August 8, 2019 / 12:10 PM / 6 months ago

UPDATE 1-Brazil airline Azul beats profit expectations with focus on domestic flights

(Adds details of results, background)

SAO PAULO, Aug 8 (Reuters) - Brazil’s No. 3 airline, Azul SA, beat profit expectations in the second quarter as it doubled down on domestic flights, trimmed an international expansion, and saw a 21% jump in the number of passengers transported that outpaced capacity growth.

The airline posted a profit of 345 million reais in the quarter, while analysts expected it to earn 84.6 million reais, according to a poll by Refinitiv data.

“We have reduced our international capacity growth at the same time as we are strengthening our presence in domestic markets, where there is more potential to increase profitability,” the company said in a statement.

Azul recently obtained the rights to additional flights in Brazil’s most desired domestic airport, Congonhas, located in Sao Paulo, after a bitter dispute with its larger rivals LATAM Airlines Group and Gol Linhas Aereas Inteligentes .

The slots, as the rights are known, will allow Azul to boost its presence in some of the most heavily transited domestic routes.

The airline also revised its outlook for 2019, raising its capacity growth guidance in domestic flights to up to 25% from up to 20%, while reducing its guidance for international flight growth to up to 15%, from up to 25%.

$1 = 3.9686 reais Reporting by Marcelo Rochabrun; Editing by Bernadette Baum

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