we get A321s. This has been the backbone for a couple of years now and continues to be. This is something that happened recently on the wide-body fleet.
We have really looked at the cost of wide-body fleet, and it has come down significantly. In fact, we are right now, this year, transitioning the entire wide-body fleet. Some of it by circumstance, I would say, some of it by design, but we will take it, given the fact that fuel is up 80% in the second quarter and might be higher. We actually think that the timing was really good for this kind of change to happen. Our wide-body fleet is now going to be a very low risk, very resilient cost. We are coming down in terms of rent. We are coming down in terms of lease liability. Why is that happening? Because the lease terms are shorter. We have reduced the lease terms, less debt. We have cut capacity just a little bit. This year, it is going to be down more.
As we are transitioning the fleet, aircraft are leaving, other aircraft are coming in. The timing never matches up. Again, we are down in capacity right now. It is the right time, given where fuel is, allows us to really maintain the unit revenues, increase the unit revenues. Then we will recover towards the end of the year. Again, in a place like Brazil with currency exposure, fuel exposure, really want to have the most resilient cost on the fleet side as possible, and this is what we have with the wide body. We are very happy. As John mentioned, we are getting five aircraft that were previously used by American back in 2019 that are going to introduce the Azul Comfort, which is our economy premium cabin. Very excited about that aircraft. One is already flying.
Four more to come, in addition to one neo from Airbus as well. We will finish the year with 10 wide bodies, replacing the fleet completely, essentially, at a much, much lower cost. Very, very low risk international operation. With partners, one thing that people don't realize is that, yes, we do not have a major presence in São Paulo International or Rio International, but we're still very relevant to international partners. Through 11 code share, almost 30 interline partnerships, we're very relevant to guys like TAP, that fly to eight cities in Brazil. We have code share with Emirates. We have code share with Turkish. We have code share with United, obviously. American, we hope as well, after antitrust approval. Copa.
Really great partners coming in, using our network in São Paulo, but also in other cities like Belo Horizonte, like Salvador, like Recife, connecting to all over Brazil. Equally important is the partners that we have supporting our long-haul business. In Florida, obviously we have JetBlue. That takes the significant part of our traffic beyond Orlando and Fort Lauderdale. Fort Lauderdale, as you know, JetBlue has recently invested in very heavily, about 140 departures a day for them. Great connectivity all over the U.S. Orlando is just a massive airport and massive connectivity with lots of airlines, a great connectivity there as well. United connects with us also in Florida to their hubs. In Europe, we have TAP in Lisbon that takes us everywhere to Europe, and Air Europa code share in Madrid that takes us all over Europe as well.
We're very much covered for the long-haul business, and we're seeing a lot of opportunity in Brazil and Latin America as well in terms of these types of partnerships. We actually are relevant to foreign airlines coming into Brazil, and also for our long-haul customers that travel to the U.S. and to Europe. Our hubs. We've talked about this before, but really, really strengthening our hubs. Starts with Campinas. Very, very strong. We obviously have a massive market share in Campinas. But really, it's focused on our network. And one really interesting thing is that as we've come into this more disciplined growth strategy for the next five years, it's allowed us to be very much more selective in the demand that we take. These hubs take a decent amount of connecting traffic, as they're designed to do, but they're actually becoming more local over time.
What does that mean? Means that you're able to choose very carefully the type of demand that you take. All of these regions that we're talking about, Campinas, Belo Horizonte, Recife, are all growing. Partly thanks to us, partly thanks to the fact that Brazil is growing in these parts of the country. We have more O&D traffic, more generating traffic in these cities. That means higher yields, it's better for the operation, higher NPS scores. The more disciplined strategy means that these hubs, which are becoming more and more local, as we say, they're generating more demand on their own or receiving more demand, and that's just better for the business overall. Campinas is our south, southeast hub. Think about it as New York in the U.S. Really caters to the southern part of the country, São Paulo.
For domestic traffic, we actually don't count on São Paulo demand. In fact, we price differently from São Paulo. You can go to any OTA, you can go to Google Flights and just do a search, São Paulo to any city in Brazil, and you will see that this market has priced differently. I know Michael loves to look at pricing. I encourage you to do that. Go to Google Flights, do some searches, and you will see how we price differently here. The same as Newark. Someone that's living in New Jersey, Newark, west of Manhattan, where Newark is your captive airport, you're going to see a different price. It's very similar. We price domestically like there's no exchange of traffic between São Paulo and our catchment area, and that means a premium. Internationally, a little bit different because you have longer lengths of stays.
If you're on a 15-day trip, an extra hour, people will drive, and we actually want some of the international traffic as well. This is really a key to some of the average fare premiums that we have in Brazil. Belo Horizonte has grown significantly. Our mid-continent hub, think about it as Atlanta. Really great positioning for the north of Brazil, shorter flights, northeast of Brazil as well, and a lot of mining, energy, agro businesses around this region. Very high income, low profile. These customers really have taken to Azul. We've grown significantly in this market. Again, you can do some searches on Google Flights. Just look at the average stage length. One-hour flights, compare pricing and convenience to other cities, and you'll get an idea of what those premiums look like. We're very happy with Belo Horizonte.
We have Orlando now as well, five times a week. We hope to grow more international as well. Curaçao, Montevideo, Bariloche for the ski season right now in July. Recife is our northeast hub. Think about it as San Francisco. Really connects to all of the capitals in the northeast of Brazil. Recife, we think is the best demographics in the northeast in terms of corporate, a big center for technology, for automotive, generates traffic on business as well as leisure, and really allows us to connect to all of the northeast of Brazil as well as Manaus here, kind of going over the top. We fly to Orlando as well in the peak season, and we also fly to Madrid and Porto in Portugal as well. Each hub does a different mission.
Each one is designed to cater to its own set of markets, its own set of O&D traffic, its own set of local traffic. We have some overlap, but we try to minimize the overlap to make sure that each market, each hub, is doing the job that it's designed for. This is really important because post-restructuring, we made, as John mentioned, a really conscious decision on our growth rate going forward. We were 11% CAGR growth airline, probably even higher than that, pre-pandemic for sure. The decision that we made was we just want to build a lot of resiliency into the business. We know Brazil, we know Latin America, we know fuel challenges, we know currency challenges, let's just build in layers and layers of resiliency into the business.
We had the opportunity, unique opportunity, in the restructuring on the fleet side that you don't get, we took that chance, that opportunity, and we've now gone to a lower growth rate for the next five years, averaging 3.4%. 2026 was actually even lower than that. We'll talk about that when Antonio talk about fuel. This was all about really creating resiliency in the business going forward. We're very happy that we did that, especially given where fuel is. This is sort of a new philosophy going forward, and this growth rate allows us to be very selective in our demand. When you're growing 11, 14, 15% a year, you have no choice. You take any demand that comes your way. High quality, low quality, you just focus on volumes.
When you're growing 3%, in fact, this year was only 1%, you can be a lot more selective in the demand, and that's really what we're able to do. This is a huge change in how we're thinking about it. It's already in place. In fact, has been in place since July of last year. We've been operating under this network, it really gives us a lot of resiliency to handle any situation that gets thrown at us. The business units. John talked about how they've been growing. They are just a very significant part of our business. 23%, almost 25% of our unit revenues coming from the business units. Here we're talking about ancillaries. We're talking about the Loyalty. Chris is here, by the way. She runs Loyalty. She's awesome. Our cargo business, our vacations business, TecOps, Media, charters, we call Azul OnDemand.
All of this adds up to about 25% of our unit revenues. It's growing, it's got great margins, and as John said, allows us to monetize the business even when we're flying, even when we're not flying. The key really is, as this chart shows here, cross-selling customers amongst this universe. Starting with Loyalty, we just crossed our 21 million members. We're very happy about that. 1.2 million monthly active users. Very strong in terms of demand generation, in terms of Azul tickets. Pretty much endless demand for points redemptions, we manage that. The same team that does Azul revenue management does Loyalty revenue management as well, does Vacations revenue management as well. Make sure that we really are choosing the highest value for the seat, because these members have infinite demand for seats.
We're very happy with not just the seats availability on Azul, but how we've diversified how they use their points. Right? It used to be 90% of redemptions was on Azul, and now that number has come down significantly to other products and services. As you know, in Brazil, loyalty is an open game. The customer chooses who they want to transfer their points to. It really pays to have the best program out there with the best products, with the best services, so the customer chooses to send points your way. The growth in the members and the growth in the billings as well. Seven times, very large, and really driven by the credit card. We're very happy with the credit card. As John mentioned, we have over a million credit cards in Brazil.
The total spend on the credit cards, I know Delta likes to say this number, but we're at 0.5% of Brazil's GDP is spent on our credit card. Not on Azul, obviously, but in the entire system for the credit card. Another amazing stat is that more than 70% of the credit card base is infinity or platinum. High value. John talked about premium customers. A lot of the initiatives on the customer service side are driven by loyalty. Our top tiers get the Azul Concierge service. We have a tier called Unique that has 24/7 WhatsApp service. You want to change your flight, you want to change your seat, you want to check something. Those kinds of services are really bringing in more customers into the credit card and bringing more revenue into Azul as well.
This is just one of the entry points, but a very powerful entry point. Itaú, if you remember, this is a strategic partnership for them. They've mentioned us on their earnings call as well. We're very happy with this partnership, and it's only going to be accelerating from here. It's all about products and services. You really want to present the best possible program to the customer. That means more opportunities for earning and more opportunities for burning. The credit card is one, but we have a huge set of partners in banks, travel. Accor Hotels. Accor Hotels in Brazil is by far the largest hotel chain. I think they are larger than the next two or three or four combined in Brazil. They only have three partnerships in the world where you are able to interchange loyalty.
One is with Qantas in Australia, the other is with Qatar in the Middle East, and we're number three in the world. They've chosen us to have this very deep and strategic partnership where you actually have an interchange of loyalty points between Azul and Accor hotels. You have ancillaries. Our vacations business, I talked about cross-sell. The second largest channel for vacations is actually loyalty. You want to take a weekend trip, you got some points, you burn them on hotels. A lot of usage between the programs and the products as well.
By the way, Abhi, the loyalty program, if you see on average, we are very close to the U.S. airlines in regards to participation. It's above 10%, 11%-13% on average.
Thanks. This is kind of the different elite tiers that we have. Elite tiers are really critical in bringing in the high-value customers. We have an invite-only Azul One level. Unique, which is our earned, highest level status, where you get 24/7 customer support active, and also you get services at the airport, like the electric cars and boarding and stuff like that. Really, this is where we are pushing the revenue. The sort of the Jumanji to the right, with products and services to really attract them to Azul. We're seeing some really interesting numbers. In fact, the first quarter, we saw 12% growth in premium revenue, even though we cut capacity by 2.7%. It's a good start in how this premium revenue is accelerating. 2Q looks even higher than this, and we'll get to that on the 2Q earnings call.
This is really customers appreciating this experience, appreciating the status, and bringing revenue to Azul, as a result. We also have a very unique partnership redemption model. You're aware, loyalty programs can make agreements with other airlines where they have this thing called award availability, and then you can redeem your points. Azul, we have that with United, for example. You have award availability. We have with Emirates, for example. Then you can use your points. We actually have set up a very unique, I think it's the only one in the world that I've seen, where you can travel on any airline in the world. What I don't want to give away the secret sauce, but we basically buy the tickets in the public market, and then in real time, we convert them into points for customers to use.
You can actually travel any airline in the world using Azul points, right? That really opens up a huge opportunity for our loyalty customers as well. Again, when you provide this type of opportunities, then they're going to be sending points our way. Our cargo business just been renamed Logistics because it never was cargo, to be honest. It always was Logistics. Why do we say Logistics and not cargo? Because it's not the cargo that you normally think about. It's not big palletized cargo or containers that you just load up and then you unload at the next airport. This is truly Logistics where we do first mile, middle mile, and last mile, right? Amazon Marketplace, we are by far the largest air provider for Amazon in Brazil. Their marketplace Logistics is driven by us, right?
If you're selling a watch or a shoe, we'll go to the seller's apartment house, we'll pick it up, we'll take it to our warehouse, transport the middle mile, and then we'll have a network of our franchisees that do the last mile as well. This truly is Logistics, and we're very happy to be a very deep partner with Amazon. We have a network around the country, right? These are exclusive Azul Logistics locations. Not ours, they're exclusive partners, but they only deal with Azul Logistics. Think about them as mini warehouses. They can accept packages to ship into our network, but they also deliver for us. Each of these neighborhoods, each of these small towns have deliveries on bicycles, on motorbikes, on cars, on vans, whatever it is. Each one of these entrepreneurs just handles Azul Logistics traffic.
This gives us the network to deliver in two days anywhere in Brazil to anywhere in Brazil, right. That's using the air network as the backbone on the middle mile. As you can see here, first mile is a network of partners, middle mile is the air, and the last mile is deliveries as well. We do that there's incremental margin every step of the way, right. When we go to Amazon and we say, "We will take care of the marketplace." When we go to Samsung and we say, "We will do logistics for all of your brand stores," all of Samsung's brand stores in Brazil are fulfilled by us. When we go to Natura and we say, "We're going to do all your e-commerce," right. We mean that we will actually do the entire network from first mile to last mile.
Why is that good for us? Because each one of these steps, we add a little bit of margin, right. It's having three opportunities to add margin as opposed to just one. Our cargo fleet is growing. We just, about six months ago, retired the 737s late last year and put in two A321s. We're very happy with them, flying 11, 12 hours a day. That fleet's going to be growing. We also have some ATR quick change and some Caravans as well for the sub-regional operation. The freighters are doing really well. We're very happy with the reliability, with the performance, and as a result, we're going to be increasing the freighters from two to four by the end of this year and to six by the end of first quarter next year. Overall, we transport 26 million packages a year. Huge numbers in terms of value.
Every single new Samsung launch is fulfilled by us. All of their brand stores, fulfilled by us, right. A lot of high-value goods are being shipped in our network. Shopee is kind of our next big fish, as we like to say. As you know, Chinese e-commerce, very strong. Growing significantly in Brazil. Not a close second, but a very relevant second to Amazon in Brazil in our network and growing very quickly. Very happy with how that's going, and that's just going to give continued momentum going forward. Our vacations business, very meaningful. In fact, we are Brazil's second-largest travel agency after CVC. The real opportunity in the vacations business is how we use the network on weekends, right. Brazil's primarily a corporate market, so very low demand on Saturdays and Sundays, but high demand for leisure traffic.
On the weekends, we completely shift our network to serve just a plethora of nonstop beach destinations from cities that have never had this type of service. This allows the customer to put together a seven-day package, a four-day package where they can then come back on a connecting flight or some other dedicated flight. Our vacations business basically rents out the fleet on the weekends to provide this type of unmatched connectivity for customers anywhere that's not a beach, basically, right. That really is one more port of entry for customers into our universe, and then they can fly us on the network, get the credit card, sign up for the club, all those kinds of things. A really powerful tool to attract the leisure customers.
We are the largest seller of Disney in South America, the largest hub, Universal in South America, you've seen the airplanes. We have some photos here as well. We generate a lot of traffic inside of Brazil and to Orlando as well. We have a full range of products on the vacation side, cruises as well, rental cars, hotels, theme parks, all that kind of stuff. These are our five Mickey airplanes that we love, flying around Brazil. Every time you're flying them, the airport makes a special speech, which is fun. People take photos. Again, deep partnership with an amazing brand like Walt Disney World, right? Really, we have a really great ecosystem of brands that work with us and want to work with us, like Amazon, like Itaú, like Accor, like Walt Disney World. Fabio, Conecta.
I will say that after soccer and the World Cup, Disney is definitely the second passion of Brazilians. I will tell you that. I guarantee you if ask a Brazilian, have you ever been to Florida? They'll say yes. Have you ever been to the Amazon? They'll probably say no. It's actually interesting. It pisses John off a lot. He says that a lot, actually. Conecta is a business that I'm very passionate about. I truly believe in this business. It is we call this sub-regional operation because it's the smaller airplanes flying into the super tiny cities. What started as a way for us to reach further pockets of demand in places where infrastructure wouldn't allow for a jet or a larger aircraft, actually turned into a completely different business.
By doing these flights, of course, Conecta is also responsible for a lot of the incentives that Azul mainline gets. In fact, Conecta is responsible for about 30% of all the incentives that mainline gets overall, and by operating really cheap operating costs to have aircraft, right, like the Cessna Caravans. This business actually transformed itself over the past few years, and what we learned is that there are some really obscene margin contracts that we can get as a service provider with general aviation, and that's where Azul Conecta is kind of moving towards. Just to give you guys an idea, our ex-Azul revenue with Azul Conecta will actually be six times larger than 2023 by next year. Azul revenue will go from about representing about 95% of the revenue of the regional carrier to only about 70%.
It's really turning into an independent business, bringing a lot of incentives to mainline. I think the highlight of it is the new strategic customer that we just recently got, which is Petrobras. Everybody knows Petrobras, of course. They have a lot of oil exploring operations in the north of Brazil, in the Amazon, and we just got a contract to transport their people all around of the Amazon. This was not only a great contract because of margins, but also because it allowed us to bring a new type of aircraft into the Conecta family, which is a 19-seater ideal midterm between an ATR and a Cessna Caravan that we'll be able to use to this contract and others.
It also really showed the interaction between Azul and Azul Conecta, because when we got the contract for the Caravan operations, it also allowed us to get a contract for an ATR operation and continue to expand. We're really bringing more value to the entire Azul family. Azul TecOps, which is one of our newest business units as well. As John mentioned, largest hangar in Latin America is ours. It's kind of based in Campinas. Some of you guys here have already visited. It's really quite impressive. Fits exactly two wide bodies and eight narrow bodies at the same time, doors closed, which allows us to do a lot of maintenance. Which also started, of course, as an insourcing of maintenance. Doing maintenance outside of our ecosystems are expensive. Bringing it in saves us a lot of cost, as John mentioned as well earlier today.
Labor costs in Brazil are actually more competitive than other parts of the world. This actually attracts a lot of international customers as well for us to perform services too, maintenance services. This business actually has a very interesting contract. We actually maintained the two A330s that the Brazilian Air Force has. It's a long-term contract, and it's that kind of contract that we already have, and we're continuing to secure because it brings us constant streams of revenue, secured streams of revenue, as well. Here are some of the partners that our TecOps business has. I mentioned the Air Force, but also pretty big names. Vale, largest mining company in Brazil, and others as well. Our Azul Media business, and I think this one to me is really special because picture yourself going into an airplane. What are you looking at, right?
You're whether on your phone, you're whether on the back seat screen, or whether you're looking at the magazine, or you're paying attention to the flight attendants. We control 100% of what a customer can see or cannot see when they're boarded through the aircraft, right? That has a tremendous value to media partners, and that's really what Azul brings, and I think some of the pictures here are a tremendous example for an example, as you can see internally with the bins and everything. We control 100% of whoever's on board's time and what they're looking at or not. This has a tremendous revenue potential for strategic media partners, and we have a lot of them. We'll go through them a little bit. This also allows us to monetize the information that we have on our customer, right?
We know a lot about our customer, where he flies to, what are his priorities when he's flying or not. That starts giving us the ability to sell to particular partners that are looking for a particular type of customer population that they want to reach. We get personalized marketing as well through our media platform. We're surrounded by some
Pretty heavyweight brands. I think one of the big pushes that transformed Azul is looking for are really these important partnerships with important brands. You can see here that we're really doing a good job so far, and I think we'll continue to expand as well.
Yeah, Fabio. One thing that I'm spending a lot of time on, John's been challenging us a lot on, how do we grow and stay more efficient? How do we grow and produce higher quality work? Obviously we're leaning into AI very heavily. I'm spending half my time now just on this topic. I meet with every area at Azul every 15 days to see what the progress is. It's really interesting because there is a lot of noise about AI, about the promises and things like that, but we're just focused right now on, we say, to small victories. Just give us small victories, but in every part of the organization. We've deployed it across the organization, varying levels of success. We're certainly able to see already some really concrete gains. John challenged us about a month ago.
He said, "I want to know in every flight, five customers to apologize to because we messed something up the previous time, and five customers to delight. Every single flight. That's what I want to know." Now we have that. We have that using the data that we have and using AI on top of that to help us give intelligence on who are the customers that we need to take care of, and also to apologize. I'll give you another example. Tell me who is at risk of misconnecting in the next four hours. Not only that, tell me if that person has more than one million subscribers on Instagram, because there's a chance that they're going to be posting about it. We have that today.
I have that. I can give you a name right now of somebody who's at risk of misconnecting but also has a million members on Instagram. Our operation is now going to take care of them because of that. Those are some small victories that are already enabled. Our lawsuits. We've talked a lot about legal claims. We've seen roughly a doubling of our win rate on lawsuits. Part of it was helped with Fabio and the Supreme Federal Court and the initiatives that we did, but part of it is just having better defense. I'll give you an example. Let's say we delayed a flight. The delay didn't happen at that location. It was caused by weather two stations before. How do you connect that and make that into a convincing argument to win the lawsuit? Now we're actually doing that.
How do you identify repeat offenders, either with travelers or lawyers? What are the patterns in the lawsuits? Now you can actually do that with AI, and we are doing that, and we've seen a doubling of our win rate. CRM. How do you communicate effectively to acquire more credit cards? A lot of areas at Azul have changed forever. They'll never be the same again. Others are changing as well. We're really just focused on small victories across the board, but it is powerful. Our challenge is that we're a physical operation. We physically deliver to the customer a flight. How do we integrate this in a way that takes the digital to the physical and allows us to actually action it? Really interesting example.
Fabio, I just want to highlight something there. We have large corporate accounts like with Itaú, Vale, Petrobras. Our team was looking at this at a global level and saying, "Okay, this XYZ customer spent BRL 3 million with us last month, BRL 3 million this month. That's in line," then we were moving on. Then I started to say, "No, I want to know who is traveling on the corporate account. I want to know who, name by name, who's traveling on the corporate account." We found one of our customers on our Itaú account traveled with us 93 times in 2024 and only six times with us in 2025. I told my team, I said, "I hope he died," because I want to know why that individual stopped traveling with Azul.
The AI technology that we have today allows us, then a simple phone call to that individual. He was frustrated with an event that happened on Azul. Going to that level of detail is critically important to getting the customer. I think a lot of people think that AI is about having a machine talk to the customer. We believe it's about getting the customer even closer to us, having the ability to truly connect with that customer when Abhi talks about the delight for a customer, who do we want our flight attendants to write a letter to? Who do we want the airport manager to meet at the curb? It's using that data to do customer recovery and bringing us much closer to the customer.
Yeah. Antonio.
By the way, I'm going to talk later why I'm here, but before I go to my chapter here, we want to bring you a feeling about 2026 that probably you are all curious what's happened with the parabolic fuel price development and this and this and this. Here is our current focus and my focus here, and we are talking more or less every day about that. With this RASK maximization during this period here, we cut capacity in Q2. Again, to navigate during this crisis on the jet fuel. We just mentioned about AI, and we do see on both sides AI, we also see as an enabler to unlock resources to go to the RASK, create more revenue, and also to reduce the cost.
We want to do more with the same team you have, also very focused right now in this environment we are is just protect our cash. It's no more than that. If you go to the next one. You see here. By the way, it's already outdated, this curve here. I hope that Mr. Trump is able to say some nice words today that goes down again. Guys, the Q2 is going to be quite modest. You see this spike and is more or less double. We were talking today is double than a year ago. The worst seasonality in Brazil, Q2, is the lowest season in the aviation in Brazil, and we serve basically Brazil. We do have effect and that we do believe we are not going to recover in Q2, and we have a time lapse to recover in the future.
You could also mention something, Abhi, if you want. Again, we are revising that. We are also revisiting hedging strategy, but do hedge when? What is the real time and moment to hedge again? Now we have limits. We are discussing that, during the current volatility, this volatility is even worse than the hike on the fuel prices. That's more or less the situation we are living right now. That's why our Q2 is going to be modest. I don't have a higher expectation because reducing capacity, you see here. Assuming that we are in a transitional year, we are going to offer more ASKs in the future and rebuild our network for capture the full potential for Azul starting Q3 onwards.
Yeah. This is interesting. This was our plan for 2026, 1% capacity growth as part of our post-restructuring capacity profile. We've taken about five points of capacity out of the network. That takes us to a minus four and a half, if you will. A lot of it is going to be now 2Q and 3Q. You'll see 2Q down, high single digits, about 10%. 3Q a little bit less, then 4Q gets back to zero again. Really what we want to do is we want to get back to what we had in our exit plan by the second half of 2027. There will be growth again, 2027, 2026, sort of low to mid-single digits, probably mid-single digits. We've been, again, very, very proactive, very conservative on the capacity side.
We've taken out the capacity exactly when fuel price was at its peak. That really reduced the exposure, allowed us to accelerate the unit revenue, allowed us to protect unit revenue, take a lot of risk on unit revenue on the average fare side. We will get back to the plan late 2027 onwards. Again, very rational and very disciplined in terms of capacity. This chart is very interesting. I'll spend some time on this. This takes us back several years. This is every single quarter RASM. Total RASK. You can see a couple of. The big trend is the upward slope. If you look over the last six, seven years, this slope is a 7% unit revenue expansion per year. Okay. That's sort of the mean, if you will. Now, some sort of interesting effects here.
If you look in 2022, that was the Ukraine war. February 2022, you had a huge bump in expected, which was the RASK, the red, and what actually happened, which was the blue. That was the recapture that happened during the Ukraine war. A couple of effects, similar and different as well. A lot of urgency on the industry side, with fuel prices spiked as well. Fuel prices came back about 15 months later. You can see the revenue recapture. Also, you had 2022 post-Omicron. You had a very strong bounce in traffic post-Omicron as well, and the industry was smaller. The industry today is a lot larger than it was in 2022. You are able to see what happened. What are we looking now for this year? Red is what we had pre-war, if you will, and then green is what we are targeting for.
It's about a 10 to 12 unit revenue year-over-year increase every quarter. Okay. If we can do that, and 2Q, we're not talking about 2Q here, but we're going to do that. Again, I think this actually applies to the industry as overall. In Brazil, and probably in the U.S. as well, to be honest with you. Everybody needs about that unit revenue increase, 10%-12%. If you can do more, great, but you at least need that much. Now, obviously, fuel was up 80% in 2Q. It's not enough for 2Q. As the fuel curve is coming down, as Antonio showed, when fuel is up 30%-40%, that means CASM or CASK is up 10%-15%. That's when you start to get 100% fuel recapture.
At these unit revenue levels, up 10%-12%, by the end of the year, as fuel comes down, then you get to 100% fuel recapture. Why is that even more interesting? I don't believe that these pricing levels are going to change. We don't know what the fuel curve looks like in 2027, as it comes down, and we know that in 2027 with the fuel that's already come down, CASM will be lower in 2027 than 2026, right? We already know that based on how the curve has come down already. Pricing is not going to come down. These unit revenues are not going to come down. What you're actually, the market is being set up is higher unit revenues for longer as the fuel curve normalizes and CASM and CASK comes down.
That's going to lead to a more positive 2027 and beyond, right? You can see structurally, we get unit revenue increases as just part of inflation, as part of the actions that airlines do, as we have done here. This is Azul data. You get fuel recapture in the short term, but most interestingly is that as the pricing levels remain, and after every crisis, the pricing levels have remained. As the fuel curve normalizes, in 2027, you're going to have lower unit cost, lower CASMs and lower CASK, but you're going to be able to maintain the unit revenues, and that's going to lead to a stronger 2027.
Yes, it's tough right now with 2Q, with fuel up 80%. It's tough for everybody all over the world. You cannot get that back in one quarter, but what you're setting up for is the future recovery as the fuel curve normalizes and the pricing level remains. Antonio, over to you.
Before I start, I just want to highlight.
Antonio, microphone.
Just, it's a great pleasure to stand here and represent Azul for the first time. By the way, thanks for coming. I want first to highlight the reason why I decided to join Azul. By the way, next week, I'm going to complete three months. It looks like three years, but three months. By the way, I read in the speed of the airline, because I gave my garden leave, it was a very long one. I gave my badge on April 13th to Embraer, and I got a new one on April 14th. My garden leave was six hours sleep a night. It was a good one. If you listen, everything has been said here. Some motivations.
If you see the value proposition of this company here, from the investment thesis, if you want to copy this, if competition wants to do the same, they are going to spend the decades and billions of BRL to do the same. I would say from the investment thesis, you have uniqueness in the market we operate. That was first motivation for me. Second one, I was following Azul as a supplier. Now I like Airbus as well, but I continue to say E2 is a nice machine. I admire Azul since the start of Azul, not just for Embraer. Second point, for me to combine my own OEM experience with airline was a challenge, but also an opportunity for me as a career. I realized a lot of value as well.
Fits well for me as a professional, as a private person, and also as a challenge. I felt motivated, and thanks for convincing me to join here. I'm pretty happy to be here. For sure, it's not easy at all. That was the fourth motivation. As tougher it is, as more motivated I am to do this. I like challenge, that's why I'm sitting here. In regards to Azul and also other motivations, doing the restructuring was not a failure, it was a strategy. It's not a one-off. It's a continuous process that we are doing, and important things, we preserve the franchise, Azul. That's the most important thing in this process. Now with a true corporation, enhance and increase our fiduciary responsibility of our stakeholders. That's also important. I came from a true corporation with high standards of governance.
It was for me another motivation as well. That leads to, again, capital structure is to start to reshape, to reset the company, is a good one, but it continues to work. It's not a one-off. It's a continuous process for delevering the risk, the business. We are going to see probably less, a moderate growth, but highly focused on growing the bottom line, and also raw cash generation, real cash generation. That's our focus. Also how we deploy the capacity in the profitable way and with the strong partnership with American, United, and based on a governance model. I would say, it's a nice starting point of this process to reshape the company. Again, I'm not here for three years. I am here for the perpetuity of the business. That's the way I think. Okay? Focus on long-term value creation. That's our job here.
How we as a management team are committed to that, very simple. I like simple things. Maybe some of you are going to like this. That's our corporate targets for the next three years. Very simple. We need to reach net debt to EBITDA ratio below 1.5x by 2029. Which helps the CFO to put pressure on the team. Also we are, maybe it's going to make some of you happy even further. More or less 150% of the market cap we have today. Okay? There are two commitments we all have. Okay? We are committed to that, and I do believe we have enough. You saw the value proposition for this company here. We have, I would say all tools how to do it. Just two deliverables built here, not big promise, just deleveraging the risk and bringing valuation.
That's the one talks with each other. We also realize, and I like when you said, "We cannot work with airline business in Brazil with a higher leverage ratio." It's too risky because it's volatility every year. Having a company with 1.5x net debt to EBITDA ratio give us, provide us the flexibility we need to navigate under this environment. That's why it's important, and you are going to see more value creation by doing that than just hyper-growing the revenue side, then destroy the balance sheet again. That's not the name of the music right now. Priorities for Antonio right now, and I was talking with Antonio, quite busy right now, is improving credit profile. I'm going to show some example how can we do it. Thanks for that. Okay?
We do have a chance a lot to improve our credit profile on the street with active holders, with the bankers, with the debt holders in order to introduce myself also to try to help Azul. We do have a unique chance to reduce our cost of capital. I'm going to tell you this as well. Accelerate delivery and really bring a focus on generating cash. That's, I would say, our target, but my main focus right now. Okay? Just give some example. You saw this already. The initial balance sheet de-risked heavily on the loans, finance, and leasing liabilities at the net debt to EBITDA ratio at 2.4x without the money of America. If not, it would be 2.2.
Probably the end of this year is going to be a little bit higher because of the fuel impact, but I would say we do have enough sources of liquidity to navigate. I'll tell you in a moment. Some transformation, the balance sheet and some opportunities we have. Again, from the starting point, lowest leverage since IPO, optimize capital structure and balance sheet, 40% less raw interest in payments, positive structuring. This year is a transitional year. We still have some pre-Chapter 11 made payments to be performed during this year, but that's why we said that 2027 is the full Azul potential in a, I'll say, linear basis. Also, one important point, we reduced a lot our commitments with the OEMs, and we also discussed this. If you buy an aircraft today, you pay the progress payment, then you get the aircraft in four or five years.
Who knows in this room here how is going to be the Brazil in four or five years? Nobody knows this. What we are trying to do is to shorten the cycle, start to spend money for new aircraft very close where we start to generate revenue. That's sometimes not easy, but that's what we are trying to do right now. Again, continuous to use the positive bottom-line results to deleverage the company, and allowed us to be able to navigate and have autonomy about our decision if we have a nice deleveraging in the company. Again, the support from American United is very important for us, also on the governance side. I want to take one topic here is the Brazilian government provides some real, for the first time, and I've seen this, support to the airline sectors, not only Azul.
We are talking about around BRL 5 billion that we want to tap those credit lines in Q3. I would say quite confident we are very close to do it. Some of you guys are helping us as well. Okay? Just by doing that, I do believe we are able to reduce our capital cost in 200 basis points, just for the beginning. Okay? It's a real one that we are taking right now. Maybe you want to comment this, Fabio, as well.
Sure. Thanks, Antonio. Some of you guys have heard a lot about the government alphabet soup in Brazil, right? FINEP, FGE, ABGF, MDIC, and the whole shebang through our process. I think it's here, right? The government has fulfilled everything that we've asked them through our restructuring process when we talked about not only, it's not an immediate support, a momentary support. It's actually the Brazilian government has understood that it needs to support the airlines in the long term, and there were structural changes that will now allow airlines to have access to government-backed financing, whether it's through FGE, where you get the collateral, government collateral, so running Brazil risk, and available in local currency, so which helps us reduce our USD exposure. As well as FINEP, which is cash available from the fund through BNDES, to the airlines at a very, very attractive rate.
I think for first time, and I'm happy to be doing this with Antonio now, is we're already talking to the banks. We're already figuring this out, and we'll have very, very good announcements to be making here in the next upcoming few months. We're very excited about it. Not only that, I think one of the things that also shows And helps get the government a little pregnant as well is by the end of second quarter, they already provided a part of the loans that they're going to be doing for the airlines. They already provided BRL 300 million to Azul, and that will be repaid by the end of the year, which helps us get all the other airlines through the finish line as well, and which we're very much focused on. Thanks.
Thanks, Fabio. In a nutshell, we close with immediate liquidity around BRL 4.7 billion. It's going to be lower in Q2 because of the jet fuel price increase, but we have enough liquidity to navigate. Let's say Azul needs BRL 5 billion, for sure, we are going to make the best use of it. Just to give an example, today, 90% of our debts, they are denominated in U.S. dollar, have unique opportunity to swap to BRL. Okay? Reduce our FX exposure for the debts in Brazil. Also have a type of revolving credit facility, means liquidity should not be seen as an issue for Azul for the coming quarter, coming years. You have enough credit and perhaps you see some bankers here, they are supporting us in this project right now. That leads me to reducing the capital cost.
You see our rates here, B- for Fitch and S&P or B2 for Moody's. We want to take Fitch and S&P, our aspiration to be double B rating, which is going to provide us better rates in the future, reduce our leasing liabilities as well. That's more or less our plan to, again, de-risking, reduce the exposure in the U.S. dollar base. We have other ideas that we are developing right now, but they are the main focus right now, what we are doing. Important, we have access to credit. Again, we are just re-engage with the stakeholders, the bankers, and the financial community, and it's quite helped to see the support we are getting right now. Do you want to comment something? In regards to long-term value creation, that's another point.
You see here, we put here 2019 because at the time the company has a market cap of BRL 5 billion, 2019. You see the net revenue moving up and we should see based on what you said about the RASK, you should see the revenue going up and the RASK as well, which I would say not as a hyper-growth. It's going to be a moderated growth, but our business unit, they are growing faster than the total business, which is good news. Okay? By the way, the margin of the business, they are accretive to the consolidated margin. We do not show separate here. The same way we are doing the CASK, I do see opportunities to continue to lower down our costs, especially on the CASK.
You see here what we announce in Q1, 6% compared with one year ago for the CASK without fuel, 2%, and using AI as an enabler, I'd say we still have a chance to be more efficient, the cost position as well, going up with our RASK and have a nice spread between RASK and CASK in order to improve our margin. That's more or less where the value creation will come from. The EBITDA expansion, that's much faster, by the way, than the revenue side. Let's take one example here that for some of you to be relaxed here. Last 12 months, EBITDA was seven. Okay? Let's guess with the fuel price, maybe we are going to six.
That's more or less we need around about BRL 3 billion leasing liability, BRL 2 billion recurring CapEx for engine overhaul, and BRL 1 billion interest and debts payment is more or less our break-even. Means, guys, it's nothing to be concerned. Again, we still have measures to improve the situation. For sure, if you capture the full potential of this company, probably next year, probably are going to fulfill our target to deliver the comp 1.5 x. I would say it's a nice baseline. If you see BRL 6 billion in it, more or less break-even. Last 12 months, BRL 7 billion. Q1 is worth a type of proxy. What I tell you right now in regards to cash generation, okay? That give us confidence that we are able to generate 2029 more or less BRL 5 billion in order to reach our target.
That's more or less the number I have in my mind on the cash flow, sustainable cash flow or raw cash flow, okay? Without any, no recurring items and this and this and this. We brought this chart back just to show it, that is an indication. Q1 was the level that before the crisis. If you see here, we generate BRL 1.7 billion EBITDA, we paid our CapEx for engine overhaul especially. We do not have a bigger project with other types of CapEx. We paid the aircraft ownership. Assuming that we reduce capacity, in my calculation, BRL 3 billion plus BRL 2 billion plus BRL 1 billion. I didn't comment working capital. I keep working capital stable, zero. If you see what's happened in Q1, we have a bad guy in the net working capital because pre-sale was going down because we offer less ASKs.
Now we are moving to the different side of the equation here. Q2 is going to be probably break-even on the ATL, the Air Traffic Liability. Assuming that we are offering more ASKs in Q3 onwards, we are going to see also contribution for the working capital and the Air Traffic Liability for the pre-sales, okay? Just to give you a flavor.
The proxies show we are able to generate cash in this company here. That's everything we want to listen in order to reduce the leverage and create the value to the shareholders. Just summarize here, again, people asking me, "Antonio, how you want to generate value?" For me, it's really focus on profitable operation, really bottom line, net profit there. You saw we have a unique opportunity to expand the EBITDA faster than the revenue with our business unit. It's a nice fit. Discipline our cash flow, that's, I would say, my main priority in this company. Deleveraging the risk, the balance sheet, we believe if we put all together, is a nice opportunity to hit our second target is market cap and create value to those shareholders. I hope you could also enjoy this trip we are doing right now, it's not a one-off approach.
It's minimal three years trip here that we are seeing right now, and we know what you have to do. We know what to do, and my opinion as CFO, that's my last motivation why I joined Azul. We have the right ingredients to do this. That's our people. That's you looking here. The devoted crew members we have, that's amazing. That creates value a lot also for our shareholders. They are the drivers to make this transformation here. Thank you.
I think we'll open it up to Q&A before I make closing remarks. If there's any questions, start with Mike.
Hey, thanks everyone. Great presentation. Great to see everybody. Welcome back to N.Y. I guess I have two questions. First one, I really want to touch on aircraft ownership because I feel like that's been a hallmark or one of the successful tailwinds that we've seen with some of the more recent, or actually some of the recapitalizations and restructurings that we've seen. Many or some of your competitors have that benefit, That benefit does last at least for some through the end of the decade, maybe early into the next decade. Can you talk about the duration of those potential savings? I know, Abhi, when you were talking about the wide bodies, you talked about the leases and the debt coming down, because they were short term.
It does sound like that at some point there's going to be a re-up on your wide body fleet. I know it's small, it's 10 airplanes, Would like to know when that becomes a potential headwind. Tied to that, coming into this, you always had great economics on engines, and it feels like that in the industry right now, that is a real pain point, and I think as a company or companies that do not have their engine deals in place for some time, and I know the manufacturers aren't writing them anymore, but if you can just talk about where you are on the engine side. I realize it's a very multi-pronged question, It's going to be top of mind for investors. Thanks.
Mike, let me take those. I think our restructuring that we did and going to a low growth model allowed us to extract as much value as we could from the lessors. I think if we showed a hockey stick of growth, we would not be able to get the aircraft lease liabilities down, right? Because they know you want to grow, right? As you take a third of the aircraft rent out, we basically had to tell people we were willing to get smaller, right? All of that's been done on the narrow bodies and the wide bodies is permanent savings. There is no step ups in any of our lease deals currently. Zero. There are shorter duration in older wide bodies, but there's no step ups, right? I just want to make that very, very clear.
All of the lease liabilities that we did are all permanent savings. There are some aircraft that the lessors are paying for the engines, we're not paying for the aircraft until the aircraft is fully operational for us, right? We've kind of separated airframe with engines until they come back into the fleet. I just want to make it that that's a very important distinction. When you're talking about the wide bodies is we had a wide body transition, right? We went from pretty expensive NEOs and interestingly enough, we're getting two NEOs this year, 330 NEOs, and we're going to pay less rent than what we were offered to keep those NEOs that were six years old.
We're excited about the fact that these newer aircraft are coming in, have a lower ownership cost in them. Taking older wide bodies allows us to be more opportunistic. We don't need to fly these 20 hours a day, right? I'll let Abhi kind of talk to that, then I'll get back to the engine deals.
The ex-American airplanes, right, that have been parked since 2019, it's an eight-year lease, right? It's not like next year.
Oh.
It's not two years away, right? It's versus a NEO that was 12 years, right? It's less than half the rent. You're able to actually maintain the same capacity, just much lower risk. We have some time. It's not a cliff that's happening now.
Michael, just one comment that's important for the overall presentation here. If you take the Airbus you have and the Embraers, the average age of the fleet is seven years. That's also a strength we have. We don't have bigger needs to replace all the aircrafts. In finishing the topic on aircraft ownership, one of our local competitors did their Chapter 11 during COVID and had a lot of very cheap 319s, cheap wide bodies. That cycle is now ending, right? As they're taking 40 new aircraft this year to replace some of that stuff. They rode that wave for the last four or five years, and it generated a lot of cash kind of doing that. I think our moderated growth going forward allows us to ride this wave. Now, we didn't have a COVID wave, right?
From a narrow body perspective, getting to engines, right? I think we are the only airline in Latin America that has all of our engines under an engine deal. It's great to have Antonio come over, and he can't tell me, but he smiles when he looks at our engine deals compared to what he was seeing when Embraer's trying to place incremental aircraft. We always look at what's available in the market. There's 220s available, and you have to have an engine deal with Pratt, and so we compare our engine deals. I happen to be on the board of another airline, and so we get to see flow on engine deals overall, and we have very competitive engine deals on our LEAP-1As and on our GTFs, on our E2s, and the TCA with Pratt as well.
I think that that's really, really important as we go forward because that is the big risk in this industry.
That's true for the wide bodies as well. Rolls-Royce, we have an engine deal with two airplanes, and the price is the same, actually. Even the CEOs are going to just pay for the burn, and that's it.
Great. This is actually a quick second one, I don't mean to put Antonio on the hot seat, but you were at Embraer when Embraer did close the deal to sell the 190, 195s to LATAM, one of your competitors. I think there is a concern out there that with that airplane, that they may deploy it into markets where today Azul has this unique position. Anything that you either know about that? I know they've already announced some routes. Any potential concerns, maybe put that to rest. Thanks for taking my questions.
Yeah, let me start, then I'll go to Antonio. He signed something that he can't say too much.
Sorry.
I want to give him a minute to think through his thoughts.
We'll have drinks later.
Yeah, look, we made a bet on this aircraft a decade ago. What's happened since one of our competitors bought it is the liquidity in the space and the aircraft and the leases have actually gone down. It's a great thing. I often say you can fly on their E2 or our E2, but you'll have a TV on my E2, like I said earlier. Let's not kid ourselves, Mike. The E2 is a large narrow body. It's 136 seats. It's larger than an A319, I think they're operating 27 A319s today. We talked about what the ownership cost of those A319s is and where they've decided to deploy those aircraft initially is mainly into their hubs. It's Curitiba, it's Brasília. The E2 is not a regional airplane. The ATR is a regional airplane.
The Cessna Caravan is a sub-regional. The E2 is a large narrow body. 136 seats is a lot of capacity. Again, we've got the lowest unit cost. We're very confident in what we're doing. We think them taking the aircraft, it shows that we made the right decision previously. Again, they're swapping out a low-ownership aircraft for a more expensive ownership aircraft. We've seen them to be very rational competitors in the market, I intend for them to continue to be rational.
They could deploy the A319 today to our routes. It's not the case. They're going to connect who?
Yeah.
The answer is, it's more for replacement than anything else. That I can say this.
Hello, this is Jens from Morgan Stanley. I have two questions on capacity and the capacity reductions you have been making. First of all, there's a big divergence between you cutting capacities and your competitors are not. First of all, what's your view on that? Do you think it's being irresponsible to do it in that environment for your competitors? I know there's very little overlap between your network and theirs, but still interesting to see what your view is on that. Secondly, on how you have been decreasing capacity. Your fleet size has been relatively stable, so I guess it's mostly utilization of the existing aircraft. Does that mean that you could potentially increase capacity without increasing your fleet size if demand materializes or the fuel environment just improves?
Yeah, let me start, and then I'll let Abhi. I think the best-run airlines in the world, and I've said this, are cutting capacity. Take your Delta, United, American. You don't have a doubling of your fuel price and want to fly the same amount. I think that's idiotic to do that. I think as we look at situations like the second quarter, I was talking to a reporter yesterday, this is a time when you put your chest on the ground because there's bullets flying. You do not want to take risk in this environment because war's on, war's off, war's on, war's off. If you're deploying double-digit capacity growth, taking risk, that's just not our strategy. I think what we did through our Chapter 11 is we de-risked it. We've got no problem going left when other people are going right.
I think that we're very focused on Azul. We manage Azul the best way possible, and we manage Azul looking forward, not looking, what is Gol going to do, what's LATAM going to do to make our decisions? We were the first ones to proactively cut capacity. I think everybody thought this war would be over in three weeks, and here we are now three, four months into it. I think we made the right choice, and it's not fun to cut capacity. We have the ability to add that capacity back at the right time, and as Abhi said, I think we'll be much better positioned into 2027 for the decisions we took in 2026.
In terms of the growth profiles, we knew this. When Gol came out with their exit plan, it was a high-growth plan. This we knew back in June of 2025. We also know why. Because of the 2.5 billion BRL of interest expense. That's kind of the only way to pay off that interest expense is if you're going to try to grow a lot to generate a lot of EBITDA to pay off that interest expense. As Antonio said, we protected Azul. We took significant haircuts to make sure that we protected Azul to not have that exposure. We have the flexibility, I would say, to make the best decisions for the moment, which is what we did. Yes, on utilization, I think that's an opportunity.
Again, utilization, all airplanes are flying a Monday morning at 8:30 A.M. in the morning. Every airplane is flying. Every airplane is flying on Friday evening at 6:00 P.M. Where does utilization come from? At night and on weekends and middle of the day. A Saturday night flight when fuel has doubled, it doesn't work. It won't even pay for the fuel. It makes sense to cut utilization when fuel has gone up and it makes sense to put utilization back when fuel goes down, to your point. We have the opportunity to do that as this fuel curve comes down. I would say one is the growth strategy of the plan was just more resilient because of the plan itself. We don't need to grow. Two is taking utilization down makes sense and taking it up makes sense when fuel goes down.
I think that's also why we highlighted the ATL impact of Q1. When you cut your growth rate, inflows go down. You then have to pay for that fuel. In the same way as you then go pitch up again, when you grow again, then ATL becomes positive. It's a positive working capital. It's kind of moments in time and I think our competitor strategy is, geez, do they cut? Because then the inflows stop. We're playing the long game and we're doing what's best for Azul.
Yeah.
Hey, good morning, guys. Hey, guys. João Frizo from Goldman Sachs. Thanks for the presentation. On capacity itself, Abhi mentioned you guys are cutting capacity from 11% CAGR for the next five years to 3%. I want to hear about how flexible you guys are to ramp up this capacity. How would be the trigger for this and how you guys will balance it out between the leveraging to 1.5 x potential shareholder remuneration throughout these five years and profitable growth?
It's earning our right and really, the reason we took the order book down to five E2s a year is to give us opportunity to take advantage of the market. When you're taking 20 aircraft a year, you can't take advantage of any opportunities. Those are decisions that you made eight years ago. Now, if a lessor calls us up and says, "Hey, I have some aircraft at this unbeatable price," we can actually look at it. Previously, we would have not even space to look at it. Now at 5 E2s a year, someone says, "Hey, I got 2 A321s really well priced. Do you want to look at it?" Like, "Yeah, I want to look at it.
That sounds great. It really was to give ourselves the opportunity to take advantage of the market and not be stuck in a box just taking aircraft no matter what and then you're forced to put them in markets.
I also think it has a big impact on leverage. We talk about one of our competitors. When you start taking new metal and you take a significant amount of new metal, it's very difficult to get your leverage down because that new aircraft is going on your balance sheet and it's on a 12-year lease and that has a significant impact. Our targets are pretty clear. Get to below 1.5 and 3x on the market cap and so that's what we're focused on.
By doing that, we create the flexibility that I put in my slide there, the financial flexibility to tackle this type of opportunity that is showing up right now. What's happening with the airline is going to influence also the OEMs means we will have more aircraft available to be able to opportunistically join some opportunities as well.
Questions?
Hi, thank you so much. One comment that caught my attention was your confidence in the revenue per available seat mile staying high despite the fact that the fuel comes down. I am curious if you could give me a little bit more background in terms of what gives you that confidence. You mentioned historically, but I do not know if that is the case or what gives you the sense that competitors may not-
Sure
look to try to build more-
The impact has already been had. Us, the competitors, the industry has had a massive impact right now in 2Q, a little bit of 3Q as well. To recover that impact and to get back to higher margins and profitability, the pricing level has to stay. If you look at our margins, and John mentioned this in the opening, we have higher margins now than we did back in 2019, back in 2017. The pricing level, the unit revenue levels have continued to increase over time. The industry has to continue to be disciplined. We certainly are doing our part on the capacity side. We are growing much less than what we used to, which supports for the unit revenue expansion as well.
One of it is just recovery from the impact as fuel comes down, unit revenues stay up so we can recover the impact, have higher profitability and our lower growth as well.
Abhi, I just want to reiterate what you said. It's been a 7% RAS CAGR over the last, what, 10 years or so, right? I think that that was with Azul growing at a CAGR of about 8%-10% a year, right? Now taking that CAGR down, your ability to keep that unit revenue strong, that's the discipline, especially when you look at our markets, where we're strong and where we're focused, right? We're not jumping out of our comfort zone. We're focusing on Campinas, Recife, Confins, and we intend our competitors to do the same. They're going to focus where they're strong. We're going to focus where we're strong.
Questions?
Thanks, guys. I wanted to go back to Antonio's comment about potentially lowering the cost of capital by a couple of hundred basis points. It's no secret LATAM bonds trade in the sixes, given their leverage stats, et cetera. Are there things we can do tactically in the near term to help us with the cost of capital, with the government lines now being available? Is there an opportunity to borrow at Selic flat and buy back U.S. bonds at 11%? Obviously, that's a massively accretive-
Yeah.
Transaction from a currency adjusted basis.
Yeah.
Is that something that's in your arsenal? Thanks.
That's more or less where the 200 basis points come from, because if you combine the two lines, it's going to be 80% above the interest rates in Brazil means we could do the arbitrage. If I would swap the USD to BRL today, the exit bonds we have, I can save 200 basis points. That's more or less in place, and we are very close to tackle these lines.
Is that a swap or you could actually have?
No, it's really to repurchase those bonds because we do have in 2028, we have to do anyway, but we have an opportunity even to anticipate those type of things.
Antonio, just want to kind of comment, as you talk about LATAM, they exited with higher exit debt than us, higher leverage than we did, right? It's a great comp for us, but they're 4 years post, we're 4 months post, right? I think where we're at in terms of leverage, the fact that we have the ability to do this, I think is really exciting as we move forward, right? I think you saw how investors making money on that trade was fantastic. I think that's great for us, and I think there's a lot of similarities to what they've done that we're doing as well.
John, just adding, Antonio, these lines, as I mentioned, they're not something just for now, right? These are structural changes in the system of financing airlines in the country, just like any other industry that are going to be in place going forward, right? They'll be strategic for us at any time.
It's unique. We did the math for it. If you continuous with the dollar denominated bond here, if you swap, or if you take those lines where the 200 basis points come from. It's there. Let's say, for me, I was trying to support Azul when I was at Embraer to pressure the government to help the airlines. Now it's becoming real. It's great to see you.
Same here. Same here. Good seeing you. I had a quick question about your views of the VAT tax that's proposed in Brazil, how you see it impacting the company. What's your response to that to kind of mitigate that?
Fabio, that's why you're here, buddy. Just remember, there's press in the room.
Exactly. Will our great friends of the Brazilian press get out? Just kidding. It's been an interesting media debate on that. I think Brazil is revisiting its entire tax system. We're tackling VAT first, then we're going to be tackling income tax later. That's the overall government plan. One of our executives recently said that the tax reform is an opportunity, that created a lot of excitement in the media. It is an opportunity, right? Every change is an opportunity, there's still a lot of regulation to come out. The base of the reform is there's a lot of regulation to come out that impacts not only airlines, but many other industries as well.
It's hard for me to tell you exactly what's going to happen because a different regulation here and there can significantly change how VAT is going to impact airlines. We are seeing the tax reform as a positive.
I would just kind of say, look, Brazilians travel less than Colombians, less than Mexicans, less than Chileans. I think the government sees these are great high-paying jobs. Now you at least have two airlines buying Brazilian-made aircraft, right? This is a strategic sector to Brazil, tourism, right? I think one of the things that we see is that Jamaica has more international tourists than the country of Brazil, right? I think as we look at this whole World Cup, I saw this interesting fact that the searches for Cape Verde are up more than 5,000%, and some people are thinking about visiting Cape Verde. I actually lived there for nine months, a kind of a little-known fact about myself, we want people to visit Brazil, right?
I think it's time to get Brazilians that are in the U.S. to go back and visit Brazil, inviting others because Brazil can welcome a lot more tourists. I think as this tax reform is looked at, I think that needs to be taken into consideration, right? We want to make Brazil very competitive.
Talking about that, exactly. What opportunities are there to increase connectivity to the U.S. with United and American? I know my sense is that you would need to then also expand your network via Guarulhos, right? To achieve that. What opportunities are there, and is it really the focus right now, or is it not?
We already have a good set of partners, as I showed you. I would say the foreign airlines that want to go and grow in Guarulhos don't need us. They have Gol, LATAM. If they want to add any other city in Brazil, they need us for sure. Right? That's where we become very relevant. We already are relevant with United in Guarulhos and other partners. Once we get CADE approval with American, we expect to have a code share with them as well. Yes, we're open to partner with whoever around the world, but any other city, right? São Paulo is well-served. São Paulo always has been well-served. If you want to take tourism to any other part of the country, then you need Azul to connect you, right? That's where we become very relevant.
We look back a few years, American Airlines used to serve Confins directly. They used to serve Salvador directly. They used to serve Porto Alegre directly. They kind of concentrated it all now in Guarulhos. Who knows? As you look forward, maybe there's a possibility with our connectivity in some of those other places, also, the new technology that exists, XLRs, right? How are those XLRs going to be deployed into the northern part of Brazil and the northeast of Brazil? I think there's a lot of opportunities there. I think our brand is a brand as we've proven that people want to associate themselves with, right?
I think a high-value brand, for their customers, there's a lot of customers that fly United, every single day in the United States, and then we could take them anywhere in Brazil. We serve the main cities that they need to. We certainly can get them anywhere to Brazil through one connection.
Any other questions? No? I do have some questions from the online audience. Gabriel Rezende from Itaú is asking, Abhi, you mentioned expectations of lower fuel costs in the coming years, not translating into lower fares. If is that correct, can you talk a little more about that, considering healthier balance sheets overall in South America? Shouldn't we expect a slightly more aggressive approach from players in the region once fuel prices normalize?
Again, I think it's the same. A lot of damage has been done now with fuel prices doubling. Where the recovery's going to come is going to be to the right. As the fuel prices normalize and the unit revenues remain. If you look at the history, every time we've had this shock, 2022 Ukraine, post-Omicron, the pricing levels have remained. Unit revenues have gone up, unit revenues cannot go up without the pricing levels not remaining. We've shown the customer is willing to pay, can pay, I think that they're going to remain. Again, with our lower growth, that gives us one more opportunity to maintain and accelerate those pricing levels.
Yes, we do have our competitors growing, again, when somebody takes 40 aircraft a year and puts those aircraft on their balance sheet as debt, they have to generate the EBITDA to pay for that debt. Everybody's going to have to be disciplined.
Thank you. Talking more about network, Andre Ferreira from Bradesco is asking if long term is Azul's strategy to double the bet more and more on its unique network, or would Azul attempt to expand into more dense routes?
I think, if you look at since we went public in 2017, almost 10 years ago, we've doubled in size, as John showed, three times in revenue, we've actually gotten more dominant in our network. 70% of our capacity, we are alone. In the 20%, we're dominant. Only 10% I call super competitive. That number has actually gone down over the last nine years. We don't see any reason that we have to actually encroach or do anything different. We just focus on our markets where we are strong.
Great. The next question comes from Guilherme Mendes from JPMorgan. He is asking if there is any news about the capital injection from American Airlines.
Look, there's a process, right? We need to let antitrust run their process, we respect that, we're excited and confident that it should be approved.
Okay. I think that's all the questions I received from the audience online. Is there any other questions? No. John?
I just want to thank everybody. I think it's been a wild ride over the last couple of years. I just want to kind of finish with where I started. We have a great company with great crew members that are passionate the earnings and cash generation of this business has never been better. Just reiterating, we're twice the size in ASKs, three times the size in revenue, 3.8 x the size in EBITDA, right? A full turn of leverage lower, right? That's a great starting point for us. I think you could see what happened to some of our other competitors that have gone through this process that came out with a clean balance sheet, how quickly they rerated, how quickly their cost of capital went down. It's an exciting time for us.
It's an exciting time to have a new CFO that's partnering with me and he gets excited about, hey, let's get our cost of capital down further. A lot to do still. There's a bump in the road, which is the war in Iran, but it's part of the game, right? I think we prepared ourselves for this, so we're doing everything we can to protect the enterprise and move forward. I think we're pretty excited, I think just lastly, our incentives are 100% aligned, right? I think that's where we are. I think as you look at that, our compensation, our pay is totally aligned to those incentives that we showed you. So we're all on the same page, so we're really excited about what we plan to deliver over the coming years.
This is not a quarterly story. This is a multiyear growth and cash generation story, and that's what we're looking at as we move forward. I want to thank everybody for your time today. It's exciting. I want to thank the New York Stock Exchange for hosting us today. That means a lot to our crew members, that our social media is blowing up with the pride that our crew members have for what we've done, and we appreciate a lot of the support from our investors that are here in the room. For the sell side, get your shit together and start covering us.
Thank you.
Thank you, everyone