Jetrader - Autumn 2016 - 40

J John Rodgerson is the chief financial officer of Azul Brazilian Airlines, where he oversees financial planning, analysis, treasury and accounting. He was part of Azul's original planning team with founder David Neeleman. Before coming to Azul, he worked for IBM Global Services and then became director of financial planning and analysis for JetBlue. He holds a Bachelor of Science degree in finance from Brigham Young University. He spoke to Jetrader about forecasts for the region, Azul's financial flexibility in a climate of economic turmoil and the growth of low-cost carriers in the region. Jetrader: The current FAA 20-year forecast predicted growth of 4.5 percent a year through 2034 in the Latin American market. What do you think about the accuracy of this number? Do you think that it will be higher, lower or around the same? John Rodgerson: First of all, we believe Latin America should grow significantly from where it is today. We are very bullish on Latin America even though Brazil's going through a tough spot right now. What troubles me with forecasts like this is it assumes that everything will stay the same for the next 20 years, and that's not how real life is in this business. As an airline, we typically look at our yearout forecast, two years-out forecast and a five-year forecast. Once you finish a five-year forecast, it's not worth the paper it's written on because the environment changes so quickly. So, I honestly don't have a view on that 20-year forecast for Latin America. But when you take a look at where Latin America is today and the number of travelers in the region, it is growing because incomes are rising in Latin America. People are starting to travel a lot more because it's accessible to many more people. It's been driven by the Azul business model. We fly to roughly 50 cities in Brazil that are our competitors don't even fly to, so we've opened up air service. If you look at what's happened in terms of passenger growth in Brazil in the last five years, it's significantly higher. It has been down over the last six months because there's a deep recession here right now. There are carriers in Latin America that are opening up the market. JT: How much of a challenge has the Brazilian recession been for Azul? JR: I came to Brazil eight years ago at the peak of Brazil's growth and we had a wild run. Our number one customer was always Petrobras, which is the largest state oil company in Brazil. So fuel prices went from $100 a barrel to $40 per barrel. We are very bullish on the long-term in Brazil and Latin America, but it's been a tough ride. We were buying our fuel when it was still on a dollar-based price. Everybody in the world saw this huge decrease in fuel 40 The official publication of the International Society of Transport Aircraft Trading prices, but I was buying my fuel currency in a hefty value of 100 percent, so that really impacted us. They're cleaning up corruption in Brazil for the first time. You're seeing big businesses with their CEOs in prison - that never happened in Latin America previously. I think it's good for long-term confidence in the country. There's obviously a change in the air. In order to level the playing field, business must be fair for everybody. And we are excited about what that means in the longterm. Nobody likes to suffer through this kind of the tough economic environment. JT: How have these issues affected the way that you've done business in Brazil and Latin America? JR: Because the macro situation changed so quickly, we've had to react very quickly. I'm very proud of how quickly Azul reacted to the negative macro environment. It was not a year ago that we raised $100 million from United Airlines, which took a 5 percent stake. We also raised $450  million from [China's] HNA Group. While everyone talks about the downside of our currency, the upside is we raised money with United and HNA. We've moved up lease returns and sold some aircraft outright. In the last six months, we've removed 25  aircraft from our fleet. If you talk to other airlines in the world, nobody has moved this many aircraft as quickly as we have.

Table of Contents for the Digital Edition of Jetrader - Autumn 2016

A Message from the President
Calendar/News
Q&A: Mike Williams, Jetaire Group
Wish Upon a Star
Sunshine, Rain and Mixed Feelings
ISTAT’s 2016 Farnborough Airshow Chalet and Reception Continue to Achieve Record Attendance
Legal Status of Aircraft Engines and Effects on Financing and Leasing Transactions
Survival of the Fittest
Weathering Economic Gusts: Copa Airlines’ Pedro Heilbron Advocates Flexibility and Smart Growth
5 Places to Visit While Attending the ISTAT Latin America Forum
From the ISTAT Photo Archives
From the Jetrader Editorial Archives
Aviation History
Aircraft Appraisals
ISTAT Foundation
Advertiser Index
Advertiser.com
Jetrader - Autumn 2016 - cover1
Jetrader - Autumn 2016 - cover2
Jetrader - Autumn 2016 - 3
Jetrader - Autumn 2016 - 4
Jetrader - Autumn 2016 - 5
Jetrader - Autumn 2016 - 6
Jetrader - Autumn 2016 - A Message from the President
Jetrader - Autumn 2016 - 8
Jetrader - Autumn 2016 - 9
Jetrader - Autumn 2016 - Calendar/News
Jetrader - Autumn 2016 - 11
Jetrader - Autumn 2016 - Q&A: Mike Williams, Jetaire Group
Jetrader - Autumn 2016 - 13
Jetrader - Autumn 2016 - 14
Jetrader - Autumn 2016 - 15
Jetrader - Autumn 2016 - Wish Upon a Star
Jetrader - Autumn 2016 - 17
Jetrader - Autumn 2016 - Sunshine, Rain and Mixed Feelings
Jetrader - Autumn 2016 - 19
Jetrader - Autumn 2016 - 20
Jetrader - Autumn 2016 - 21
Jetrader - Autumn 2016 - 22
Jetrader - Autumn 2016 - 23
Jetrader - Autumn 2016 - ISTAT’s 2016 Farnborough Airshow Chalet and Reception Continue to Achieve Record Attendance
Jetrader - Autumn 2016 - 25
Jetrader - Autumn 2016 - 26
Jetrader - Autumn 2016 - 27
Jetrader - Autumn 2016 - 28
Jetrader - Autumn 2016 - 29
Jetrader - Autumn 2016 - 30
Jetrader - Autumn 2016 - 31
Jetrader - Autumn 2016 - Legal Status of Aircraft Engines and Effects on Financing and Leasing Transactions
Jetrader - Autumn 2016 - 33
Jetrader - Autumn 2016 - 34
Jetrader - Autumn 2016 - 35
Jetrader - Autumn 2016 - 36
Jetrader - Autumn 2016 - 37
Jetrader - Autumn 2016 - Survival of the Fittest
Jetrader - Autumn 2016 - 39
Jetrader - Autumn 2016 - 40
Jetrader - Autumn 2016 - 41
Jetrader - Autumn 2016 - 42
Jetrader - Autumn 2016 - 43
Jetrader - Autumn 2016 - Weathering Economic Gusts: Copa Airlines’ Pedro Heilbron Advocates Flexibility and Smart Growth
Jetrader - Autumn 2016 - 45
Jetrader - Autumn 2016 - 5 Places to Visit While Attending the ISTAT Latin America Forum
Jetrader - Autumn 2016 - 47
Jetrader - Autumn 2016 - 48
Jetrader - Autumn 2016 - 49
Jetrader - Autumn 2016 - From the ISTAT Photo Archives
Jetrader - Autumn 2016 - 51
Jetrader - Autumn 2016 - 52
Jetrader - Autumn 2016 - 53
Jetrader - Autumn 2016 - From the Jetrader Editorial Archives
Jetrader - Autumn 2016 - 55
Jetrader - Autumn 2016 - 56
Jetrader - Autumn 2016 - 57
Jetrader - Autumn 2016 - Aviation History
Jetrader - Autumn 2016 - 59
Jetrader - Autumn 2016 - 60
Jetrader - Autumn 2016 - 61
Jetrader - Autumn 2016 - 62
Jetrader - Autumn 2016 - Aircraft Appraisals
Jetrader - Autumn 2016 - 64
Jetrader - Autumn 2016 - 65
Jetrader - Autumn 2016 - ISTAT Foundation
Jetrader - Autumn 2016 - 67
Jetrader - Autumn 2016 - 68
Jetrader - Autumn 2016 - Advertiser Index
Jetrader - Autumn 2016 - Advertiser.com
Jetrader - Autumn 2016 - cover3
Jetrader - Autumn 2016 - cover4
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