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UPDATE 1-Brazil airline Azul narrows losses in 4th quarter but faces second pandemic wave

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Marcelo Rochabrun
·1 min read
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(Updates with more details from earnings results)

By Marcelo Rochabrun

SAO PAULO, March 4 (Reuters) - Brazil's No. 3 airline, Azul SA, on Thursday reported a net loss of 317.4 million reais ($56.6 million) in the fourth quarter, the carrier's best performance since the pandemic upended air travel.

Shares opened flat in Sao Paulo following the results.

During the last quarter of 2020, Azul said it operated at domestic capacity that was 91% of its pre-pandemic capacity.

But the airline will struggle to keep those high capacity numbers in the first quarter because of a crippling second coronavirus wave that is likely to further hamper travel. Just this week, Brazil reported record death numbers two days in a row, and Sao Paulo and Rio de Janeiro, the country's two largest cities, have mandated curfews.

Despite the better results in the fourth quarter, the pandemic has deeply affected the company's finances. While revenue doubled compared with the third quarter, reaching 1.8 billion reais, it stands at roughly half what Azul's revenue was before the pandemic.

The airline's liquidity doubled to 3 billion reais in the same period, but that was mostly due to the issuance of new debt.

Overall in 2020, Azul lost 10.8 billion reais ($1.92 billion) and the company reported an accumulated deficit of 18 billion reais in its balance sheet.

($1 = 5.62 reais) (Reporting by Marcelo Rochabrun; Editing by Christian Plumb and Steve Orlofsky)