Azul raises tariffs by 20% and puts destinations on cut list if war lasts

Azul airline tickets are already 20% more expensive because of the war in the Middle East. The increase in ticket prices reflects the size of the cost shock hitting global commercial aviation.

Despite the increase, the company has, to date, preserved its route network and has not definitively eliminated any destination. But John Rodgerson, the airline's CEO, is on alert: if the war abroad drags on, cities will inevitably be on the cut list.

"Obviously, the price of fuel has doubled. This has an impact and we react. Increasing fares and cutting capacity is part of what we do on a daily basis," Rodgerson told CNN during the annual meeting of the International Air Transport Association, IATA.

The North American executive explains that the sector operates under two indomitable variables: the exchange rate of the dollar and the international price of a barrel of oil.

To sustain the new price level without collapsing demand, the immediate strategy has been to reduce frequencies and eliminate direct flights, forcing smaller routes to make connections at the company's hubs, such as Viracopos, Confins and Recife.

The drama is that aviation kerosene, which is already much more expensive in large cities, gains even higher prices in the interior. "In São Paulo and Rio, fuel is already expensive. Imagine these regional flights that we operate, it's even more expensive," he said.

Source: CNN