Equibles

6-K

AZUL SA (AZULQ)

6-K 2024-08-12 For: 2024-06-30
View Original
Added on April 04, 2026

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2024

Commission File Number: 001-38049

Azul S.A.

(Name of Registrant)

Edifício Jatobá, 8th floor, Castelo Branco Office Park

Avenida Marcos Penteado de Ulhôa Rodrigues, 939

Tamboré, Barueri, São Paulo, SP 06460-040, Brazil.

+55 (11) 4831 2880

(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x                       Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ¨                     No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ¨                     No x

Contents

Declaration of the officers on the interim condensed individual and consolidated financial statements 3
Declaration of the officers on the independent auditor’s report 4
Summary report of the statutory audit committee 5
Independent auditor report 6
Statements of financial position 8
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Statements of operations 10
Statements of comprehensive income 12
Statements of changes in equity 13
Statements of cash flows 14
Statements of value added 15
Notes to the interim condensed individual and consolidated financial statements 16 
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| **AZUL S.A.**<br><br>**Declaration of the officers**<br><br>June 30, 2024 |

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Declaration of the officers on the interim condensed individual and consolidated financial statements

In accordance with item VI of article 27 of CVM Resolution No. 80, of March 29, 2022, the Board of Directors declares that it reviewed, discussed and agreed with the interim condensed individual and consolidated financial statements for the three and six months ended June 30, 2024.

Barueri, August 10, 2024.

John Peter Rodgerson

CEO

Alexandre Wagner Malfitani

Vice President of Finance and Investor Relations

Antonio Flavio Torres Martins Costa

Technical Vice President

Abhi Manoj Shah

Vice President of Revenue

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| **AZUL S.A.**<br><br>**Declaration of the officers**<br><br>June 30, 2024 |

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Directors' statement on the independent auditor's report

In accordance with item V of article 27 of CVM Resolution No. 80, of March 29, 2022, the Board of Directors declares that it reviewed, discussed and agreed with the opinion expressed in the independent auditor's report of the interim condensed individual and consolidated financial statements relating to for the three and six months ended June 30, 2024.

Barueri, August 10, 2024.

John Peter Rodgerson

CEO

Alexandre Wagner Malfitani

Vice President of Finance and Investor Relations

Antonio Flavio Torres Martins Costa

Technical Vice President

Abhi Manoj Shah

Vice President of Revenue

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| **AZUL S.A.**<br><br>**Summary report of the statutory audit committee**<br><br>June 30, 2024 |

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Opinion of the statutory audit committee

In compliance with the legal provisions, the Statutory Audit Committee declares that it has reviewed, discussed and agreed to the reviewed the management report and the interim condensed individual and consolidated financial statements for the three and six months ended June 30, 2024 independent auditor's reports issued by Grant Thornton Auditores Independentes Ltda. recommending its approval to the Board of Directors.

Barueri, August 10, 2024.

Sergio Eraldo de Salles Pinto

Member, Coordinator of the Audit Committee and Financial Specialist

Gilberto Peralta

Member of the Audit Committee

Renata Faber Rocha Ribeiro

Member of the Audit Committee

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Independent auditor's report on review of interim financial information

GrantThornton Auditores Independentes<br><br> <br>Ltda.<br><br> <br>Avenida José<br> de Souza Campos - 507 - 5º<br><br> <br>andar<br><br> <br>Cambuí,<br> Campinas (SP) Brazil<br><br> <br>T +55 19 2042<br> 1036<br><br> <br>www.grantthornton.com.br

To the Shareholders, Board of Directors, and Management of

Azul S.A.

São Paulo – SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Azul S.A. (the Company), comprised in the Quarterly Information Form for the quarter ended July 30, 2024, comprising the balance sheet as of July 30, 2024, and the respective statements of income and of comprehensive income for the three and six-month periods then ended and of changes in shareholders’ equity and of cash flows for the period of six months then ended, including the footnotes.

Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with NBC TG 21 – Interim Financial Reporting and with the international standard IAS 34 – Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB), such as for the presentation of these information in accordance with the standards issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of interim financial information. Our responsibility is to express a conclusion on this interim financial information based on our review.

Review scope

We conducted our review in accordance with the Brazilian and International standards on reviews of interim information (NBC TR 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is significantly less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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Conclusion on the individual and consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the individual and consolidated interim financial information included in the quarterly information form referred to above has not been prepared, in all material respects, in accordance with NBC TG 21 and IAS 34 applicable to the preparation of interim financial information and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission.

Other matters

Statements of value added

The quarterly information referred to above includes the individual and consolidated statements of value added for the six months period ended July 30, 2024, prepared under the responsibility of the Company's management and presented as supplementary information for the purposes of IAS 34. These statements were submitted to the same review procedures in conjunction with the review of the Company's interim financial information to conclude they are reconciliated to the interim financial information and to the accounting records, as applicable, and whether the structure and content are in accordance with the criteria established in the NBC TG 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that the accompanying statements of value added were not prepared, in all material respects, in accordance with the criteria defined in that standard and consistently in relation to the individual and consolidated interim financial information taken as a whole.

Audit and review of valuescorresponding to the comparative year and period

The amounts corresponding to the year ended December 31, 2023, and the three- and six-month periods ending June 30, 2023, presented for comparison purposes were, respectively, audited and reviewed by another independent auditor, whose reports on the audit and reviews were, respectively, issued on April 12, 2024, and August 10, 2023, without modifications.

São Paulo, August 10, 2024

Grant Thornton Auditores Independentes Ltda.

CRC 2SP-025.583/O-1

Élica Daniela da Silva Martins

Accountant CRC 1SP-223.766/O-0

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| **AZUL S.A.**<br><br>**Statements of financial position**<br><br>June 30, 2024 and December 31, 2023<br>\(In thousands of Brazilian reais - R$\) |
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--- --- --- --- --- ---
Assets Note June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Current assets
Cash and cash equivalents 5 2,174 2,809 1,439,581 1,897,336
Short-term investments 6 - - 35,931 -
Accounts receivable 7 - - 1,033,976 1,109,408
Aircraft sublease 8 - - 8,330 14,592
Inventories 9 - - 1,000,425 799,208
Deposits 10 8,959 7,802 698,585 515,692
Taxes recoverable 11 106 4,984 218,354 219,433
Derivative financial instruments 23 - - 4,303 21,909
Related parties 29 741,309 216,388 - -
Advances to suppliers 12 - - 193,458 221,051
Other assets 7,158 2,079 321,560 245,518
Total current assets 759,706 234,062 4,954,503 5,044,147
Non-current assets
Long-term investments 6 - - 956,315 780,312
Aircraft sublease 8 - - 5,551 16,210
Deposits 10 - 70 2,200,391 1,777,803
Derivative financial instruments 23 - - 88 -
Related parties 29 1,836,107 1,578,332 - -
Other assets - - 530,869 143,781
Investments 14 759,785 760,782 - -
Property and equipment 15 - - 2,787,127 2,295,851
Right-of-use assets 16 - - 9,892,683 9,011,558
Intangible assets 17 - - 1,503,692 1,463,247
Total non-current assets 2,595,892 2,339,184 17,876,716 15,488,762
Total assets 3,355,598 2,573,246 22,831,219 20,532,909

The accompanying notes are an integral part of these interim condensed individual and consolidated financial statements.

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| **AZUL S.A.**<br><br>**Statements of financial position**<br><br>June 30, 2024 and December 31, 2023<br>\(In thousands of Brazilian reais - R$\) |
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--- --- --- --- --- ---
Liabilities and equity Note June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Current liabilities
Loans and financing 18 248,428 - 1,495,194 1,100,051
Reverse factoring 22 - - 45,493 290,847
Leases 19 712,974 216,388 4,494,473 3,687,392
Convertible debt instruments 20 28,994 25,807 28,994 25,807
Accounts payable 21 39,233 10,651 3,194,382 2,277,841
Airport taxes and fees 24 - - 757,492 588,404
Air traffic liability and loyalty program 25 - - 5,821,495 5,205,876
Salaries and benefits 26 2,450 2,344 533,168 474,797
Taxes payable 27 298 506 161,816 142,168
Derivative financial instruments 23 - - 35,499 68,905
Provisions 28 - - 624,708 736,430
Related parties 29 - 52,129 - -
Other liabilities - - 210,916 150,362
Total current liabilities 1,032,377 307,825 17,403,630 14,748,880
Non-current liabilities
Loans and financing 18 - - 11,098,565 8,598,861
Leases 19 1,659,882 1,443,351 13,391,358 11,459,019
Convertible debt instruments 20 971,997 1,175,803 971,997 1,175,803
Accounts payable 21 118,033 119,841 1,329,969 1,320,927
Airport taxes and fees 24 - - 913,129 1,171,679
Taxes payable 27 - - 89,446 112,287
Derivative financial instruments 23 - - 20 840
Deferred income tax and social contribution 13 - 39,526 - 39,526
Provisions 28 15 30 2,972,949 2,404,423
Related parties 29 744,894 683,763 - -
Provision for loss on investments 14 24,994,966 20,130,955 - -
Other liabilities - - 826,722 828,512
Total non-current liabilities 28,489,787 23,593,269 31,594,155 27,111,877
Equity 30
Issued capital 2,315,628 2,314,821 2,315,628 2,314,821
Advance for future capital increase - 789 - 789
Capital reserve 2,053,308 2,029,610 2,053,308 2,029,610
Treasury shares (11,568) (9,041) (11,568) (9,041)
Other comprehensive income 3,106 3,106 3,106 3,106
Accumulated losses (30,527,040) (25,667,133) (30,527,040) (25,667,133)
(26,166,566) (21,327,848) (26,166,566) (21,327,848)
Total liabilities and equity 3,355,598 2,573,246 22,831,219 20,532,909

The accompanying notes are an integral part of these interim condensed individual and consolidated financial statements.

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| **AZUL S.A.**<br><br>**Statements of operations**<br><br>Periods ended June 30, 2024 and 2023<br>\(In thousands of Brazilian reais – R$, except basic and diluted |
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--- --- --- --- --- ---
Three-month periods ended Six-month periods ended
Note June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Administrative expenses (11,028) (12,202) (29,313) (25,818)
Other income (expenses), net (29) 71,699 (132) 71,699
34 (11,057) 59,497 (29,445) 45,881
Equity 14 (3,803,883) 149,385 (4,888,775) (454,910)
Operating profit (loss) (3,814,940) 208,882 (4,918,220) (409,029)
Financial income 2,329 102 2,619 1,829
Financial expenses (79,006) (65,013) (143,195) (127,035)
Derivative financial instruments, net 205,598 (188,798) 357,171 (269,837)
Foreign currency exchange, net (156,340) 68,735 (197,808) 91,340
Financial result 35 (27,419) (184,974) 18,787 (303,703)
Profit (loss) before income IR and CSLL (3,842,359) 23,908 (4,899,433) (712,732)
Deferred income tax and social contribution 13 32,746 - 39,526 -
Net profit (loss) for the period (3,809,613) 23,908 (4,859,907) (712,732)
Basic earnings (loss) per common share – R$ 31 (0.15) - (0.19) (0.03)
Diluted earnings (loss) per common share – R$ 31 (0.15) - (0.19) (0.03)
Basic earnings (loss) per preferred share – R$ 31 (10.96) 0.07 (13.99) (2.05)
Diluted earnings (loss) per preferred share – R$ 31 (10.96) 0.07 (13.99) (2.05) 
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| **AZUL S.A.**<br><br>**Statements of operations**<br><br>Periods ended June 30, 2024 and 2023<br>\(In thousands of Brazilian reais – R$, except basic and diluted loss per share\) |
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--- --- --- --- --- ---
Three-month periods ended Six-month periods ended
Note June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Passenger revenue 3,859,064 3,939,865 8,216,104 8,108,165
Other revenues 313,681 314,330 635,053 624,358
Total revenue 33 4,172,745 4,254,195 8,851,157 8,732,523
Cost of services 34 (3,413,132) (3,588,001) (6,848,228) (7,482,825)
Gross profit 759,613 666,194 2,002,929 1,249,698
Selling expenses (200,724) (188,778) (415,099) (370,766)
Administrative expenses (147,245) (75,690) (274,310) (189,887)
Other income (expenses), net 29,537 (100,509) (71,603) (219,797)
34 (318,432) (364,977) (761,012) (780,450)
Operating profit 441,181 301,217 1,241,917 469,248
Financial income 50,994 50,983 95,918 104,449
Financial expenses (1,334,329) (1,198,099) (2,558,252) (2,455,683)
Derivative financial instruments, net 168,497 (235,616) 358,440 (510,588)
Foreign currency exchange, net (3,168,414) 1,105,423 (4,037,168) 1,679,842
Financial result 35 (4,283,252) (277,309) (6,141,062) (1,181,980)
Profit (loss) before income IR and CSLL (3,842,071) 23,908 (4,899,145) (712,732)
Current income tax and social contribution 13 (288) - (288) -
Deferred income tax and social contribution 13 32,746 - 39,526 -
Net profit (loss) for the period (3,809,613) 23,908 (4,859,907) (712,732)
Basic earnings (loss) per common share – R$ 31 (0.15) - (0.19) (0.03)
Diluted earnings (loss) per common share – R$ 31 (0.15) - (0.19) (0.03)
Basic earnings (loss) per preferred share – R$ 31 (10.96) 0.07 (13.99) (2.05)
Diluted earnings (loss) per preferred share – R$ 31 (10.96) 0.07 (13.99) (2.05)

The accompanying notes are an integral part of these interim condensed individual and consolidated financial statements.

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| **AZUL S.A.**<br><br>**Statements of comprehensive \(loss\) income**<br><br>Periods ended June 30, 2024 and 2023 |
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--- --- --- --- ---
Three-month periods ended Six-month periods ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Net profit (loss) for the period (3,809,613) 23,908 (4,859,907) (712,732)
Other comprehensive income - - - -
Total comprehensive income (3,809,613) 23,908 (4,859,907) (712,732)

The accompanying notes are an integral part of these interim condensed individual and consolidated financial statements

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| **AZUL S.A.**<br><br>**Statements of changes in equity**<br><br><br><br>Periods ended June 30, 2024 and 2023<br>\(In thousands of Brazilian reais – R$\) |
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--- --- --- --- --- --- --- --- ---
At December 31, 2023 2,314,821 789 (9,041) 2,029,610 3,106 (25,667,133) (21,327,848)
Net loss for the period - - - - - (4,859,907) (4,859,907)
Total comprehensive income - - - - - (4,859,907) (4,859,907)
Buyback and sale of shares 30 - - (2,527) (69) - - (2,596)
Share-based payment ^(b)^ 32 807 (789) - 23,767 - - 23,785
At June 30, 2024 2,315,628 - (11,568) 2,053,308 3,106 (30,527,040) (26,166,566)
Description Note Issued capital AFAC**^(a)^** Treasuryshares Capital reserve Other comprehensive income Accumulated losses Total
--- --- --- --- --- --- --- --- ---
At December 31, 2022 2,313,941 61 (10,204) 1,970,098 5,281 (23,286,677) (19,007,500)
Net loss for the period - - - - - (712,732) (712,732)
Total comprehensive income - - - - - (712,732) (712,732)
Share buyback 30 - - (2,881) - - - (2,881)
Share-based payment ^(b)^ 32 61 758 - 40,294 - - 41,113
At June 30, 2023 2,314,002 819 (13,085) 2,010,392 5,281 (23,999,409) (19,682,000)
(a) Advance for future capital increase
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(b) Refers to the receipt of the exercise<br>of share options and the vesting of share-based compensation plans (Stock option and RSU).
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The accompanying notes are an integral part of these interim condensed individual and consolidated financial statements.

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| **AZUL S.A.**<br><br>**Statements of cash flows**<br><br>Periods ended June 30, 2024 and 2023<br>\(In thousands of Brazilian reais – R$\) |
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--- --- --- --- --- ---
Six-month periods ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Cash flows from operating activities
Loss for<br> the period (4,859,907) (712,732) (4,859,907) (712,732)
Result reconciliation items
Depreciation<br> and amortization - - 1,225,914 1,194,819
Gain<br> (loss) from impairment of assets - - (14,274) -
Derivative<br> financial results, net (357,171) 269,837 (358,440) 510,588
Share-based<br> payment - - 22,244 42,604
Foreign<br> currency exchange, net 197,711 (91,088) 3,989,508 (1,679,991)
Financial<br> result 149,089 125,050 2,414,826 2,219,057
Movement<br> of provisions, net (15) 3,192 33,768 134,121
Recovery<br> of expenses and write-offs of other assets - - (481,690) 169,999
Result<br> from modification of lease - - (88,924) (50,002)
Result<br> in the write-off of fixed assets, right of use, intangible assets and inventories - - (38,999) 40,978
Deferred<br> income tax and social contribution (39,526) - (39,526) -
Sale and<br> leaseback - - (27,441) -
Others - - 38,809 -
Equity 4,888,775 454,910 - -
Reconciled result (21,044) 49,169 1,815,868 1,869,441
Changes in operating assets and liabilities
Accounts<br> receivable - - 248,018 522,793
Aircraft<br> sublease - - - 16,828
Inventories - - (161,432) 3,935
Deposits - 7 (230,541) (121,927)
Taxes recoverable 4,878 2,805 1,305 47,574
Derivative<br> financial results, net - - (15,439) (122,564)
Advances<br> to suppliers - - (840,355) (924,679)
Other assets (5,083) (8,833) (167,740) (121,859)
Accounts<br> payable 30 4,550 1,215,661 924,519
Airport<br> taxes and fees - - (19,895) 314,893
Air traffic<br> liability and loyalty program - - 497,690 294,587
Salaries<br> and benefits 106 (3,055) 96,413 31,374
Taxes payable (206) (160) (3,261) (1,136)
Provisions - - (200,105) (249,132)
Other liabilities - - 1,850 (2,967)
Total changes in operating assets and liabilities (275) (4,686) 422,169 612,239
Interest<br> paid (86,469) (52,591) (1,123,122) (845,257)
Net cash provided (used) by operating activities (107,788) (8,108) 1,114,915 1,636,423
Cash flows from investing activities
Short and<br> long-term investments
Acquisition of short and long-term investments - - (107,424) -
Cash received<br> in the sale and leaseback operation - - 10,322 -
Acquisition<br> of intangible assets - - (78,398) (92,525)
Acquisition<br> of property and equipment - - (450,594) (102,727)
Acquisition<br> of capitalized maintenance - - (222,736) (108,358)
Net cash used by investing activities - - (848,830) (303,610)
Cash flows from financing activities
Loans<br> and financing
Proceeds 250,000 - 2,279,918 902,252
Repayment - - (1,021,728) (565,030)
Reverse<br> factoring - - (402,814) (727,368)
Lease payment - - (1,533,554) (975,146)
Payment<br> of costs with proceeds (4,446) - (46,953) (15,493)
Related<br> parties (135,944) 5,007 - -
Advance<br> for future capital increase 18 819 18 819
Treasury<br> shares (2,596) (2,881) (2,596) (2,881)
Net cash provided (used) by financing activities 107,032 2,945 (727,709) (1,382,847)
Exchange<br> rate changes on cash and cash equivalents 121 (149) 3,869 (2,104)
Decrease in cash and cash equivalents (635) (5,312) (457,755) (52,138)
Cash and cash equivalents at the beginning of the period 2,809 8,117 1,897,336 668,348
Cash and cash equivalents at the end of the period 2,174 2,805 1,439,581 616,210

The accompanying notes are an integral part of these interim condensed individual and consolidated financial statements.

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| **AZUL S.A.**<br><br>**Statements of value added**<br><br>Periods ended June 30, 2024 and 2023<br>\(In thousands of Brazilian reais – R$\) |
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--- --- --- --- --- --- ---
Six-month periods ended
Note June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Gross sales revenue
Passenger<br> revenue 33 - - 8,217,591 8,120,213
Other<br> revenues 33 - - 700,673 707,732
Expected<br> loss with accounts receivable 7 - - 1,169 (2,648)
- - 8,919,433 8,825,297
Inputs acquired from third parties
Aircraft<br> fuel - - (2,726,854) (3,011,619)
Materials,<br> energy, third-party services and others (9,109) 61,445 (2,207,738) (2,882,154)
Insurances (2,642) - (44,378) (26,463)
34 (11,751) 61,445 (4,978,970) (5,920,236)
Gross value added (11,751) 61,445 3,940,463 2,905,061
Retentions 34
Depreciation<br> and amortization - - (1,225,914) (1,194,819)
Impairment<br> of assets - - 14,274 -
Net value added (11,751) 61,445 2,728,823 1,710,242
Value added received in transfers
Equity 14 (4,888,775) (454,910) - -
Financial<br> income 35 2,619 1,829 95,918 104,449
(4,886,156) (453,081) 95,918 104,449
Value added to be distributed (4,897,907) (391,636) 2,824,741 1,814,691
Distribution of value added:
Personnel ^(a)^
Salaries<br> and wages 14,599 9,337 885,037 765,625
Benefits 1,708 4,783 187,841 138,419
F.G.T.S. 276 286 78,516 68,493
34 16,583 14,406 1,151,394 972,537
Taxes, fees and contributions
Federal ^(b)^ (38,415) 1,158 144,682 166,261
State - - 24,957 24,836
Municipal - - 6,658 2,811
(38,415) 1,158 176,297 193,908
Third party capital
Financial<br> expenses 35 143,195 127,035 2,558,252 2,455,683
Derivative<br> financial instruments, net 35 (357,171) 269,837 (358,440) 510,588
Foreign<br> currency exchange, net 35 197,808 (91,340) 4,037,168 (1,679,842)
Rentals 34 - - 119,977 74,549
(16,168) 305,532 6,356,957 1,360,978
Own capital
Loss for the period (4,859,907) (712,732) (4,859,907) (712,732)
(a) Not including INSS in the amount<br>of R$1,022 in the parent company R$ 179,192 in the consolidated, as it is in the federal tax line.
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(b) Includes deferred income tax and<br>social contribution accounted for in the parent company.
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The accompanying notes are an integral part of these interim condensed individual and consolidated financial statements.

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 1. | OPERATIONS | | --- | --- |

Azul S.A. (“Azul”), together with its subsidiaries (“Company”) is a corporation governed by its bylaws, as per Law No. 6404/76 and by the corporate governance level 2 listing regulation of B3 S.A. – Brasil, Bolsa, Balcão (“B3”). The Azul was incorporated on January 3, 2008, and its core business comprises the operation of regular and non-regular airline passenger services, cargo or mail, passenger charter, provision of maintenance and hangarage services for aircraft, engines, parts and pieces, aircraft acquisition and lease, development of frequent-flyer programs, development of related activities and equity holding in other companies since the beginning of its operations on December 15, 2008.

The Azul carries out its activities through its subsidiaries, mainly Azul Linhas Aéreas Brasileiras S.A. (“ALAB”) and Azul Conecta Ltda. (“Conecta”), which hold authorization from government authorities to operate as airlines and ATS Viagens e Turismo Ltda (“Azul Viagens”) for travel packages.

The Azul shares are traded on B3 and on the New York Stock Exchange (“NYSE”) under tickers AZUL4 and AZUL, respectively.

The Azul is headquartered at Avenida Marcos Penteado de Ulhôa Rodrigues, 939, 8^th^ floor, in the city of Barueri, state of São Paulo, Brazil.

1.1 Organizationalstructure

The Company organizational structure as of June 30, 2024 is as follows:

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

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The table below lists the operational activities in which the Azul subsidiaries are engaged, as well as the changes in ownership that occurred in period, when applicable.

% equity interest
Company Type of investment Main activity State Country June 30, 2024 December 31, 2023
Azul IP Cayman Holdco Ltd. (Azul Cayman Holdco) Direct Holding of equity interests in other companies George Town Cayman Islands 24.8% 24.8%
Azul IP Cayman Ltd. (Azul Cayman) Indirect Intellectual property owner George Town Cayman Islands 100.0% 100.0%
IntelAzul S.A. (IntelAzul) Direct Frequent-flyer program São Paulo Brazil 100.0% 100.0%
Azul IP Cayman Holdco Ltd. (Azul Cayman Holdco) Indirect Holding of equity interests in other companies George Town Cayman Islands 25.0% 25.0%
Azul Linhas Aéreas Brasileiras S.A. (ALAB) Direct Airline operations São Paulo Brazil 100.0% 100.0%
Azul IP Cayman Holdco Ltd. (Azul Cayman Holdco) Indirect Holding of equity interests in other companies George Town Cayman Islands 25.0% 25.0%
Azul Conecta Ltda. (Conecta) Indirect Airline operations São Paulo Brazil 100.0% 100.0%
ATS Viagens e Turismo Ltda. (Azul Viagens) Indirect Travel packages São Paulo Brazil 99.9% 99.9%
ATSVP Viagens Portugal, Unipessoal LDA (Azul Viagens Portugal) Indirect Travel packages Lisbon Portugal 100.0% 100.0%
Azul IP Cayman Holdco Ltd. (Azul Cayman Holdco) Indirect Holding of equity interests in other companies George Town Cayman Islands 25.0% 25.0%
Cruzeiro Participações S.A (Cruzeiro) Indirect Holding of equity interests in other companies São Paulo Brazil 99.9% 99.9%
Azul Investments LLP (Azul Investments) Indirect Funding Delaware USA 100.0% 100.0%
Azul SOL LLC (Azul SOL) Indirect Aircraft financing Delaware USA 100.0% 100.0%
Azul Finance LLC (Azul Finance) Indirect Aircraft financing Delaware USA 100.0% 100.0%
Azul Finance 2 LLC (Azul Finance 2) Indirect Aircraft financing Delaware USA 100.0% 100.0%
Blue Sabiá LLC (Blue Sabiá) Indirect Aircraft financing Delaware USA 100.0% 100.0%
Canela Investments LLC (Canela) Indirect Aircraft financing Delaware USA 100.0% 100.0%
Canela Turbo Three LLC (Canela Turbo) Indirect Aircraft financing Delaware USA 100.0% 100.0%
Azul Saira LLC (Azul Saira) Indirect Aircraft financing Delaware USA 100.0% 100.0%
Azul Secured Finance LLP (Azul Secured) Indirect Funding Delaware USA 100.0% 100.0%
1.2 Seasonality

The Company’s operating revenues depend substantially on the general volume of passenger and cargo traffic, which is subject to seasonal changes. Our passenger revenues are generally higher during the summer and winter holidays, in January and July respectively, and in the last two weeks of December, which corresponds to the holiday season. Considering the distribution of fixed costs, this seasonality tends to cause variations in operating results between periods of the fiscal year.

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 2. | GOING CONCERN | | --- | --- | | 2.1 | ManagementStatement | | --- | --- |

In view of the above, management assessed and concluded that the Company is capable of continuing its operations and fulfilling its obligations in accordance with the contracted maturities. This assessment is based on the Company's business plan approved by the Board of Directors in December, 2023. The Company's business plans include planned future actions, macroeconomic and aviation sector assumptions, such as level of demand for air transport with corresponding increase in traffic and fares, estimated exchange rates and fuel prices. The Company's Management monitors and informs the Board of Directors about performance in relation to the approved plan.

Based on this conclusion, this interim condensed individual and consolidated financial statements were prepared based on the going concern principle operational.

Management confirms that all relevant information specific to interim condensed individual and consolidated financial statements is being disclosed, and corresponds to that used by it in the development of its business management activities.

2.2 Debt restructuring

Until June 30, 2024, Azul's Management continued the process of restructuring its debts, as presented in detail in these interim condensed individual and consolidated financial statements.

2.3 Extreme weatherevent

During the quarter ended June 30, 2024, there was an extreme weather event with heavy rains in the central region of the State of Rio Grande do Sul in Brazil, making it impossible to provide air services, due to flooding and the consequent closure of its main airport.

In order to face this challenging scenario, the Company began to monitor and establish operational and financial strategies to get through this period until the resumption of operations, increasing flights to nearby cities, in order to serve affected passengers.

The Company dedicated humanitarian efforts with the aim of supporting actions carried out by local authorities who acted in response to the emergency with the affected population.

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---

As of June 30, 2024, the Company's working capital and liquid equity position are as shown below:

Description June 30, 2024 December 31, 2023 Variation
Net working capital (12,449,127) (9,704,733) (2,744,394)
Equity (26,166,566) (21,327,848) (4,838,718)

The negative variation in the balance of net working capital, is mainly due to the increase in liabilities in foreign currency, due to the 14.8% devaluation of the real against the US dollar and the postponement of accounts payable.

The negative variation of equity is mainly, due to the Company's negative financial result, which exceeds by R$4,899,145 due to foreign currency exchange and interest on leases and loans and financing.

3.  BASIS OF PREPARATION AND PRESENTATION OF THE INTERIM CONDENSED INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS

The Company’s interim condensed individual and consolidated financial statements have been prepared in accordance with accounting practices adopted in Brazil and the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”), specifically IAS 34 – Interim Financial Reporting. The accounting practices adopted in Brazil include those included in the Brazilian corporation law and the technical pronouncements, guidelines and interpretations issued by the Accounting Pronouncements Committee (“CPC”), approved by the Federal Accounting Council (“CFC”) and the Brazilian Securities and Exchange Commission (“CVM”).

The Company’s interim condensed individual and consolidated financial statements have been prepared based on the real (“R$”) as a functional and presentation currency. All currencies shown are expressed in thousands unless otherwise noted.

The Company operates mainly through its aircraft and other assets that support flight operations, making up its cash generating unit (CGU) and its only reportable segment: air transport.

The preparation of the Company's interim condensed individual and consolidated financial statements requires Management to make judgments, use estimates and adopt assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. However, the uncertainty related to these judgments, assumptions and estimates can lead to results that require a significant adjustment to the carrying amount of assets, liabilities, income, and expenses in future years.

When preparing these interim condensed individual and consolidated financial statements of the Company, Management used the following disclosure criteria to understand the changes observed in the equity and in its performance, since the end of the last fiscal year ended December 31, 2023, disclosed on April 12, 2024: (i) regulatory requirements; (ii) relevance and specificity of the information on the operations; (iii) informational needs of users of the interim condensed individual and consolidated financial statements; and (iv) information from other entities participating in the passenger air transport market.

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

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As a consequence of the improvements made to the presentation of some items in the statements of cash flows and costs and expenses by nature, the following reclassifications were carried out to ensure comparability of balances from the previous period:

Parent company
June 30, 2023
Statements of Cash Flows As reported Reclassifications Reclassified
Changes in operating assets and liabilities
Prepaid expenses (8,833) 8,833 -
Other assets - (8,833) (8,833)
Total (8,833) - (8,833)
Consolidated
--- --- --- ---
June 30, 2023
Statements of Cash Flows As reported Reclassifications Reclassified
Changes in operating assets and liabilities
Prepaid expenses (118,423) 118,423 -
Other assets (3,436) (118,423) (121,859)
Insurance payable (54,169) 54,169 -
Accounts payable 978,688 (54,169) 924,519
Total 802,660 - 802,660
Consolidated
--- --- --- ---
June 30, 2023
Costs and expenses by nature As reported Reclassifications Reclassified
Cost of services
Rental - (74,549) (74,549)
Other (955,135) 74,549 (880,586)
(955,135) - (955,135)

The interim condensed individual and consolidated financial statements have been prepared based on the historical cost, except for the items significant:

Fair value:

·      Short-term investments –TAP Bond;

·      Derivative financial instruments; and

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

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·      Debenture conversion right.

Other:

·      Investments accounted for under the equity method.

3.1 Approval andauthorization for issue of the interim condensed individual and consolidated financial statements

The approval and authorization for issue of these interim condensed individual and consolidated financial statements occurred by the board of directors on August,10 2024.

4. MATERIAL ACCOUNTING POLICIES

The interim condensed individual and consolidated financial statements of the company was prepared based on the policies, practices and methods of calculating estimates adopted and presented in detail in the financial statements for the year ended December 31, 2023 and disclosed on April 12, 2024 and, therefore, must be read together.

4.1 New, changesand interpretations of relevant accounting standards and pronouncements

The following accounting standards came into effect on January 1, 2024 and did not significantly impact the Company's balance sheet or income statement.

Norm Charge
CPC 26 (R1) – equivalent to IAS 1 Classification of liabilities as current and non-current
CPC 06 (R2) – equivalent to IFRS 16 Lease liabilities in a sale and leaseback transaction
CPC 03 (R2) – equivalent to IAS 7 e CPC 40 - equivalent to IFRS 7 Reverse factoring
4.2 Foreign currencytransactions
--- ---

Foreign currency transactions are recorded at the exchange rate in effect at the date the transactions take place. Monetary assets and liabilities designated in foreign currency are determined based on the exchange rate in effect on the balance sheet date, and any difference resulting from currency conversion is recorded under the heading “Foreign currency exchange, net” in the statements of operation.

The exchange rates to Brazilian reais are as follows:

Final exchange rates
Description June 30, 2024 December 31, 2023 Variation %
U.S. dollar 5.5589 4.8413 14.8%
Euro 5.9547 5.3516 11.3%
Average exchange rates
--- --- --- --- --- --- ---
Three-month periods ended Six-month periods ended
Description June 30, 2024 June 30, 2023 Variation % June 30, 2024 June 30, 2023 Variation %
U.S. dollar 5.2129 4.9485 5.3% 5.0843 5.0744 0.2%
Euro 5.6132 5.3867 4.2% 5.4969 5.4831 0.3%
5. CASH AND CASH EQUIVALENTS
--- ---
Parent company Consolidated
--- --- --- --- --- ---
Description Weighted average rate p.a. June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Cash and bank deposits - 927 1,709 266,814 271,857
Cash equivalents:
Bank Deposit Certificate - CDB 100.2% do CDI - - 657,564 1,354,020
Repurchase agreements 97.8% do CDI 1,247 1,100 198,011 268,432
Time Deposit ^(a)^ 5.0% - - 42,497 2,985
Investments funds 11.6% - - 274,695 42
2,174 2,809 1,439,581 1,897,336

(a)  Investment in U.S. dollar.

6. SHORT AND LONG-TERM INVESTMENTS
Consolidated
--- --- --- --- ---
Description Weighted averagerate p.a. Maturity June 30, 2024 December 31, 2023
TAP Bond 7.5% Mar-26 884,454 780,312
Investments funds 16.9% Jun-26 107,792 -
992,246 780,312
Current 35,931 -
Non-current 956,315 780,312 
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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 7. | ACCOUNTS RECEIVABLE | | --- | --- | | | Consolidated | | | --- | --- | --- | | Description | June 30, 2024 | December 31, 2023 | | Local currency | | | | Credit card companies | 244,278 | 498,609 | | Cargo and travel agencies | 291,646 | 282,654 | | Travel package financing entities | 736 | 29,203 | | Loyalty program partners | 115,372 | 114,932 | | Others | 53,998 | 40,121 | | Total local currency | 706,030 | 965,519 | | Foreign currency | | | | Credit card companies | 16,672 | 18,556 | | Reimbursement receivable for maintenance reserves | 27,874 | 57,528 | | Airline partner companies | 5,633 | 8,612 | | Clearinghouse - agencies and cargo | 24,883 | 30,533 | | Others | 278,949 | 55,894 | | Total foreign currency | 354,011 | 171,123 | | Total | 1,060,041 | 1,136,642 | | Allowance for expected credit losses | (26,065) | (27,234) | | Total net | 1,033,976 | 1,109,408 |

The increase in “Other” accounts receivable in foreign currency mainly refers to contractual guarantees from aeronautical items.

In Brazil, credit card receivables are not exposed to credit risk of the cardholder. The balances can easily be converted into cash, when necessary, through advance payment with credit card companies.

During the six months ended June 30, 2024, the Company anticipated the receipt of R$5,783,793 in accounts receivable from credit card administrators, without right of return, with an average cost of 0.9% p.m. on the anticipated amount. On the same date, the balance of accounts receivable is net of R$3,226,034 due to such advances (R$3,349,391 on December 31, 2023).

The breakdown of accounts receivable by maturity, net of allowance for expected losses, is as follows:

Consolidated
Description June 30, 2024 December 31, 2023
Not past due 890,577 970,145
Over 1 to 90 days 106,466 122,040
Over 90 days 36,933 17,223
Total 1,033,976 1,109,408 
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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

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The movement of expected losses is presented below:

Consolidated
Description June 30, 2024 June 30, 2023
Balances at the beginning the period (27,234) (24,084)
Additions (15,094) (2,654)
Reversal 15,873 -
Write-off of uncollectible amounts 390 6
Balances at the end of the period (26,065) (26,732)
8. AIRCRAFT SUBLEASE
--- ---
Consolidated
--- --- ---
Description June 30, 2024 December 31, 2023
2024 4,419 15,386
2025 8,838 15,386
2026 2,132 4,001
Gross sublease 15,389 34,773
Accrued interest (1,508) (3,971)
Net sublease 13,881 30,802
Current 8,330 14,592
Non-current 5,551 16,210
9. INVENTORIES
--- ---
Consolidated
--- --- ---
Description June 30, 2024 December 31, 2023
Maintenance materials and parts 1,032,740 825,499
Flight attendance, uniforms and others 27,835 21,367
Provision for losses (60,150) (47,658)
Total net 1,000,425 799,208 
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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 10. | DEPOSITS | | --- | --- | | | Parent company | | Consolidated | | | --- | --- | --- | --- | --- | | Description | June 30, 2024 | December 31, 2023 | June 30, 2024 | December 31, 2023 | | Security deposits | 8,959 | 7,872 | 529,746 | 418,537 | | Maintenance reserves | - | - | 2,634,541 | 2,153,310 | | Total | 8,959 | 7,872 | 3,164,287 | 2,571,847 | | Provision for loss | - | - | (265,311) | (278,352) | | Total net | 8,959 | 7,872 | 2,898,976 | 2,293,495 | | Current | 8,959 | 7,802 | 698,585 | 515,692 | | Non-current | - | 70 | 2,200,391 | 1,777,803 |

The movement of security deposits and maintenance reserves is as follows:

Parent company Consolidated
Description Securitydeposits Security deposits Maintenance reserves Total
At December 31, 2023 7,872 418,537 1,874,958 2,293,495
Additions - 93,506 214,545 308,051
Returns (70) (34,852) (50,186) (85,038)
Provision movement - - 54,350 54,350
Use by the lessor - - (10,511) (10,511)
Foreign currency exchange 1,157 52,555 286,074 338,629
At June 30, 2024 8,959 529,746 2,369,230 2,898,976
At June 30, 2024
Current 8,959 63,373 635,212 698,585
Non-current - 466,373 1,734,018 2,200,391
At December 31, 2023
Current 7,802 64,788 450,904 515,692
Non-current 70 353,749 1,424,054 1,777,803

The movement of the allowance for maintenance reserves losses is as follows:

Consolidated
Description June 30, 2024 June 30, 2023
Balances at the beginning of the period (278,352) (446,342)
Additions (21,287) (86,046)
Reversals 68,566 57,415
Use by the lessor 7,071 64,624
Foreign currency exchange (41,309) 34,820
Balances at the end of the period (265,311) (375,529) 
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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 11. | TAXES RECOVERABLE | | --- | --- | | | Parent company | | Consolidated | | | --- | --- | --- | --- | --- | | Description | June 30, 2024 | December 31, 2023 | June 30, 2024 | December 31, 2023 | | PIS and COFINS | - | - | 63,003 | 73,029 | | IRPJ and CSLL | 27 | 4,917 | 385 | 8,315 | | ICMS | - | - | 17,832 | 19,940 | | Taxes withheld | 79 | 67 | 140,765 | 121,216 | | Provision for losses for taxes with held | - | - | (4,464) | (3,875) | | Others | - | - | 833 | 808 | | | 106 | 4,984 | 218,354 | 219,433 |

12. ADVANCE TO SUPPLIERS
Consolidated
--- --- ---
Description June 30, 2024 December 31, 2023
Local currency 87,920 118,442
Foreign currency 105,538 102,609
193,458 221,051

These amounts are presented net of provisions for losses in the amount of R$45,990 (R$28,676 as of December 31, 2023).

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 13. | INCOME TAX AND CONTRIBUTION | | --- | --- | | 13.1 | Breakdownof deferred taxes | | --- | --- | | | | Parent company | | | Consolidated | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Description | | December 31, 2023 | Profit or loss | June 30, 2024 | December 31, 2023 | Profit or loss | June 30, 2024 | | Deffered liabilities | | | | | | | | | | Breakage | - | - | - | (195,923) | (40,096) | (236,019) | | | Foreign currency exchange | (191,219) | (154,413) | (345,632) | (191,219) | (154,413) | (345,632) | | | Leases | - | - | - | (3,034,585) | (296,781) | (3,331,366) | | | Others | - | - | - | (1,057) | - | (1,057) | | | | (191,219) | (154,413) | (345,632) | (3,422,784) | (491,290) | (3,914,074) | | Deffered assets | | | | | | | | | | Impairment | - | - | - | 48,889 | (9,319) | 39,570 | | | Financial instruments | - | - | - | 21,112 | (9,885) | 11,227 | | | Foreign currency exchange | 149,986 | 200,705 | 350,691 | 149,986 | 200,705 | 350,691 | | | Temporary provisions | 1,707 | (205) | 1,502 | 1,403,989 | 168,076 | 1,572,065 | | | Leases | - | - | - | 4,199,370 | 627,171 | 4,826,541 | | | | 151,693 | 200,500 | 352,193 | 5,823,346 | 976,748 | 6,800,094 | | | Deffered assets reducer | - | (6,561) | (6,561) | (2,440,088) | (445,932) | (2,886,020) | | | | 151,693 | 193,939 | 345,632 | 3,383,258 | 530,816 | 3,914,074 | | Total income tax and deferred social contribution | | (39,526) | 39,526 | - | (39,526) | 39,526 | - | | 13.2 | Reconciliationof the effective income tax rate | | --- | --- | | | Parent company | | | | | --- | --- | --- | --- | --- | | | Three-month periods ended | | Six-month periods ended | | | Description | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | | Profit (loss) before income tax and social contribution | (3,842,359) | 23,908 | (4,899,433) | (712,732) | | Combined nominal tax rate | 34% | 34% | 34% | 34% | | Taxes calculated at nominal rates | 1,306,402 | (8,129) | 1,665,807 | 242,329 | | Adjustments to determine the effective rate | | | | | | Equity | (1,293,320) | 50,791 | (1,662,184) | (154,669) | | Unrecorded and recorded benefit no tax losses and temporary differences | (41,457) | 34,032 | (67,147) | 28,446 | | Mark to market of convertible instruments | 69,903 | (64,191) | 121,438 | (91,744) | | Permanent differences | (8,782) | (12,503) | (18,388) | (24,362) | | | 32,746 | - | 39,526 | - | | Deferred income tax and social contribution | 32,746 | - | 39,526 | - | | | Consolidated | | | | | --- | --- | --- | --- | --- | | | Three-month periods ended | | Six-month periods ended | | | Description | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | | Profit (loss) before income tax and social contribution | (3,842,071) | 23,908 | (4,899,145) | (712,732) | | Combined nominal tax rate | 34% | 34% | 34% | 34% | | Taxes calculated at nominal rates | 1,306,304 | (8,129) | 1,665,709 | 242,329 | | Adjustments to determine the effective rate | | | | | | Unrecorded and recorded benefit no tax losses and temporary differences | (1,339,576) | 90,226 | (1,758,128) | (159,522) | | Mark to market of convertible instruments | 69,903 | (64,191) | 121,438 | (91,744) | | Permanent differences | (9,770) | (16,727) | (19,690) | 436 | | Others | 5,597 | (1,179) | 29,909 | 8,501 | | | 32,458 | - | 39,238 | - | | Current income tax and social contribution | (288) | - | (288) | - | | Deferred income tax and social contribution | 32,746 | - | 39,526 | - | | | 32,458 | - | 39,238 | - |

The Company has tax losses that are available indefinitely for offset against 30% of future taxable profits on which deferred tax assets were not created as it is not probable that future taxable profits will be available for the Company to use the benefits thereof, as below:

Parent company Consolidated
Description June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Tax losses and negative bases 1,044,741 924,637 21,061,248 18,325,916
Tax loss (25%) 261,185 231,159 5,265,312 4,581,479
Negative social contribution base (9%) 94,027 83,217 1,895,512 1,649,332 
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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 14. | INVESTMENTS | | --- | --- | | 14.1 | Direct investments | | --- | --- | | | Company equity interest | | | | --- | --- | --- | --- | | Description | Paid-up capital | Voting capital | Equity | | December 31, 2023 | | | | | ALAB | 100.0% | 100.0% | (20,130,955) | | IntelAzul | 100.0% | 100.0% | (20,209) | | Goodwill – IntelAzul | 100.0% | 100.0% | 780,991 | | Azul Cayman Holdco ^(a)^ | 24.8% | 24.8% | - | | Total | | | (19,370,173) | | June 30, 2024 | | | | | ALAB | 100.0% | 100.0% | (24,994,966) | | IntelAzul | 100.0% | 100.0% | (21,206) | | Goodwill – IntelAzul | 100.0% | 100.0% | 780,991 | | Azul Cayman Holdco^(a)^ | 24.8% | 24.8% | - | | Total | | | (24,235,181) |

(a) Considering indirect investments, the Company's share totals 99.8%.

14.2 Movement ofthe investments
Description ALAB IntelAzul Total
--- --- --- ---
December 31, 2023 (20,130,955) 760,782 (19,370,173)
Equity (4,887,778) (997) (4,888,775)
Share-based payment 23,767 - 23,767
June 30, 2024 (24,994,966) 759,785 (24,235,181)
Investments 759,785
Provision for loss on investment (24,994,966) 
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| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 15. | PROPERTY AND EQUIPMENT | | --- | --- | | | Consolidated | | | | | | | --- | --- | --- | --- | --- | --- | --- | | Description | Weighted average rate (p.a.) | December 31, 2023 | Acquisitions | Write-offs | Transfers**^(b)^** | June 30, 2024 | | Cost | | | | | | | | Aircraft ^(a)^ | | 2,674,113 | 297,082 | (110,474) | (42,333) | 2,818,388 | | Improvements | | 555,412 | 23,868 | (5,400) | 55,780 | 629,660 | | Equipment and facilities | | 195,810 | 14,478 | (2,866) | - | 207,422 | | Others | | 29,231 | 12,334 | (3,229) | - | 38,336 | | Construction in progress | | 96,095 | 9,079 | (59,036) | (21,845) | 24,293 | | Advance payments for acquisition of aircraft | | 298,040 | 434,063 | - | - | 732,103 | | | | 3,848,701 | 790,904 | (181,005) | (8,398) | 4,450,202 | | Depreciation | | | | | | | | Aircraft ^(a)^ | 7% | (1,075,924) | (99,790) | 19,604 | - | (1,156,110) | | Improvements | 15% | (188,987) | (40,846) | 4,764 | - | (225,069) | | Equipment and facilities | 13% | (120,860) | (13,095) | 2,861 | - | (131,094) | | Others | 8% | (23,289) | (1,219) | 3,222 | - | (21,286) | | | | (1,409,060) | (154,950) | 30,451 | - | (1,533,559) | | Property and equipment | | 2,439,641 | 635,954 | (150,554) | (8,398) | 2,916,643 | | Impairment | | (143,790) | - | 14,274 | - | (129,516) | | Total property and equipment, net | | 2,295,851 | 635,954 | (136,280) | (8,398) | 2,787,127 |

(a)  Includes aircraft, engines, simulators and equipment flight.

(b)  The transfer balances are between the groups “Property and equipment” and “Right-of-use assets”.

During the six months ended June 30, 2024, the Company carried out “sale and leaseback” transactions for an engine, where the revenue, net of sales costs, corresponds to a gain of R$27,441 (there were no operations of this nature on June 30, 2023) and is recognized under the heading “Other costs of services provided”.

| 29 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 16. | RIGHT-OF-USE ASSETS | | --- | --- | | | Consolidated | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Description | Weighted average rate (p.a.) | December 31, 2023 | Acquisitions | Write-offs | Modifica-tions | Transfers**^(b)^** | June 30, 2024 | | Cost | | | | | | | | | Aircraft ^(a)^ | | 14,279,939 | 1,025,062 | (370,242) | 181,553 | 53,391 | 15,169,703 | | Maintenance of aircraft and engines | | 1,552,036 | 260,774 | (27,271) | (7,005) | - | 1,778,534 | | Restoration of aircraft and engines | | 1,699,610 | 285,575 | (20,406) | (86,624) | - | 1,878,155 | | Others | | 324,650 | 34,022 | (5,203) | 643 | - | 354,112 | | | | 17,856,235 | 1,605,433 | (423,122) | 88,567 | 53,391 | 19,180,504 | | Depreciation | | | | | | | | | Aircraft ^(a)^ | 8% | (7,417,554) | (582,160) | 370,242 | - | - | (7,629,472) | | Maintenance of aircraft and engines | 20% | (616,379) | (151,996) | 27,271 | - | - | (741,104) | | Restoration of aircraft and engines | 24% | (701,501) | (204,400) | 20,406 | 104,101 | - | (781,394) | | Others | 18% | (109,243) | (28,906) | 2,298 | - | - | (135,851) | | | | (8,844,677) | (967,462) | 420,217 | 104,101 | - | (9,287,821) | | Right-of-use assets, net | | 9,011,558 | 637,971 | (2,905) | 192,668 | 53,391 | 9,892,683 | | (a) | Includes aircraft, engines and<br>simulators. | | --- | --- | | (b) | The transfer balances are between<br>the groups “Aircraft sublease”, “Property and equipment”, “Right-of-use assets”, “Inventories”<br>and “Other assets”. | | --- | --- | | 17. | INTANGIBLE ASSETS | | --- | --- | | | Consolidated | | | | | | --- | --- | --- | --- | --- | --- | | Description | Weighted average rate (p.a.) | December 31, 2023 | Acquisitions | Write-offs | June 30, 2024 | | Cost | | | | | | | Goodwill | - | 901,417 | - | - | 901,417 | | Slots | - | 126,547 | - | - | 126,547 | | Software | - | 776,311 | 145,009 | (133,513) | 787,807 | | | | 1,804,275 | 145,009 | (133,513) | 1,815,771 | | Amortization | | | | | | | Software | 27% | (341,028) | (104,321) | 133,270 | (312,079) | | | | (341,028) | (104,321) | 133,270 | (312,079) | | Total intangible assets, net | | 1,463,247 | 40,688 | (243) | 1,503,692 |

| 30 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 18. | LOANS AND FINANCING | | --- | --- | | Parent company | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Description | Effective rate | Maturity | December 31, 2023 | Funding (–) costs | Payment of interest | Interest incurred | Amortized cost | June 30, 2024 | | In local currency - R | | | | | | | | | | Debentures | 20.7% | Sep-24 | - | 245,554 | (10,087) | 10,568 | 2,393 | 248,428 | | Total in R | | | - | 245,554 | (10,087) | 10,568 | 2,393 | 248,428 | | Current | | | - | | | | | 248,428 | | Non-current | | | - | | | | | - |

All values are in US Dollars.

| 31 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

Consolidated
Description Effective rate Maturity December 31, 2023 Funding (–) costs Payment of principal Payment of interest Interest incurred Foreign currency exchange Effects of restructuring Amortized cost June 30, 2024
In foreign currency – US
Senior notes – 2024 6.3% Oct-24 332,099 - - (10,331) 9,866 49,811 - 495 381,940
Senior notes – 2026 7.8% Jun-26 152,572 - - (6,172) 6,325 22,698 - 324 175,747
Senior notes – 2028 13.5% Aug-28 3,922,731 727,296 - (280,011) 292,455 689,184 - 17,068 5,368,723
Senior notes – 2029 11.5% May-29 1,165,545 - - (69,278) 70,338 171,702 - - 1,338,307
Senior notes – 2030 10.9% May-30 2,777,513 - - (156,204) 158,594 409,306 - - 3,189,209
Aircraft, engines and others 5.8% Mar-29 284,279 - (144,828) (7,058) 5,648 28,033 - 763 166,837
10.0% May-26 79,086 221,108 - (10,159) 12,260 33,423 - - 335,718
8,713,825 948,404 (144,828) (539,213) 555,486 1,404,157 - 18,650 10,956,481
In local currency - R
Working capital 18.6% Jan-25 27,491 982,796 (477,191) (9,811) 9,862 - - 4,353 537,500
Sep-25 2,157 - - - - - - - 2,157
Debentures 16.7% Dec-28 919,072 522,873 (387,676) (68,805) 60,357 - 18,173 10,674 1,074,668
Aircraft, engines and others 17.4% May-25 12,771 - (2,734) (2,203) 838 - - 18 8,690
6.4% Mar-27 23,596 - (9,299) (648) 614 - - - 14,263
985,087 1,505,669 (876,900) (81,467) 71,671 - 18,173 15,045 1,637,278
Total in R 9,698,912 2,454,073 (1,021,728) (620,680) 627,157 1,404,157 18,173 33,695 12,593,759
Current 1,100,051 1,495,194
Non-current 8,598,861 11,098,565

All values are in US Dollars.

| 32 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

18.1****Schedule of amortization of debt

Parent company
Description June 30, 2024
2024 248,428

There was no comparative balance as of December 31, 2023.

Consolidated
Description June 30, 2024 December 31, 2023
2024 772,395 1,100,051
2025 984,539 222,201
2026 754,332 355,930
2027 141,937 116,146
2028 5,455,082 3,998,142
After 2028 4,485,474 3,906,442
12,593,759 9,698,912
Current 1,495,194 1,100,051
Non-current 11,098,565 8,598,861
18.2 New funding
--- ---

18.2.1****Senior notes 2028

In February 2024, the subsidiary Azul Secured issued additional notes in the principal amount of R$740,585 (equivalent to US$148,700), with costs of R$13,289. These notes were issued to qualified institutional investors and there was no change in payment and interest conditions.

18.2.2****Aircraft and engines

In January and April 2024, the subsidiary Azul Finance funding R$77,175 and R$143,933, respectively, with interest of 4.6% p.a. plus the variation in the Secured Overnight Financing Rate (“SOFR”) and maturity in May 2026.

18.2.3****Working capital

In March 2024, the subsidiary ALAB funding R$450,000, with costs of R$1,802, with interest equivalent to CDI+1.5% p.a. and single payment of interest and principal in the second quarter of 2024. In April 2024, the debt was renegotiated, resulting in the postponement of the payment deadline to June 2024 with additional costs of R$2,354. In June 2024 the balance was paid off.

In June 2024, the subsidiary ALAB funding R$556,000, with costs of R$19,048, interest equivalent to CDI+1.6% p.a. and single payment of interest and principal in January 2025.

| 33 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

18.2.4****Debentures

In March 2024, the Board of Directors approved the issuance of simple debentures not convertible into shares, of the type with real guarantee, with additional personal guarantee, in a single series, in the total amount of R$250,000, with fundraising costs of R$4,446, with a nominal unit value of R$1, rate equivalent to CDI+6.0% p.a., payment of quarterly interest from June 2024 and maturity in March 2027. In June 2024, the expiration date was changed to September 2024.

In June 2024, the Board of Directors approved the issuance of simple debentures not convertible into shares, of the type with real guarantee, with additional personal guarantee, in a single series, from the subsidiary ALAB, in a total value of up to R$600,000. In June 2024, the subsidiary ALAB issued the amount of R$283,333, with costs of R$3,417, nominal unit value of R$1, rate equivalent to CDI+6.3% p.a., payment of monthly interest from July 2024, maturity in June 2026 and annual measurement of restrictive clauses (“covenants”).

18.3 Renegotiations

18.3.1****Debentures

During the second quarter, the subsidiary ALAB renegotiated the terms of the debentures, with a total value of R$700,000, with costs of R$2,597 in order to postpone the due date of the principal installments from 2024 to March 2025. There was no change in rates of interest.

In accordance with CPC 48 – Financial Instruments, equivalent to IFRS 9, the Company concluded that the renegotiation does not fall within the scope of debt extinguishment.

18.4 Covenants

In the quarter, the Company did not measure restrictive clauses (“covenants”) in its loan and financing contracts, therefore, the related debt continues to be classified in these interim condensed individual and consolidated financial statements in accordance with the contractual flow originally established.

| 34 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

19.   LEASES

In 2023, the Company defined the renegotiation conditions and began to sign definitive agreements with the lessors, who agreed to receive negotiable debt securities maturing in 2030 (“Notes”) and debt with the possibility of settlement in Azul preferred shares or cash, at the discretion of the Company (“Equity”) in order to reflect the Company's new cash generation, its better capital structure and the reduction in its credit risk. During the six months ended June 30, 2024, the Company renegotiated 17 lease contracts under these conditions.

Parent company Consolidated
Description June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Leases - - 14,309,033 12,455,827
Leases – Notes - - 1,203,942 1,030,845
Leases – Equity 2,372,856 1,659,739 2,372,856 1,659,739
2,372,856 1,659,739 17,885,831 15,146,411
Current liabilities 712,974 216,388 4,494,473 3,687,392
Non-current assets 1,659,882 1,443,351 13,391,358 11,459,019 
| 35 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---
Consolidated
--- --- --- --- --- --- --- --- --- --- --- ---
Description Average remaining term Weighted average rate December 31, 2023 Additions Modifications Payments Interest incurred Transfers**^(b)^** Write-offs Foreign currency exchange June 30, 2024
Lease without purchase option:
Aircraft ^(a)^ 7.5 15.9% 11,567,882 1,022,742 142,123 (1,658,934) 867,437 (287,035) (17,942) 1,687,801 13,324,074
Others 4.4 10.7% 237,254 34,022 643 (31,800) 11,410 - (4,117) 21,570 268,982
Lease with purchase option:
Aircraft^(a)^ 4.6 12.8% 650,691 - 27,794 (101,937) 45,848 - - 93,581 715,977
12,455,827 1,056,764 170,560 (1,792,671) 924,695 (287,035) (22,059) 1,802,952 14,309,033
Current 3,349,056 3,642,153
Non-current 9,106,771 10,666,880

(a)     Includes aircraft, engines and simulators.

(b)     Transfer balances are between the “Leases” classifications.

19.2 Leases –Notes
Consolidated
Description Average remaining term Weighted average rate December 31, 2023 Payments Interest incurred Foreign currency exchange June 30, 2024
Financing with lessors – Notes 6.0 14.8% 1,030,845 (53,931) 74,992 152,036 1,203,942
Total 1,030,845 (53,931) 74,992 152,036 1,203,942
Current 121,948 139,346
Non-current 908,897 1,064,596 
| 36 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

19.3 Leases –Equity
Parent Company and Consolidated
Description Average remaining term Weighted average rate December 31, 2023 Interest incurred Transfers**^(a)^** Foreign currency exchange June 30, 2024
Financing with lessors – Equity 3.1 14.4% 1,659,739 136,635 287,035 289,447 2,372,856
Total 1,659,739 136,635 287,035 289,447 2,372,856
Current 216,388 712,974
Non-current 1,443,351 1,659,882

(a)  Transfer balances are classified as “Leases”.

| 37 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---
Consolidated
--- --- ---
Description June 30, 2024 December 31, 2023
2024 2,152,833 3,570,147
2025 3,425,632 2,851,258
2026 3,161,752 2,615,718
2027 2,746,008 2,226,313
2028 2,476,896 1,987,968
After 2028 10,054,103 7,606,103
Minimum lease payments 24,017,224 20,857,507
Financial charges (9,708,191) (8,401,680)
Present value of minimum lease payments 14,309,033 12,455,827
Current 3,642,153 3,349,056
Non-current 10,666,880 9,106,771
19.5 Schedule of amortization ofleases – Notes
--- ---
Consolidated
--- --- ---
Description June 30, 2024 December 31, 2023
2024 89,461 130,432
2025 119,282 103,883
2026 119,282 103,883
2027 119,282 103,883
2028 119,282 103,883
After 2028 1,769,342 1,540,940
Minimum lease payments 2,335,931 2,086,904
Financial charges (1,131,989) (1,056,059)
Present value of minimum lease payments 1,203,942 1,030,845
Current 139,346 121,948
Non-current 1,064,596 908,897
19.6 Schedule of amortization ofleases – Equity
--- ---
Parent company and consolidated
--- --- ---
Description June 30, 2024 December 31, 2023
2024 270,863 235,897
2025 972,453 726,247
2026 972,453 726,247
2027 701,591 490,348
Minimum lease payments 2,917,360 2,178,739
Financial charges (544,504) (519,000)
Present value of minimum lease payments 2,372,856 1,659,739
Current 712,974 216,388
Non-current 1,659,882 1,443,351 
| 38 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---

In the quarter, the Company does not measure covenants in its lease contracts, therefore, the related debt continues to be classified in these interim condensed individual and consolidated financial statements in accordance with the contractual flow originally established.

20. CONVERTIBLE DEBT INSTRUMENTS
Parent Company and Consolidated
--- --- --- --- --- --- --- --- ---
Description Effective rate**^(a)^** Maturity December 31, 2023 Variation of conversion right Payment of interest Interest incurred Foreign currency exchange June 30, 2024
In foreign currency – US
Debentures 12.3% Oct-28 1,201,610 (357,171) (76,382) 128,033 104,901 1,000,991
Total in R 1,201,610 (357,171) (76,382) 128,033 104,901 1,000,991
Current 25,807 28,994
Non-current 1,175,803 971,997

All values are in US Dollars.

(a) Does not consider the conversion<br>right.

The balance includes the right to convert the debt into Company shares in the amount of R$131,604 (R$488,775 as of December 31, 2023).

20.1 Schedule of amortization
Parent Company and Consolidated
Description June 30, 2024 December 31, 2023
2024 28,994 25,807
2028 971,997 1,175,803
1,000,991 1,201,610
Current 28,994 25,807
Non-current 971,997 1,175,803 
| 39 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 21. | ACCOUNTS PAYABLE | | --- | --- | | | Parent company | | Consolidated | | | --- | --- | --- | --- | --- | | Description | June 30, 2024 | December 31, 2023 | June 30, 2024 | December 31, 2023 | | Accounts payable | 10,942 | 10,651 | 3,916,152 | 3,077,225 | | Accounts payable - Notes | - | - | 461,875 | 401,702 | | Accounts payable - Equity | 146,324 | 119,841 | 146,324 | 119,841 | | | 157,266 | 130,492 | 4,524,351 | 3,598,768 | | Current | 39,233 | 10,651 | 3,194,382 | 2,277,841 | | Non-current | 118,033 | 119,841 | 1,329,969 | 1,320,927 |

22.   REVERSE FACTORING

The Company promotes negotiations with suppliers with the aim of extending their payment terms. In this way, agreements were signed with financial institutions that allow their suppliers to advance the bonds, mainly fuel, with interest rates varying between 1.19% and 1.30% p.m.

Consolidated
Description December 31, 2023 Addition Payment Interest paid Interest incurred June 30, 2024
Reverse factoring 290,847 160,146 (402,814) (11,058) 8,372 45,493
290,847 160,146 (402,814) (11,058) 8,372 45,493
23. DERIVATIVE FINANCIAL INSTRUMENTS
--- ---
Consolidated
--- --- --- --- ---
Changes in fair value Forward - fuel Option fuel Conversion right debentures**^(a)^** Total
At December 31, 2023 (60,102) 12,266 (488,775) (536,611)
Gains (losses) recognized in result 10,104 (8,835) 357,171 358,440
Payments (receipts) 16,836 (1,397) - 15,439
At June 30, 2024 (33,162) 2,034 (131,604) (162,732)
Rights with current derivative financial instruments 2,269 2,034 - 4,303
Rights with non-current derivative financial instruments 88 - - 88
Obligations with current derivative financial instruments (35,499) - - (35,499)
Obligations with non-current derivative financial instruments (20) - - (20)
Non-current convertible instruments - - (131,604) (131,604)
(33,162) 2,034 (131,604) (162,732)
(a) Balance recorded in the parent<br>company.
--- --- 
| 40 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 24. | AIRPORT TAXES AND FEES | | --- | --- | | | Consolidated | | | --- | --- | --- | | Description | June 30, 2024 | December 31, 2023 | | Airport fees | 1,377,365 | 1,490,514 | | Boarding tax | 270,965 | 248,689 | | Other taxes | 22,291 | 20,880 | | | 1,670,621 | 1,760,083 | | Current | 757,492 | 588,404 | | Non-current | 913,129 | 1,171,679 | | 25. | AIR TRAFFIC LIABILITY AND LOYALTY PROGRAM | | --- | --- | | | Consolidated | | | --- | --- | --- | | Description | June 30, 2024 | December 31, 2023 | | Air traffic liability and loyalty program | 6,515,669 | 5,782,121 | | Breakage | (694,174) | (576,245) | | | 5,821,495 | 5,205,876 | | Average use term ^(a)^ | 65 days | 56 days |

(a)  Does not consider the loyalty program.

26. SALARIES AND BENEFITS
Parent company Consolidated
--- --- --- --- ---
Description June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Short-term benefits 2,450 2,344 532,954 473,060
Share-based payment - - 214 1,737
2,450 2,344 533,168 474,797 
| 41 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 27. | TAXES PAYABLE | | --- | --- | | | Parent company | | Consolidated | | | --- | --- | --- | --- | --- | | Description | June 30, 2024 | December 31, 2023 | June 30, 2024 | December 31, 2023 | | Government installment payment program federal | - | - | 166,977 | 157,970 | | PIS and COFINS | 44 | 2 | 335 | 4,231 | | Taxes withheld | 211 | 421 | 64,669 | 76,520 | | Import taxes | 43 | 83 | 16,251 | 13,483 | | Others | - | - | 3,030 | 2,251 | | | 298 | 506 | 251,262 | 254,455 | | Current | 298 | 506 | 161,816 | 142,168 | | Non-current | - | - | 89,446 | 112,287 | | 28. | PROVISIONS | | --- | --- |

28.1****Composition of provisions

Consolidated
Description Return of aircrafts and engines**^(a)^** Tax, civil, labor and risks**^(b)^** Post-employment benefit Total
At December 31, 2023 2,573,170 557,773 9,910 3,140,853
Moviments 218,767 (6,203) 77 212,641
Write-offs (45,975) (154,130) - (200,105)
Interest incurred 66,098 (26,445) 486 40,139
Foreign currency exchange 404,129 - - 404,129
At June 30, 2024 3,216,189 370,995 10,473 3,597,657
At June 30, 2024
Current 343,736 280,972 - 624,708
Non-current 2,872,453 90,023 10,473 2,972,949
At December 31, 2023
Current 497,525 238,905 - 736,430
Non-current 2,075,645 318,868 9,910 2,404,423

(a)     Nominal discount rate 10.7% p.a. (10.7% p.a. as of December 31, 2023).

(b)     Considers provision for civil risks in the amount of R$15 in the parent company.

| 42 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

28.1.1       Tax,civil and labor risks

The balances of the proceedings with estimates of probable and possible losses are shown below:

Consolidated
Probable loss Possible loss
Description June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Tax 241,402 284,638 443,176 432,109
Civil 63,549 131,464 100,214 49,930
Labor 66,044 141,671 156,134 68,789
370,995 557,773 699,524 550,828
28.1.1.1 Cível
--- ---

During the quarter ended June 30, 2024, the Company changed the risk of lawsuits involving flight delays and cancellations from probable to possible after a detailed analysis of recent court decisions.

28.1.1.2 Labor

During the quarter ended June 30, 2024, the Company changed the risk of a process involving crew hours on the ground, from probable to possible, taking into account the current stage of the process.

29. RELATED-PARTY TRANSACTIONS
29.1 Transactions between companies

Observing accounting standards, such transactions were duly eliminated for consolidation purposes:

Parent company
Creditor Debtor Type of operation June 30, 2024 December 31, 2023
Azul Investment Debt securities exchange offers – costs 9,718 8,464
Azul Secured Issuance of debt securities 2028 – costs 9,264 6,676
Azul ALAB Renegotiation of obligations with suppliers –  Equity 146,324 119,841
Azul ALAB Renegotiation of lease obligations –  Equity 2,372,856 1,659,739
Azul ALAB Loan 39,254 (86,659)
ALAB Azul Renegotiation of convertible debentures – costs - (496)
Secured Azul Renegotiation of convertible debentures – costs (11,119) (9,685)
Secured Azul Loan (733,775) (639,052)
1,832,522 1,058,828
Rights with related parties current 741,309 216,388
Rights with related parties non-current 1,836,107 1,578,332
Obligations with current related parties - (52,129)
Obligations with related parties non-current (744,894) (683,763) 
| 43 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- --- --- --- ---
Revenue Expense Type of operation June 30, 2024 June 30, 2023
ALAB Azul Loan - 5,007
- 5,007
29.2 Compensation of key managementpersonnel
--- ---

Key management personnel comprise the directors, officers and members of the Executive Committee and directors. Expenses incurred with remuneration and the respective charges, paid or payable, are shown below:

Consolidated
Three-month periods ended Six-month periods ended
Description June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Short-term benefits 8,413 7,962 19,853 15,722
Post-employment benefit 228 - 456 -
Share-based payment 11,000 18,781 21,922 37,768
19,641 26,743 42,231 53,490

Stock-based compensation plan, considers the Stock Options, RSU and phantom shares. Such plans are expected to be settled in up to eight years and, therefore, and does not represent a cash outflow.

29.3 Guarantees and pledges grantedby the Parent Company

The Company has granted guarantees on rental properties for some of its executives and the total amount involved is not significant.

29.4 Ticket sales contract

On March, 2018, the Company entered into a ticket sales contract with Caprioli Turismo Ltda., a travel agency owned by the Caprioli family (which holds an indirect stake in the Company through TRIP former shareholders), whereby Caprioli Turismo Ltda. is granted a R$20 credit line for the purchase and resale of tickets for flights operated by the Company. This credit line is guaranteed by a non-interest bearing promissory note in the same amount payable.

| 44 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---

The Company signed sublease agreements with Breeze Aviation Group (“Breeze”), an airline founded by the controlling shareholder of Azul, headquartered in the United States. The transaction was voted and approved by 97% of the Azul's shareholders at the Extraordinary General Meeting held on March 2020. Following good corporate practices, the controlling shareholder did not participate in the voting.

As of June 30, 2024, the operations with Breeze as recorded the following balances:

Consolidated
Creditor Debtor Type of operation NE June 30, 2024 December 31, 2023
ALAB Breeze Aircraft sublease Aircraft sublease 13,881 30,802
ALAB Breeze Reimbursement receivable for maintenance reserves Accounts receivable 5,349 3,901
Breeze ALAB Reimbursement receivable for maintenance reserves Other liabilities (23,401) (19,559)
Consolidated
--- --- --- --- --- ---
Revenues Expenses Type of operation NE June 30, 2024 June 30, 2023
ALAB Breeze Interest incurred Financial income 1,579 3,232
29.6 Lilium
--- ---

In August 2021, the Company announced plans to make a strategic partnership with Lilium GmbH, a wholly owned subsidiary of Lilium N.V. (“Lilium), which has ultimately become a related party as the Company’s Board of Directors’ Chairman was elected independent member of Lilium’s Board of Directors.

As of June 30, 2024, the Company has no outstanding balances with Lilium.

| 45 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---

In August 2022, the Company made agreements for purchase and sale of aircraft and engines with entities that are part of Azorra Aviation Holdings LLC. (“Azorra”), which has become a related party as the Company’s Board of Directors’ Chairman was elected independent member of Azorra’s Board of Directors.

The transactions between the Company and the Azorra group are shown below:

Consolidated
Creditor Debtor Type of operation NE June 30, 2024 December 31, 2023
ALAB Azorra Security deposits Deposits 25,810 4,643
Azorra ALAB Leases Leases (342,219) (302,947)
Azorra Azul Investments Leases - Notes Leases (87,066) (74,572)
Azorra Azul Leases - Equity Leases (126,140) (102,683)
Revenues Expenses Type of operation NE June 30, 2024 June 30, 2023
--- --- --- --- --- ---
Azorra ALAB Interest incurred Financial expense 24,091 8,120 
| 46 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

30. EQUITY
30.1 Issued capital
--- ---
Parent company and Consolidated
--- --- --- --- ---
Value Quantity
Description Company’s capital AFAC**^(a)^** Common shares Preferred shares
At December 31, 2023 2,314,821 789 928,965,058 335,747,796
Capital payment 807 (807) - -
Share-based payment - 18 - 3,000
At June 30, 2024 2,315,628 - 928,965,058 335,750,796

(a) Advance for future capital increase.

The Company's shareholding structure is presented below:

Parent company and Consolidated
June 30, 2024 December 31, 2023
Shareholder Common shares Preferred shares % economic participation Common shares Preferred shares % economic participation
-
David Neeleman 67.0% 2.2% 4.5% 67.0% 2.2% 4.5%
Acionistas Trip ^(a)^ 33.0% 3.1% 4.2% 33.0% 4.0% 5.0%
United Airlines Inc - 5.5% 5.4% - 8.0% 7.8%
Blackrock - 5.0% 4.8% - 5.0% 4.8%
Others - 84.0% 80.9% - 80.7% 77.8%
Treasury shares - 0.2% 0.2% - 0.1% 0.1%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
(a) This<br>refers to Trip Participações S.A., Trip Investimentos Ltda. and Rio Novo Locações Ltda.
--- --- 
| 47 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---
Parent company and Consolidated
--- --- --- ---
Description Number of shares Amount paid Average cost (in R$)
At December 31, 2023 499,999 9,041 18
Repurchase 210,000 2,596 12
Alienation (4,125) (69) -
At June 30, 2024 705,874 11,568 16

In May 2024, the buyback plan for 1,300,000 preferred shares was approved, maturing in 18 months, in order to keep them in treasury to later meet the obligations of the RSU plan.

31.   EARNINGS (LOSS) PER SHARE

Parent company and Consolidated
Three-month periods ended Six-month periods ended
Description June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Numerator
Net profit (loss) for the period (3,809,613) 23,908 (4,859,907) (712,732)
Denominator
Weighted average number of common shares 928,965,058 928,965,058 928,965,058 928,965,058
Weighted average number of preferred shares 335,124,985 335,648,075 335,062,078 335,635,741
Economic value of preferred shares 75 75 75 75
Weighted average number of equivalent preferred shares ^(a)^ 347,511,186 348,034,276 347,448,279 348,021,942
Weighted average number of equivalent common shares ^(b)^ 26,063,338,933 26,102,570,683 26,058,620,908 26,101,645,633
Weighted average number of presumed conversions 422,219,654 76,853,338 422,219,654 76,853,338
Weighted average number of shares that would have been <br><br>issued at average market price 152,780 4,776,446 950,420 2,668,627
Basic earnings (loss) per common share – R$ (0.15) - (0.19) (0.03)
Diluted earnings (loss) per common share – R$ (0.15) - (0.19) (0.03)
Basic earnings (loss) per preferred share – R$ (10.96) 0.07 (13.99) (2.05)
Diluted earnings (loss) per preferred share – R$ (10.96) 0.07 (13.99) (2.05)
(a) This refers to the participation<br>in the value of the Company's total equity, calculated as if all 928,965,058 common shares had been converted into 12,386,201 preferred<br>shares at the conversion ratio of 75 common shares for each preferred share.
--- ---
(b) This refers to the participation<br>in the value of the Company's total equity, calculated as if the weighted average of preferred shares had been converted into common shares<br>at the conversion ratio of 75 common shares for each one preferred share.
--- --- 
| 48 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

The diluted result per share is calculated by adjusting the weighted average number of shares in circulation, except those in treasury, for instruments potentially convertible into shares. However, due to the losses recorded in the six months ended June 30, 2024 and 2023, these instruments issued by the Company have a non-dilutive effect and, therefore, were not considered in the total number of shares in circulation to determine the diluted loss per share.

32.      SHARE-BASED PAYMENT

The conditions of the share-based grant plans remain unchanged during the six months ended June 30, 2024.

The movement of the plans is shown below:

Parent company and Consolidated
Number of shares
Description Stock option RSU Phantomshares Total
At December 31, 2023 20,521,684 1,544,065 246,930 22,312,679
Exercised (3,000) - (18,177) (21,177)
Canceled (52,368) (70,053) - (122,421)
At June 30, 2024 20,466,316 1,474,012 228,753 22,169,081
Parent Company and Consolidated
--- --- ---
Description June 30, 2024 December 31, 2023
Share price (in reais) 7.34 16.01
Weighted average price of the stock option (in reais) 5.97 12.93
Weighted average price of the phantom shares (in reais) 10.35 10.35
Cash inflow stock option 18 1,608
Flat cash inflow of phantom shares 188 237
Income tax regarding RSU transfer - 3,239

The expenses of share-based compensation plans are shown below:

Consolidated
Three-month periods ended Six-month periods ended
Description June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Stock option 9,996 17,800 20,365 35,601
RSU 1,529 2,223 3,402 4,693
Phantom shares (736) 1,988 (1,523) 2,310
10,789 22,011 22,244 42,604 
| 49 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---

32.1.1       Stockoption

Date of grant Option exercise price(in R$) Everage fair value of the option on the grant(in R$) Historical volatility Expected dividend Average risk-free rate of return Exercise rate per tranche Deadlineremainder ofvesting period(in years) Purchasing period up to (years) Total options granted Total outstanding options Total options available for exercise
December 11, 2009 3.42 1.93 47.7% 1.1% 8.8% 25.0% - 4.0 5,032,800 180,870 180,870
March 24, 2011 6.44 4.16 54.8% 1.1% 12.0% 25.0% - 4.0 1,572,000 84,000 84,000
April 5, 2011 6.44 4.16 54.8% 1.1% 12.0% 25.0% - 4.0 656,000 6,200 6,200
June 30, 2014 19.15 11.01 40.6% 1.1% 12.5% 25.0% - 4.0 2,169,122 708,993 708,993
July 1, 2015 14.51 10.82 40.6% 1.1% 15.7% 25.0% - 4.0 627,810 177,592 177,592
July 1, 2016 14.50 10.14 43.1% 1.1% 12.2% 25.0% - 4.0 820,250 280,124 280,124
July 6, 2017 22.57 12.82 43.4% 1.1% 10.3% 25.0% - 4.0 680,467 442,796 442,796
August 8, 2022 11.07 8.10 70.0% - 13.0% 25.0% 2.1 4.0 1,774,418 1,717,191 439,962
August 8, 2022 11.07 6.40 68.8% - 13.2% 33.3% 1.1 3.0 1,514,999 1,385,749 668,500
August 19, 2022 11.07 7.39 67.2% - 13.6% 100.0% - 1.0 4,900,000 4,824,333 4,824,333
August 19, 2022 11.07 11.54 74.6% - 12.7% 20.0% 3.1 5.0 8,900,000 8,900,000 -
July 7, 2023 15.60 10.80 75.4% - 10.5% 25.0% 3.0 4.0 1,800,000 1,758,468 -
30,447,866 20,466,316 7,813,370

32.1.2       Restrictedstock option

Date of grant Exercise rate per tranche Fair value of share(in R$) Remaining term of the vesting period(in years) Purchasing period up to (years) Totalgranted Total notexercised
June 19, 2020 25.0% 21.80 - 4.0 1,382,582 244,058
July 7, 2021 25.0% 42.67 1.0 4.0 300,000 112,889
July 7, 2022 25.0% 11.72 2.0 4.0 335,593 220,568
July 7, 2022 25.0% 11.72 2.0 4.0 671,186 421,083
July 7, 2023 25.0% 19.32 3.0 4.0 500,000 475,414
3,189,361 1,474,012

32.1.3       Phantomshares

Date of grant Option exercise price(in reais) Average fair value of option Historical volatility Expected dividend Average risk-free rate of return Exercise rate per tranche Remaining term of the vesting period(in years) Purchasing period up to (years) Total options granted Total outstanding Total options available for exercise
August 7, 2018 20.43 0.13 55.8% - 11.2% 25.0% - 4.0 707,400 53,520 53,520
April 30, 2020 10.35 1.02 55.8% - 11.2% 33.3% - 3.0 3,250,000 134,983 134,983
April 30, 2020 10.35 1.77 62.7% - 11.5% 25.0% - 4.0 1,600,000 38,820 38,820
August 17, 2021 33.99 0.57 64.3% - 11.7% 25.0% 1.1 4.0 580,000 1,430 1,430
6,137,400 228,753 228,753 
| 50 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

33.   SALES REVENUE

Consolidated
Three-month periods ended Six-month periods ended
Description June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Revenue
Passenger revenue 3,859,945 3,945,037 8,217,591 8,120,213
Other revenues 344,694 358,231 700,673 707,732
Total 4,204,639 4,303,268 8,918,264 8,827,945
Taxes levied
Passenger revenue  ^(a)^ (881) (5,172) (1,487) (12,048)
Other revenues (31,013) (43,901) (65,620) (83,374)
Total taxes (31,894) (49,073) (67,107) (95,422)
Total revenue 4,172,745 4,254,195 8,851,157 8,732,523
(a) As of January 1, 2023, the PIS<br>and COFINS rates on revenues arising from regular passenger air transport activities were reduced to zero, in accordance with Law 14,592/2023.
--- ---

Revenues by geographical location are as follows:

Consolidated
Three-month periods ended Six-month periods ended
Description June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Domestic revenue 3,420,602 3,305,766 7,233,915 6,810,712
Foreign revenue 752,143 948,429 1,617,242 1,921,811
Total revenue 4,172,745 4,254,195 8,851,157 8,732,523 
| 51 |

| --- |

| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

34.   COSTS AND EXPENSES BY NATURE

Parent company
Three-month periods ended Six-month periods ended
Description June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Administrative expenses
Salaries and benefits (3,912) (6,343) (17,605) (15,305)
Insurance (611) - (2,642) -
Others (6,505) (5,859) (9,066) (10,513)
(11,028) (12,202) (29,313) (25,818)
Other income (expenses), net
Others (29) 71,699 (132) 71,699
(29) 71,699 (132) 71,699
Total (11,057) 59,497 (29,445) 45,881
Consolidated
--- --- --- --- ---
Three-month periods ended Six-month periods ended
Description June 30, 2024 June 30, 2024 June 30, 2024 June 30, 2024
Cost of services
Aircraft fuel (1,373,576) (1,338,217) (2,726,854) (3,011,619)
Salaries and benefits (589,840) (524,383) (1,220,805) (1,021,541)
Airport taxes and fees (239,604) (249,392) (481,843) (511,753)
Traffic and customer servicing (207,190) (189,490) (414,734) (385,086)
Maintenance (170,720) (223,276) (368,394) (381,172)
Depreciation and amortization ^(a)^ (608,355) (624,678) (1,219,886) (1,190,056)
Impairment 6,978 - 14,274 -
Insurance (24,518) (7,065) (41,736) (26,463)
Rents (64,505) (59,337) (119,977) (74,549)
Others (141,802) (372,163) (268,273) (880,586)
(3,413,132) (3,588,001) (6,848,228) (7,482,825)
Selling expenses
Salaries and benefits (9,244) (8,958) (21,668) (16,949)
Sales and marketing (191,480) (179,820) (393,431) (353,817)
(200,724) (188,778) (415,099) (370,766)
Administrative expenses
Salaries and benefits (56,832) (35,116) (88,113) (67,439)
Depreciation and amortization ^(a)^ (3,062) (2,488) (6,028) (4,763)
Insurance (611) - (2,642) -
Others (86,740) (38,086) (177,527) (117,685)
(147,245) (75,690) (274,310) (189,887)
Other income (expenses), net
Others 29,537 (100,509) (71,603) (219,797)
29,537 (100,509) (71,603) (219,797)
Total (3,731,564) (3,952,978) (7,609,240) (8,263,275)

(a)  Net of PIS and COFINS credits in the amount of R$428 in the quarter and R$819 in the six months.

| 52 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 35. | FINANCIAL RESULT | | --- | --- | | | Parent company | | | | | --- | --- | --- | --- | --- | | | Three-month periods ended | | Six-month periods ended | | | Description | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | | Financial income | | | | | | Short and long-term investments | 18 | 24 | 51 | 151 | | Others | 2,311 | 78 | 2,568 | 1,678 | | | 2,329 | 102 | 2,619 | 1,829 | | Financial expenses | | | | | | Interest on loans and financing | (10,568) | - | (10,568) | - | | Interest on convertible instruments | (66,038) | (61,877) | (128,033) | (122,608) | | Amortized cost of loans and financing | (2,392) | - | (2,392) | - | | Amortized cost of convertible instruments | - | (1,250) | - | (2,441) | | Cost of financial operations | (8) | (175) | (161) | (275) | | Others | - | (1,711) | (2,041) | (1,711) | | | (79,006) | (65,013) | (143,195) | (127,035) | | Derivative financial instruments, net | 205,598 | (188,798) | 357,171 | (269,837) | | Foreign currency exchange, net | (156,340) | 68,735 | (197,808) | 91,340 | | Financial result | (27,419) | (184,974) | 18,787 | (303,703) | | | Consolidated | | | | | --- | --- | --- | --- | --- | | | Three-month periods ended | | Six-month periods ended | | | Description | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | | Financial income | | | | | | Short and long-term investments | 33,810 | 22,436 | 65,295 | 40,172 | | Interest on sublease receivables | 746 | 3,576 | 1,579 | 7,546 | | TAP Bond fair value | 1,865 | 15,569 | 3,005 | 43,607 | | Others | 14,573 | 9,402 | 26,039 | 13,124 | | | 50,994 | 50,983 | 95,918 | 104,449 | | Financial expenses | | | | | | Interest on loans and financing ^(a)^ | (325,383) | (137,654) | (617,799) | (283,909) | | Interest on lease | (596,070) | (635,882) | (1,136,322) | (1,291,024) | | Interest on convertible instruments | (66,038) | (61,877) | (128,033) | (122,608) | | Interest on factoring credit card receivables | (80,271) | (91,907) | (160,061) | (206,649) | | Interest on provisions | (3,930) | (74,031) | (40,139) | (140,727) | | Interest on reverse factoring | (3,111) | - | (8,372) | (12,258) | | Interest accounts payable and airport taxes and fees | (118,052) | (93,931) | (213,152) | (159,864) | | Guarantee commission | (41,875) | (37,230) | (63,036) | (87,347) | | Amortized cost of loans and financing | (21,683) | (7,318) | (33,695) | (15,082) | | Amortized cost of convertible instruments | - | (1,250) | - | (2,441) | | Cost of financial operations | (30,373) | (15,043) | (59,748) | (30,611) | | TAP Bond fair value | (738) | - | (6,609) | (10,628) | | Others | (46,805) | (41,976) | (91,286) | (92,535) | | | (1,334,329) | (1,198,099) | (2,558,252) | (2,455,683) | | Derivative financial instruments, net | 168,497 | (235,616) | 358,440 | (510,588) | | Foreign currency exchange, net | (3,168,414) | 1,105,423 | (4,037,168) | 1,679,842 | | Financial result | (4,283,252) | (277,309) | (6,141,062) | (1,181,980) |

(a) Net of PIS and COFINS credits in the amount of R$9,358.

| 53 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 36. | RISK MANAGEMENT | | --- | --- | | 36.1 | Fair value hierarchy of financialinstruments | | --- | --- |

The fair value hierarchy of the Company's consolidated financial instruments, as well as the comparison between book value and fair value, are identified below:

Parent company
Carrying amount Fair value
Description Note Level June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Liabilities
Convertible debt instruments – conversion right 23 2 (131,604) (488,775) (131,604) (488,775)
Consolidated
--- --- --- --- --- --- ---
Carrying amount Fair value
Description Note Level June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Assets
Long-term investments – TAP Bond 6 2 884,454 780,312 884,454 780,312
Derivative financial instruments 23 2 4,391 21,909 4,391 21,909
Liabilities
Loans and financing 18 2 (13,463,146) (9,698,912) (12,243,236) (9,796,608)
Convertible debt instruments – conversion right 23 2 (131,604) (488,775) (131,604) (488,775)
Derivative financial instruments 23 2 (35,519) (69,745) (35,519) (69,745)

Financial instruments whose fair value approximates their carrying value, based on established conditions, mainly due to the short maturity period, were not disclosed.

| 54 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---

36.2.1       Interestrate risk

36.2.1.1       Sensitivityanalysis

As of June 30, 2024, the Company held financial assets and liabilities linked to various types of rates. In the sensitivity analysis of non-derivative financial instruments, the impact on annual interest was only considered on positions with values exposed to such fluctuations:

Consolidated
Exposure to CDI Exposure to SOFR
Description Rate (p.a.) June 30, 2024 Weighted Rate (p.a.) June 30, 2024
Exposed assets (liabilities), net 10.4% (937,223) 5.3% (760,135)
Effect on profit or loss
Interest rate devaluation by -50% 5.2% 48,748 2.7% 20,225
Interest rate devaluation by -25% 7.8% 24,374 4.0% 10,112
Interest rate appreciation by 50% 15.6% (48,748) 8.0% (20,225)
Interest rate appreciation by 25% 13.0% (24,374) 6.7% (10,112)

Assets and liabilities previously linked to LIBOR were reviewed and updated by SOFR.

36.2.2       Aircraftfuel price risk (“QAV”)

The price of fuel may vary depending on the volatility of the price of crude oil and its derivatives. To mitigate losses linked to variations in the fuel market, the Company had, as of June 30, 2024, forward and options transactions on fuel (note 23).

36.2.2.1       Sensitivityanalysis

The following table demonstrates the sensitivity analysis in US dollars of the price fluctuation of QAV liter:

Consolidated
Exposure to price
Description Average price per liter(in reais) June 30, 2024
Aircraft fuel 4.47 (2,726,854)
Effect on profit or loss
Devaluation by -50% 2.24 1,363,427
Devaluation by -25% 3.35 681,714
Appreciation by 50% 6.71 (1,363,427)
Appreciation by 25% 5.59 (681,714) 
| 55 |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- |

36.2.3       Foreignexchange risk

The foreign exchange risk arises from the possibility of unfavorable exchange differences to which the Company's cash flows are exposed.

The equity exposure to the main variations in exchange rates is shown below:

Parent company
Exposure to US Exposure to
Description June 30, 2024 June 30, 2024
Assets
Cash and cash equivalents 489 431
Deposits 8,959 -
Related parties 2,538,162 -
Total assets 2,547,610 431
Liabilities
Convertible debt instruments (1,000,991) -
Leases (2,372,856) -
Accounts payable (150,846) -
Related parties (744,894) -
Total liabilities (4,269,587) -
Net exposure (1,721,977) 431
Net exposure in foreign currency (309,769) 72

All values are in US Dollars.

Consolidated
Exposure to US Exposure to
Description June 30, 2024 June 30, 2024
Assets
Cash and cash equivalents 86,238 5,224
Long-term investments - 884,454
Accounts receivable 318,805 1,196
Aircraft sublease 13,881 -
Deposits 2,795,370 -
Other assets 16,955 -
Total assets 3,231,249 890,874
Liabilities
Loans and financing (11,126,346) -
Leases (17,781,735) -
Convertible debt instruments (1,000,991) -
Accounts payable (2,608,813) -
Airport taxes and fees (2,049) -
(3,216,189) -
Provisions and other liabilities (50,288) (14)
Total liabilities (35,786,411) (14)
Net exposure (32,555,162) 890,860
Net exposure in foreign currency (5,856,404) 149,606

All values are in US Dollars.

36.2.3.1       Sensitivityanalysis

Parent company
Exposure to US Exposure to
Description Closing rate Closing rate
Exposed assets (liabilities), net 5.5589 5.9547
Effect on profit or loss
Foreign currency devaluation by -50% 2.7795 2.9774
Foreign currency devaluation by -25% 4.1692 4.4660
Foreign currency appreciation by 50% 8.3384 8.9321
Foreign currency appreciation by 25% 6.9486 7.4434

All values are in US Dollars.

Consolidated
Exposure to US Exposure to
Description Closing rate Closing rate
Exposed assets (liabilities), net 5.5589 5.9547
Effect on profit or loss
Foreign currency devaluation by -50% 2.7795 2.9774
Foreign currency devaluation by -25% 4.1692 4.4660
Foreign currency appreciation by 50% 8.3384 8.9321
Foreign currency appreciation by 25% 6.9486 7.4434

All values are in US Dollars.

36.3 Credit risk

Credit risk is inherent to the Company's operating and financial activities, mainly disclosed in cash and cash equivalents, long-term investments, accounts receivable, aircraft sublease, security deposits and maintenance reserves. Financial assets classified as cash and cash equivalents are deposited with counterparties that have a minimum investment grade. The TAP Bond is guaranteed by intellectual property rights and credits related to the TAP mileage program.

Credit limits are established for all customers based on internal classification criteria and the carrying amounts represent the maximum credit risk exposure. Outstanding receivables from customers are frequently monitored by the Company and, when necessary, allowances for expected credit losses are recognized.

Derivative financial instruments are contracted on the over-the-counter (OTC) market with counterparties that maintain a relationship, and can be contracted on commodity and futures exchanges (B3 and NYMEX), which mitigates and contributes to credit risk. The Company assesses the risks of counterparties in financial instruments and diversifies exposure periodically.

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |
---
--- ---

The maturity schedules of the Company’s consolidated financial liabilities as of June 30, 2024 are as follows:

Consolidated
Description Carrying amount Contractual cash flow Until 1 year From 2 to 5 years After 5 years
Loans and financing 12,593,759 18,653,828 2,749,697 12,068,624 3,835,507
Reverse factoring 45,493 46,012 46,012 - -
Leases 17,885,831 29,270,515 4,791,710 18,039,500 6,439,305
Convertible debt instruments 1,000,991 2,080,851 164,322 1,916,529 -
Accounts payable 4,524,351 4,955,371 3,277,724 1,116,543 561,104
Airport taxes and fees 1,670,621 1,883,773 914,284 727,195 242,294
37,721,046 56,890,350 11,943,749 33,868,391 11,078,210
36.5 Capital management
--- ---

The Company seeks capital alternatives in order to satisfy its operational needs, aiming for a capital structure that it considers adequate for the financial costs and the maturity terms of the funding and its guarantees. The Company's Management continually monitors its net debt.

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 37. | NON-CASH TRANSACTIONS | | --- | --- | | | Consolidated | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Description | Aircraft sublease | Acquisition of property and equipment | Acquisition of capitalized maintenance | Maintenance prepayment | Acquisition of intangible | Maintenance reserves | Sublease Compensations | Reverse factoring | Sale and leaseback | Compensation of lease | Compensation of accounts payable | Acquisition of lease | Addition the ARO | Lease Modifications | Others | Total | | Accounts receivable | - | - | - | - | - | 85,039 | - | - | (84,633) | (69,105) | - | (11,117) | - | - | - | (79,816) | | Aircraft sublease | (14,366) | - | - | - | - | - | (7,995) | - | - | - | - | - | - | - | - | (22,361) | | Inventories | - | - | - | - | - | - | - | - | - | - | - | (2,261) | - | - | (15,337) | (17,598) | | Deposits | - | - | - | - | - | (9,031) | - | - | - | - | - | - | - | - | - | (9,031) | | Advances to suppliers | - | - | - | - | - | - | - | - | - | - | (867,948) | - | - | - | - | (867,948) | | Property and equipment | - | 340,309 | - | - | - | - | - | - | - | - | - | (8,395) | - | - | (47,301) | 284,613 | | Right-of-use assets | 14,366 | - | 38,038 | - | - | - | - | - | - | - | - | 1,098,109 | 285,575 | 188,029 | - | 1,624,117 | | Intangible assets | - | - | - | - | 66,611 | - | - | - | - | - | - | - | - | - | - | 66,611 | | Other assets | - | - | - | 222,683 | - | - | - | - | - | - | - | (28,367) | - | - | - | 194,316 | | Loans and financing | - | (221,108) | - | - | - | - | - | - | - | - | - | - | - | - | - | (221,108) | | Leases | - | - | - | - | - | - | 7,995 | - | - | 69,105 | - | (1,056,765) | - | (170,552) | - | (1,150,217) | | Accounts payable | - | (119,201) | (38,038) | (222,683) | (66,611) | (76,008) | - | 160,146 | 84,633 | - | 867,948 | 4,893 | - | - | 62,638 | 657,717 | | Reverse factoring | - | - | - | - | - | - | - | (160,146) | - | - | - | - | - | - | - | (160,146) | | Provisions | - | - | - | - | - | - | - | - | - | - | - | - | (285,575) | (17,477) | - | (303,052) | | Other liabilities | - | - | - | - | - | - | - | - | - | - | - | 3,903 | - | - | - | 3,903 | | June 30, 2024 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | | Description | Acquisition of property and equipment | Acquisition of capitalized maintenance | Acquisition of intangible | Maintenance reserves | Compensation of sublease | Compensation of lease | Acquisition of lease | ARO | Modification | Transfers | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Accounts receivable | - | - | - | - | - | (35,966) | - | - | - | 116,948 | 80,982 | | Aircraft sublease | - | - | - | - | (14,741) | - | - | - | - | - | (14,741) | | Deposits | - | - | - | 293,196 | - | - | - | - | - | (116,948) | 176,248 | | Advances to suppliers | - | - | - | - | - | - | - | - | - | (922,310) | (922,310) | | Property and equipment | 54,064 | - | - | - | - | - | - | - | - | (12,977) | 41,087 | | Right-of-use assets | - | 34,123 | - | - | - | - | 481,340 | 143,109 | (591,527) | 12,785 | 79,830 | | Intangible assets | - | - | 30,309 | - | - | - | - | - | - | 192 | 30,501 | | Loans and financing | - | - | - | - | - | - | - | - | - | (14,464) | (14,464) | | Leases | - | - | - | - | 14,741 | 39,526 | (494,970) | - | 520,521 | 14,464 | 94,282 | | Accounts payable | (54,064) | (34,123) | (30,309) | (293,196) | - | - | 9,594 | - | - | 975,254 | 573,156 | | Provisions | - | - | - | - | - | - | - | (143,109) | 121,008 | - | (22,101) | | Other assets and liabilities | - | - | - | - | - | (3,560) | 4,036 | - | - | (52,944) | (52,468) | | Result | - | - | - | - | - | - | - | - | (50,002) | - | (50,002) | | June 30, 2023 | - | - | - | - | - | - | - | - | - | - | - |

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| **AZUL S.A.**<br><br>**Notes to the interim condensed individual and consolidated financial statements**<br><br>June 30, 2024<br>\(In thousands of Brazilian reais – R$, unless otherwise indicated\) |

| --- | | 38. | COMMITMENTS | | --- | --- | | 38.1 | Aircraft acquisition | | --- | --- |

Through contracts with manufacturers and lessors, the Company committed to acquiring certain aircraft, as follows:

Consolidated
Description June 30, 2024 December 31, 2023
Lessors 30 31
Manufacturers 94 96
124 127

The amounts shown below are brought to present value using the weighted discount rate for lease operations, equivalent to 15.4% (15.8% on December 31, 2023) and do not necessarily represent a cash outflow, as the Company is evaluating the acquisition of financing to meet these commitments.

Consolidated
Description June 30, 2024 December 31, 2023
2024 632,021 916,053
2025 1,561,967 1,290,764
2026 6,171,248 4,991,454
2027 5,412,919 4,359,775
2028 3,230,189 2,595,179
After 2028 2,780,269 2,294,727
19,788,613 16,447,952
38.2 Letters of credit
--- ---

The position of the letters of credit in use by the Company follows, for the following purposes:

Consolidated
June 30, 2024 December 31, 2023
Description R$ US$ R$ US$
Security deposits and maintenance reserve 2,234,950 402,049 1,979,883 408,957
Bank guarantees 9,520 - 9,161 -
2,244,470 402,049 1,989,044 408,957

Elton Flavio Ribeiro

CRC 1SP 253891/O-0

Controllership and tax director

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:    August 12, 2024

Azul S.A.

**** By:   /s/ Alexandre Wagner Malfitani                                  Name: Alexandre Wagner Malfitani Title: Chief Financial Officer

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