Recasts with CEO interview

By Gabriel Araujo

SAO PAULO, Feb 24 (Reuters) - Brazilian airline Azul AZUL.N expects to go "back to basics" and be able to focus more on its operations this year, Chief Executive John Rodgerson said, after a challenging 2024 marked by some market disruptions and a major debt restructuring.

"I am excited about 2025. It can't be worse than 2024," he told Reuters in an interview as the carrier reported on Monday fourth-quarter core earnings slightly above market expectations, with full-year figures matching its previously released outlook.

Azul in 2024 struggled with supply chain issues delaying aircraft deliveries, floods that kept the key Porto Alegre airport closed for months, a weaker Brazilian real, and balance sheet pressures leading to debt deals with lessors.

The carrier recently concluded the major restructuring that included the termination of almost $1.6 billion in debt from its balance sheet, while also raising $525 million in fresh money.

"We are well positioned as we have concluded all our renegotiation, so now we can focus a lot more on operations. I would say go back to basics and deliver the Azul product the market knows," Rodgerson said.

"We did not do our best last year because we had to survive. Now that we are alive, time to go back to what we used to be."

Azul expects to deliver earnings before interest, taxes, depreciation and amortization (EBITDA) of around 7.4 billion reais ($1.29 billion) this year, implying growth of around 22% when compared to 2024.

In the fourth quarter, core earnings reached 1.95 billion reais, up 33% year-on-year, helped by higher passenger traffic and load factor. Rodgerson highlighted unit revenue was roughly flat on a yearly basis despite increased capacity.

Net revenue rose 10.2% in the fourth quarter to 5.54 billion reais.

Analysts polled by LSEG expected EBITDA to come in at 1.91 billion reais, while revenue was forecast to hit 5.62 billion.

"Azul's problem was never its operations, but its balance sheet," the CEO said, noting that as part of its restructuring lessors agreed to a debt-for-equity swap. "Despite everything, we delivered what we promised the market."

Azul is now eyeing a potential business combination with rival Gol GOLL4.SA that would create a dominant carrier in Latin America's No. 1 economy, holding roughly 60% of the domestic market.

($1 = 5.7300 reais)

(Reporting by Gabriel Araujo, Editing by Louise Heavens, David Evans and Chizu Nomiyama)

((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))