A.History and Development of the Company We are incorporated as a Brazilian sociedade por ações under the corporate name Azul S.A. Our headquarters are at Avenida Marcos Penteado de Ulhôa Rodrigues, n. 939, 8th floor, Edifício Jatobá, Condomínio Castelo Branco Office Park, Tamboré, Zip Code 06460-040, in the city of Barueri, State of São Paulo – Brazil. Our telephone number is +55 11 4134-9800 and our website is https://ri.voeazul.com.br/en. In addition, the SEC maintains a website at www.sec.gov that contains information filed electronically by us. The information contained on our website, any website mentioned in this annual report or any website directly or indirectly linked to these websites, is not part of, and is not incorporated by reference in, this annual report and you should not rely on such information. We are registered with the Board of Trade of the state of São Paulo under corporate registration number, or NIRE, number 35.300.361.130. We have been registered with the CVM as a publicly held corporation since April 7, 2017. We were founded on January 3, 2008 by entrepreneur David Neeleman and began operations on December 15, 2008. Backed by Mr. Neeleman and other strategic shareholders, we have benefited from our partnerships and have invested in a robust and scalable operating platform. We have a management team that effectively combines local market expertise with diversified international experience and knowledge of best practices from the United States, the largest aviation market in the world, according to IATA (International Air Transport Association). Our start-up capital in 2008 of R$400.7 million enabled us to invest up-front in a scalable operating platform and efficient young fleet. After less than six months of operations, we became Brazil’s third-largest airline in terms of domestic market share in May 2009, according to ANAC. Our passenger operating fleet has grown from three Embraer E-Jets in December 2008 to a total of 176 aircraft in our passenger operating fleet as of December 31, 2025, consisting of 61 Embraer E-Jets, 27 ATR aircraft, 60 Airbus narrowbody aircraft, 5 Airbus widebody aircraft and 23 Cessna Caravan aircraft. In August 2012, we acquired TRIP, which at the time was the largest regional carrier in South America by number of destinations. The fleet similarity between the two airlines allowed us to integrate all of TRIP’s activities by June 2014. The TRIP acquisition substantially increased our network connectivity, enabling us to serve 106 destinations upon completion of the acquisition and to become the leading carrier in terms of departures in that year as well as to consolidate our position as a leader in Brazil’s fast-growing regional aviation market, according to ANAC (Brazil’s National Civil Aviation Agency). As of December 31, 2025 we had the largest airline network in Brazil in terms of departures and cities served, with around 970 daily departures spanning 160 destinations, creating a network of more than 390 non-stop routes. Leveraging the strength of the network we built over the previous years, in December 2014 we started operating international flights with Airbus A330 aircraft, gaining the ability to serve millions of passengers that connected throughout our network. As part of our plans to expand globally, we have also established codeshare agreements with carriers such as United and TAP, giving our passengers the ability to connect to more than 400 destinations worldwide in addition to the 160 destinations we currently serve. On February 21, 2020, our wholly-owned subsidiary, ALAB, and TwoFlex (rebranded Azul Conecta), announced that they entered into a Quota Purchase Agreement under which we agreed to acquire the Brazilian regional carrier TwoFlex for the total purchase price of R$123 million. Azul Conecta is a domestic airline based in Jundiaí, Brazil, founded in 2013, that offers, currently, regular passenger service more than 60 destinations in Brazil, of which only three regional destinations were previously served by Azul. Azul Conecta’s fleet is composed of 23 owned Cessna Caravan aircraft, a regional turboprop with a 9-passenger capacity. Azul S.A. 57 In October 2021, we entered into a strategic partnership with Disney to offer a unique experience to our customers through our “magical fleet”. The initial steps of the partnership consisted of the new A320neo airplane with a Mickey Mouse-inspired painting and the A321neo airplane with a Minnie-inspired painting. During 2022, the new A320neo airplane with a Donald Duck-inspired painting and the A320neo with a Daisy-inspired painting also joined the magic fleet of Azul. In 2024, Disney's Goofy was the theme the new A320neo airplane, the fifth plane within Azul's magical fleet. In 2025, Azul Cargo, our logistics business reached R$1.3 billion in net revenues, a 12.9% increase over 2024. In 2022, we announced the launch of the Embraer Class-F freighter, a cargo aircraft that can provide competitive advantages for our clients. Azul Cargo currently serves more than 5,100 cities and communities across the country, 2,300 of which we can deliver to in 48 hours or less. Azul Fidelidade, our wholly-owned loyalty program, had more than 20 million members as of December 31, 2025. Azul Viagens, our vacations business, is another important driver of margin expansion. In 2025, we sold 56.6% more travel packages compared to 2024, mainly by leveraging the uniqueness of our network and the flexibility of our fleet. During weekends, for example, when utilization is normally low for airlines, we dedicated 13% of our capacity to fly exclusive non-stop leisure routes, which are ideal for Azul Viagens. In 2025, the economic distress and travel disruptions that resulted from the COVID-19 pandemic and a catastrophic flood in 2024 which forced the temporary closure of Porto Alegre airport (one of our strategic airports), combined with a difficult macroeconomic environment led us to seek relief under the Voluntary Reorganization. Following confirmation of the Plan and our emergence from the Chapter 11 Cases on February 20, 2026, we implemented the principal restructuring measures contemplated by the Plan, which strengthened our capital structure and enhanced our liquidity position. See “Item 5. Operating and Financial Review and Prospects—Operating Results—Impact of the Voluntary Reorganization on our Results of Operations” and “Item 4.B Business Overview—Voluntary Reorganization.” B.Business Overview General We are the largest airline in Brazil in terms of cities served, according to ANAC (Brazil’s National Civil Aviation Agency), with around 970 daily departures to 160 destinations, creating a network of more than 390 non-stop routes as of December 31, 2025. As the sole airline on 80% of our routes, we are the leading airline in 115 Brazilian cities in terms of departures according to ANAC, and carried about to 30 million passengers in the year ended December 31, 2025. In addition to having an extensive network, optimized fleet, and a high-quality product, we also have strategic revenue generating business units including our wholly-owned loyalty program Azul Fidelidade, our logistics solutions business Azul Cargo and Azul Viagens, our tourism travel business. Brazil is geographically similar in size to the continental United States and is currently the fifth largest market for domestic airline passengers in the world, according to Cirium. Since 2008, the number of domestic airline passengers carried in Brazil has increased by 102% to 101 million in 2025, according to ANAC. We have the most extensive route network in Brazil, serving 160 domestic destinations, about twice as many as our main competitors Gol and LATAM, which served 65 and 59 destinations respectively as of December 31, 2025, according to data from those companies. We are the only provider of scheduled service to 80 of our domestic destinations and hold the leading position in four out of the 10 largest domestic airports in which we operate in terms of departures, according to ANAC. Through our network, we connect travelers to destinations exclusively served by us from our three hubs, which cater to the São Paulo, Belo Horizonte and Recife markets, all among the largest metropolitan areas in the country. Notably, we are the leading airline at Viracopos airport, one of the principal airports in the São Paulo area and the largest domestic hub in South America in terms of non-stop destinations served, with a 96% share of its 140 domestic daily departures as of December 31, 2025, according to data from ANAC. 58 Azul S.A. We operate a young, fuel-efficient fleet that we believe is better tailored for Brazil than those of our main competitors, as it allows us to serve markets with different demographics, ranging from large capitals to smaller cities. As of December 31, 2025, our passenger operating fleet in service totaled 155 aircraft. with an average age of 7.2 years (excluding Cessna aircraft), which is significantly younger than that of our main competitors. We believe that our diversified fleet is optimized to efficiently match capacity to demand. This enables us to offer superior connectivity as well as more convenient and frequent non-stop service to more airports than our main competitors, Gol and LATAM, which mainly operate larger aircraft. A key driver of our profitability is our management team’s extensive experience in implementing a disciplined, low-cost operating model. Our optimized fleet yields lower trip costs than our main competitor, according to data published by the relevant company. With the recovery and the increase in the number of next-generation Airbus A320neos and Embraer E2s in our fleet in the coming years, we expect to maintain our market-leading low trip cost advantage. In addition, we believe our FTEs per aircraft were the lowest in Brazil as of December 31, 2025. We have built a strong brand by offering what we believe is a superior travel experience, based on a culture of customer service provided by a highly-motivated and well-trained team of Crewmembers. Our service features include advance seat assignment, leather seats, individual entertainment screens with free live television at every seat in all our Embraer jets and most of our A320neos, extensive legroom with a pitch of 30 inches or more, complimentary beverage and snack services, and free bus service to key airports we serve. In addition, we offer Wi-Fi service in some of our A320neo and E2 fleet and are currently installing it in additional aircraft. As a result of our strong focus on customer service, our NPS (Net Promoter Score) average in 2025 totaled 38.5. In 2020, Azul was awarded best airline in the world by TripAdvisor, the first time a Brazilian Flag Carrier ranked number one in the Traveler’s Choice Awards. We were also recognized as the 4th most on time airline in 2025, the 6th most on time airline in 2024 and the 2nd most on time airline in 2023, with on time rates of 85.2%, 82.4% and 85.7%, respectively, according to Cirium. We continue to invest in and expand our loyalty program Azul Fidelidade, which had more than 20 million members as of December 31, 2025. Azul Fidelidade has been the fastest growing loyalty program in terms of members in Brazil for the past nine years compared to Smiles and LATAM Pass, the loyalty programs of Gol and LATAM respectively, according to information made publicly available by such companies. We believe that the Azul Itaucard Infinite is the best positioned co-branded credit card in the Itaucard portfolio, which was awarded the “Best credit card from Brazilian airlines” by Melhores Destinos in 2025. Given our network strength and the expected growth of passenger air travel, credit card penetration and usage and customer loyalty in Brazil, we believe that Azul Fidelidade is a key strategic asset for us. Given our network strength and the expected growth of passenger air travel, credit card penetration and usage and customer loyalty in Brazil, we believe that Azul Fidelidade is a key strategic asset for us. In the year ended December 31, 2025, we generated net revenue of R$21.6 billion and a gain for the year of R$124.9 million. Strengths and Opportunities Our Competitive Strengths We believe the following business strengths allow us to compete successfully: Largest Network in Brazil We have the largest network in Brazil in terms of departures and cities served, with around 970 daily departures to 160 destinations, creating a network of more than 390 non-stop routes as of December 31, 2025, according to ANAC. We believe our connectivity at large hubs allows us to consolidate traffic, serving larger and medium-sized markets as well as smaller cities that do not generate sufficient demand for point-to-point service. We believe that our extensive network coverage allows us to connect more passengers than our competitors, who serve significantly fewer destinations. As of December 31, 2025, we served 160 destinations in Brazil, compared to 65 for Gol and 59 for LATAM. In addition, we were market leader in 88% of our routes as of December 31, 2025. By comparison, as of December 31, 2025, Gol and LATAM were leading carriers in 13 and 21 cities in Brazil, respectively. In addition, the routes in which we hold a leadership position represent approximately 82% of our total ASKs. Azul S.A. 59 Our Optimized Fleet Enables us to Efficiently Serve our Target Markets Our fleet strategy is based on optimizing the type of aircraft for the different markets we serve. Our diversified fleet of ATR, E-Jets and Airbus aircraft enables us to serve markets that we believe our main competitors, who fly mainly larger narrow-body aircraft, cannot serve profitably. We believe our current fleet of aircraft allows us to match capacity to demand, achieve high load factors, provide greater convenience and frequency, and serve low and medium density routes and markets in Brazil that are not served by our main competitors. Our domestic fleet consists of Embraer E-Jets which seat up to 136 passengers, fuel-efficient ATR aircraft which seat 70 passengers, next-generation Airbus A320neos which seat 174 passengers and Cessna Caravan which seat 9 passengers, while the narrow-body aircraft used by Gol and LATAM in Brazil have between 138 and 220 seats. We also operate Airbus A330s to serve international markets, E-Jets converted to dedicated freighters and two Airbus A321 freighter aircraft to support our cargo business. Our fleet plan focuses on maintaining a trip cost advantage relative to our main competitors while also providing us with flexibility for growth into new markets both domestically and internationally. Based on our current firm orders, we expect to continuously transform our fleet adding next-generation E2 aircraft and A320neo aircraft mainly for domestic market and improving our international fleet with A330neo aircraft replacing older generation aircraft. These new generation aircraft are more fuel-efficient than older generation aircraft, and therefore we expect that our fleet plan will allow us to maintain market-leading trip costs and to reduce our CASK, both in absolute terms and relative to our main competitors. Optimized Passenger Yields We utilize a proprietary yield management system that is key to our strategy of optimizing yield through dynamic fare segmentation and demand stimulation. We target both business travelers, to whom we offer convenient flight options, and cost-conscious leisure travelers, to whom we offer low fares to stimulate air travel and to encourage advanced purchases. This segmentation model has enabled us to achieve a PRASK of R$39.28 cents in the year ended December 31, 2025, and R$39.15 in December 31, 2024. We believe our superior network and product offering allows us to attract high-yield and frequent business travelers. According to ABRACORP, in 2025, we held a 31.5% share in terms of Brazilian revenue share. Most Efficient Cost Structure in the Brazilian Market We have leveraged our management team’s experience by implementing a disciplined, low-cost operating model to achieve our operational efficiencies. We believe we have achieved these operational efficiencies primarily through: •optimized aircraft for markets and routes served; •low cost of sales, distribution and marketing through direct-to-consumer marketing, e-commerce and associated use of social networking tools; •lower costs due to single-class cabin configuration for our domestic flights; •operation of a modern fleet with better fuel-efficiency and lower maintenance costs than previous generation aircraft; •innovative and beneficial financial arrangements for our aircraft, as a result of being one of the largest customers for Embraer and ATR aircraft; •investment in check-in technology to increase operating efficiencies; and •creation of a company-wide business culture focused on driving down costs. As a result, on December 31, 2025 our average cost per flight of our fleet was R$55,739. 60 Azul S.A. We have a scalable operating platform that features advanced technology such as ticketless reservations, an Oracle financial system, a mobile app, and electronic check-in kiosks at our main destination airports. We believe that our scalable platform provides superior reliability and safety and will generate economies of scale as we continue to expand. High-Quality Customer Experience Through Product and Service-Focused Culture We believe we provide a high-quality, differentiated travel experience and have a strong culture focused on customer service. Our Crewmembers are trained to be service-oriented, focusing on providing the customer with a travel experience that we believe is unique among Brazilian airlines. We provide extensive training for our Crewmembers that emphasizes the importance of both safety and customer service. We strive to hold our employees accountable to maintain the quality of our crew and customer service. Our service features include advance seat assignment, leather seats, individual entertainment screens with free live television at every seat in all our jets, extensive legroom with a pitch of 30 inches or more, complimentary beverage and snack service, free bus service to key airports we serve (including between the city of São Paulo and Viracopos airport) and a fleet younger than that of our competitors. We also offer Wi-Fi services in most of our A320 neo and E2 fleet. We focus on meeting our customers’ needs and in 2025 Azul was elected the fourth most on-time airline in the world, according to Cirium. We were the first Brazilian airline to achieve this recognition in 2022, awarded by Cirium, the world's leading reference for operational data in the airline industry. An airline is considered punctual when its flights land up to 14 minutes after the planned arrival time, and Azul has been recognized for meeting this goal in most of its almost 1,000 daily flights. We are very proud to show the world the excellence of Brazilian work. Well-Recognized Brand We believe we have been successful in building a strong brand by using innovative marketing and advertising techniques with low expenditures that focus on social networking tools to generate word-of-mouth recognition of our high-quality service. As a result of our strong focus on customer service, surveys that we have conducted indicate that, as of December 31, 2025, 71% of our customers would recommend or strongly recommend Azul to a friend or relative. In addition, we use the NPS (Net Promoter Score) metric to measure customer satisfaction and in 2025, our average score totaled 38.5. The strength of our brand has been recognized in a number of awards, most recently being named the “Best Domestic Airline” by Melhores Destinos’s Awards 2025 for the seventh consecutive year, named the “Best Brazilian Airline” by the Consumidor Moderno’s Award 2025 for the fourth consecutive year, being named “Best Regional Airline of South America” by SkyTrax’s World Airline Awards 2025 and being named “Mais Brasil Airline” by Secretaria Nacional de Aviação Civil’s Aviação Mais Brasil 2025 Awards. In addition, as a result of our strong brand awareness and focus on customer service, our Azul Fidelidade loyalty program had more than 20 million members as of December 31, 2025 and has been recognized with various awards, including being named “Best National Loyalty Program” for fifth time by Melhores Destinos 2024 and winning the “Points and Advantage Club Programs” category by Reclame Aqui Awards 2024. Experienced Management Team We believe we benefit from our knowledgeable and experienced management team. Our senior management, which has senior airline experience both in Brazil and in the United States, includes: •our Chairman and Founder David Gary Neeleman, a dual Brazilian and U.S. citizen, who has founded five airlines in three different countries, including JetBlue Airways and Breeze; •our Chief Executive Officer, John Peter Rodgerson, who previously served as our Chief Financial Officer and our Investor Relations Officer, where he was responsible for implementing our financial strategy and cost structure since our inception. Mr. Rodgerson also served as Director of Planning and Financial Analysis at JetBlue Airways for five years, and as President of our main operating subsidiary – ALAB, from August 2019 to October 2022; Azul S.A. 61 •our Chief Financial Officer and Investor Relations Officer, Alexandre Wagner Malfitani, who previously served as the Head of our Azul Fidelidade loyalty program, and our Director of Finance and Treasurer. Before joining Azul, Mr. Malfitani held the position of Managing Director of Treasury at United Airlines, having also worked in the finance industry, including as a fund manager at Deutsche Bank and as a trader at Credit Agricole Indosuez; •our Chief Revenue Officer, Abhi Manoj Shah, who has nearly 20 years of experience in the aviation industry and has previously held executive positions at JetBlue Airways and Boeing. He was responsible for developing our yield management, network planning and revenue structure. Mr. Shah also serves as President of our main operating subsidiary – ALAB, since October 2022; and •our Chief Technical Officer, Daniel Tkacz, who has been part of the Azul crewmember team since 2009 and has over 20 years of experience in the airline industry. Throughout his career at Azul, he has served as a director of Planning and as Chief Commercial Officer. Most of our senior management team has worked together for almost ten years and has been with us since our launch. All non-Brazilian individuals on the team are residents in Barueri, State of São Paulo, with permanent work visas. Certain of our principal directors and officers are or may be equityholders in our company, and all are motivated by participation in our stock-based incentive plans, which we believe aligns shareholders’ and management’s interests. Our management team has focused on establishing a successful working environment and employee culture. We believe the experience and commitment of our senior management team have been a critical component in our growth, as well as in the continuing enhancement of our operating and financial performance. To align senior management interests with our results of operations, we provide a leadership incentive plan based on the achievement of pre-defined company performance targets including operating margin, customer satisfaction, Crewmember satisfaction, and on-time performance. Upon emergence from our Voluntary Reorganization, we also established a stock option plan for our leadership designed to reward performance and align the incentives of our executive management team, non-management members of our board of directors, other holders of our common shares and certain employees with our long-term strategic objectives, pursuant to which equity awards of up to 7% of our outstanding capital can be granted. See “Item 6.B. Management Compensation—MIP Approved on February 12, 2026.” Principal Strategies Adding Larger, More Fuel Efficient, Next-Generation Aircraft to our Fleet We intend to continue adding next-generation, more fuel-efficient aircraft to our fleet replacing older generation aircraft. In addition to providing us with leading low seat costs, these aircraft have more seats contributing to an increase in revenue generated from connecting traffic, our loyalty business, our cargo business, and our travel package business. Based on our current firm orders, we expect to continuously transform our fleet adding next-generation E2 aircraft and A320neo aircraft mainly for our domestic routes and improving our international fleet with A330neo aircraft replacing older generation aircraft. We have begun to introduce next-generation Airbus A320neos, which have 56 more seats than our current E-Jets for longer-haul leisure service in December 2016. At that time, we started flying between our main hub in Campinas and our other hub in Recife with our next-generation Airbus A320neos. This approximately three-hour flight provides us with a 29% lower seat cost than our current E-Jets and provides sufficient seat capacity to connect customers between both hubs. We started to introduce the Embraer E2 to replace current generation E-Jets starting in the second half of 2019. The E2s have 18 additional seats and a 25% lower cost per seat and a 14% lower cost per trip compared to the E-Jets. We believe that by applying this strategy we will continue improving our profitability going forward by reducing our cost per seat while expanding revenue. Implementing Capacity Discipline Through Network Optimization and Selective Growth 62 Azul S.A. Our growth plan for the next five years has been modified as a result of our Voluntary Reorganization. However, we will continue to replace old-generation with next generation narrowbody aircraft. There is still capacity in underserved domestic markets and we intend to continue identifying and entering those with high growth potential based on profitability performance. We also are concentrating our flights in our hubs. We will continue to optimize connectivity within our hub structure by selectively increasing frequencies and deploying the appropriate gauge where demand supports it, but we expect growth to be selective and evidence-based, prioritizing route economics and network contribution. Fleet deployment remains a key lever because we expect a meaningful portion of our capacity evolution to come from upgauging (including replacement of smaller aircraft with larger next-generation aircraft where appropriate), while maintaining a balanced aircraft mix and slowing new deliveries as needed to align capacity with demand and profitability. We also intend to retain and utilize cost-efficient Embraer E-Jets (E1s) where they provide attractive unit economics and schedule flexibility in our network. We also plan to pursue selective international growth that leverages our strongest domestic feed through our core hubs (including Campinas, Belo Horizonte and Recife) and focuses on high-demand international and leisure flows, supported by our partnership ecosystem. In addition, the strategic equity investments by United Airlines and American are expected to provide not only capital, but also industry expertise and commercial support as we execute this lower-risk plan focused on disciplined capacity deployment and improved financial performance. Continue to Unlock Value from our Azul Fidelidade Loyalty Program As a result of the growth of our network, we believe there is an opportunity to further unlock value from our Azul Fidelidade loyalty program. With more than 20 million members as of December 31, 2025, Azul Fidelidade sells loyalty points to business partners as well as directly to program members. Our current business partners include financial institutions such as Itaú, Santander, Livelo (Banco do Brasil’s and Bradesco’s loyalty joint venture), Inter, Caixa, Nubank, BTG Pactual and C6 Bank, and retailers (includingVia Varejo, Magazine Luiza, KMV and Satelital Brazil), and travel partners (including All Accor Cross Rewards as an exclusive partner in Latin America, Airport Park and AssistCard). In September 2014, we launched an Azul-branded credit card in partnership with Banco Itaucard S.A. In addition, in December 2015, we launched Clube Azul Fidelidade, an innovative, subscription-based product through which members pay a fixed recurring amount per month in exchange for Azul Fidelidade points, access to promotions and other benefits. We also offer members the ability to buy points to complete the amount required for a reward, or pay a fee to renew expired points or transfer points to a different member’s account. We believe that our international flights and strategic partnerships with international carriers, including United and TAP, provide our Azul Fidelidade members with a broad range of attractive redemption options. In October 2020, we also launched an Azul co-branded credit card, the Azul Itaucard Visa Infinite, which is the best positioned card in Itaú portfolio and offers the best benefit of any airline credit card in Brazil. We offer last-seat availability to Azul Fidelidade members and have significant flexibility to price redemptions in a way that is competitive with other loyalty programs, thus helping to maximize Azul Fidelidade’s attractiveness. We actively manage the price of our redemptions, offering very competitive fares in points when seat availability is high and optimizing margin in peak, high-demand flights. We have also developed an exclusive, proprietary pricing system, which provides ample flexibility to price redemptions within a given flight. This allows us to sell seats using several combinations of points and money. It also allows us to customize pricing using a number of different factors, such as a member’s elite tier, membership in Clube Azul Fidelidade. We are confident that this proprietary system offers more flexibility than those of our main competitors, therefore allowing us to create promotions, stimulate cross-sell of other Azul Fidelidade products, and more accurately price redemptions to maximize profitability. Azul S.A. 63 In an effort to maximize the value creation potential of Azul Fidelidade, we have been managing the program through a dedicated team since mid-2015. On a standalone basis, Azul Fidelidade’s gross billings ex-airline totaled R$3,644.0 million in the year ended in December 31, 2025. Given the number of exclusive destinations we operate, our network strength, and the expected growth of passenger air travel, credit card penetration and usage and member loyalty in Brazil, we believe that Azul Fidelidade is a strategic business for us. As Azul Fidelidade is our wholly-owned subsidiary, all of the cash flows generated by this high-growth, high-margin business accrue to our shareholders in a tax-efficient manner. We plan to continue investing in Azul Fidelidade’s expansion and evaluating opportunities to unlock value for this strategic asset. Continue to Increase Ancillary, Cargo and Other Revenue We intend to continue growing our ancillary, cargo and other revenue, by both leveraging our existing products and introducing new ones. We intend to focus on deriving further value from our existing ancillary and other revenue streams, which represented R$51.47 per passenger as of December 31, 2025 and included revenue from bag fees, upgrades, other passenger related fees, cargo services, sales of advertising space in our various customer-facing formats, and commissions on travel insurance sales. As a result of the introduction of larger next-generation aircraft to our fleet, we expect to have more seat availability for our Azul Fidelidade loyalty program and our Azul Viagens travel package business as well as additional cargo capacity. Other revenue streams are expected to be mostly driven by our logistics solutions business, Azul Cargo. In 2025, Azul Cargo net revenues increased by 12.9% when compared to 2024, reaching R$1.3 billion, mainly due an increase in international cargo revenue and the expansion of our diversified customer base with retailers, manufacturers, and e-commerce operators in Brazil. We ended 2025 with a 25.1% share of cargo volume transported in Brazil, resulting from our unique network and the capillarity support it provides to our cargo business. In addition, we intend to continue growing our ancillary services and other revenue streams, including Azul Viagens, our travel package business. Continue to Establish and Extend Strategic Partnerships As of December 31, 2025, we had codeshare agreements with United, TAP, JetBlue, Turkish Airlines, Ethiopian Airlines, Emirates, Air Canada, Copa Airlines, ITA Airways, Avianca Colombia and Air Europa as well as 31 interline agreements with a number of other international airlines, including Etihad Airways, Lufthansa, Swiss and Aerolineas Argentinas, allowing us to handle passengers traveling on itineraries that require multiple flights on multiple airlines, thereby widening our network. As part of our plans to expand globally, we have established strategic partnerships with United and TAP. United is a Strategic Investor and a fundamental party in the transactions contemplated by the Voluntary Reorganization. As of the date hereof, United holds, directly and indirectly, 8.7% of our common shares outstanding on the date of this annual report. See “Item 4.B. Business Overview—Voluntary Reorganization.” As part of TAP’s privatization process in 2016, a consortium of private investors (including our founder) acquired a stake in TAP, and we invested €90 million in exchange for bonds issued by a TAP bonds issuer that were convertible into a 41.25% economic interest in TAP. On March 14, 2019, we further acquired a fully-diluted economic stake of approximately 6.1% in TAP from Hainan Airlines (Hong Kong) Co. Limited for a purchase price of US$25 million. On August 10, 2020, as informed at TAP’s extraordinary shareholders’ meeting, in light of the crisis caused by the COVID-19 pandemic, the Portuguese government negotiated a €1.2 billion aid package for TAP with the European Commission, conditioned upon, among other factors, the elimination of the right to convert the senior bonds into equity so that they would not be diluted by the Portuguese government’s financial contribution. On October 2, 2020, we concluded the sale of our equity participation in TAP as part of the restructuring effort led by the Portuguese government, raising approximately R$70 million in cash. Notwithstanding the foregoing, we continue to maintain commercial partnerships with TAP and United through our interline and codeshare agreements. As a result of our existing interline and codeshare agreements with United and TAP, our customers have access to more than 400 additional destinations worldwide. 64 Azul S.A. We view these and possible future relationships with other airlines as strategic ways of allowing us to expand our network with connectivity throughout the United States, Europe and Asia without having to commit the full resources on our own. We believe that our existing and future customer base are increasingly taking advantage of the ability to fly internationally, and we aim to be able to offer our Brazilian customers a seamless ability to do so, whether by purchasing tickets on partner airlines on our website or through connected and complimentary schedules facilitating onward travel outside of Brazil. In addition to facilitating a more global network for us through these partnerships, we are exploring a variety of cooperative arrangements, including additional interline agreements, code-sharing, access to partner airlines’ frequent flyer programs and possible cobranding efforts. We believe that our strategic partnerships with United and TAP provide our Azul Fidelidade members with a broad range of attractive redemption options and enhance the overall value proposition of our loyalty program. We also see opportunities to leverage these relationships to facilitate greater operating efficiencies by utilizing partner expertise in maintenance, cargo transport and even possible pilot and crew training and redeployment, as well as redeployment of redundant or unneeded aircraft. We continuously explore opportunities with our partners to determine the most effective and beneficial ways to leverage these relationships for all parties. We view our partnerships as critical to our global connectivity but also as a way to addressing macroeconomic pressures in Brazil. By working with our partners, we believe we have and can continue to adapt to changing economic conditions and do so swiftly in areas involving our fleet, crews and operating expenses. We expect to continue evaluating strategic partnership opportunities, including investments and acquisitions, that allow us to improve our network, offer more attractive benefits to our Azul Fidelidade members, enhance our brand and build loyalty and revenue. Description of Our Products and Services Our principal product is the scheduled air transportation of customers, which generates passenger ticket and non-ticket revenue. In addition, we generate revenue through our wholly-owned Azul Fidelidade loyalty program, our cargo transportation operations, and our travel and tourism operations. Scheduled Air Transportation We target business travelers by offering convenient and frequent service to numerous destinations, 85 of which we served exclusively as of December 31, 2025. We also target leisure travelers with our extensive route network and our segmented pricing model, offering low fares for advance purchases. In connection with our scheduled air transportation services, we generate passenger ticket revenue and other revenue, such as passenger related ancillary revenue, cargo revenue through our Azul Cargo business, and the sale of travel packages, through our Azul Viagens business. Passenger Revenue We believe our extensive network and our range of product offerings allow us to attract high-yield business travelers, who we believe make up the largest component of our ticket revenue and customers. According to ABRACORP, we held a 31.5% share in terms of Brazilian business-focused travel agency revenue and our average business-focused travel agency ticket price was the highest compared to our main competitors in the year ended December 31, 2025. We attribute this to our network connectivity, which provides business passengers with several connection options allowing them to more easily and conveniently reach their destinations, as well as to the fact that we are the only player in certain markets that are attractive to business travelers. Leisure travelers, by contrast, are typically more price sensitive than business travelers, but tend to be more flexible regarding flight schedules. Passenger revenue also includes revenue derived from the sale of Azul Fidelidade points to third parties. For more information, see “Item 4.B. Business Overview—Azul Fidelidade Loyalty Program.” In the year ended December 31, 2025, passenger revenue was R$19,997.7 million, representing 92.4% of our net revenue. Ancillary items such as bags, upgrades, itinerary changes and other air travel-related fees are recognized in passenger revenue. Azul S.A. 65 In addition to generating passenger revenue derived from the sale of tickets and Azul Fidelidade points, we generate ancillary revenue by selling travel insurance and by charging fees for certain services, such as checked baggage fees, cancellation fees, change fees, no-show fees, call center booking fees, online booking fees. Other Revenue Other revenue streams are expected to be mostly driven by our logistics solutions business, Azul Cargo. In 2025, Azul Cargo net revenues increased by 12.9%, reaching R$1.3 billion, due to the business growth in the fourth quarter, expanding our diversified customer base with retailers, manufacturers, and e-commerce operators in Brazil. We ended 2025 with a 25.1% share of cargo volume transported in Brazil. We replaced two 737-400 freighter aircraft with two Airbus A321 freighters. We offer cargo transportation services to over 5,100 cities and communities, more than 2,300 of which we can deliver to in 48 hours, and we have around 350 cargo stores across Brazil that offer our cargo transportation services. We transport cargo by air and hire independent third parties to transport and deliver cargo to its final destination by ground transportation. While we are liable to our customers for proper cargo delivery, our agreements with such independent third parties provide for our right of recourse against them if any losses occur during the ground transportation. We also derive revenue streams from our travel and tourism operations, Azul Viagens, which combine airfare, ground transportation and lodging options. The travel packages we offer are either pre-built or flexible and customized and can be purchased through our website or, as of December 31, 2025, at one of the 6,765 travel agencies that offer our travel products or at one of our more than 129 free-standing stores. Other revenue was R$1.6 billion in 2025, representing 7.6% of our net revenue, respectively. Non-passenger related items including cargo, travel packages, and revenue from aircraft subleases are recognized under other revenue. 66 Azul S.A. Route Network We offer flights to every region in Brazil and to select international destinations. The map below shows the destinations and routes we currently serve. As of December 31, 2025, we served 160 destinations, including 144 cities across every region in Brazil, the largest number of destinations offered by a Brazilian airline and our flights represented 35.5% of the total domestic departures in the country, according to ANAC. Our main hub is in Campinas at Viracopos airport, approximately 100 kilometers (62 miles) from the city of São Paulo. From Viracopos airport, we provided non-stop service to 72 Brazilian cities accounting for 96% of that airport’s 140 daily domestic departures as of December 31, 2025. The increase in flights from Campinas, our main hub, illustrates the success of our demand stimulation model. Throughout Brazil, our Campinas hub offers superior connectivity for passenger connections, with the highest number of non-stop services of any airport in the country, for the year ended December 31, 2025. As a result of our focus on underserved markets, we have been able to establish a successful platform that has seen a significant increase in demand at Viracopos airport over the last 15 years. Our second largest hub is located at Belo Horizonte’s main airport, where we served 61 non-stop domestic destinations and had a 74% share of that airport’s 113 daily departures as of December 31, 2025. This hub serves Belo Horizonte, which is the capital city of Minas Gerais, the third wealthiest state in Brazil according to IBGE. Azul S.A. 67 We also have a hub in Recife, which serves 42 non-stop destinations. We had a 70% share of Recife’s airport’s 66 daily domestic departures as of December 31, 2025. Recife is one of the largest cities in the Northeast of Brazil, and this hub allows us to increase flight connectivity within the Northeast region to other parts of Brazil. Our diversified network allows us to connect not only our main hubs but also strategic airports throughout Brazil located in, among other places, São Paulo (Guarulhos and Congonhas airports), Rio de Janeiro (Santos Dumont and Galeão airports), Porto Alegre, Cuiabá, Belém and Manaus. Domestic Routes The table below shows the number of non-stop domestic destinations offered by us and by our main competitors at select airports as of December 31, 2025: Non-stop Domestic Destinations by Airport (December 31, 2025) Airport Azul Gol Latam Azul Ranking Campinas 72 3 1 1 Belo Horizonte 61 8 5 1 Recife 42 6 6 1 Rio de Janeiro (SDU+GIG) 11 30 22 3 Cuiabá 18 5 3 1 Porto Alegre 11 6 7 1 Curitiba 20 6 6 1 São Paulo (CGH) 18 42 30 3 São Paulo (GRU) 10 38 54 3 Belém 21 8 6 1 Source: ANAC and Azul The table below shows our top ten cities served by average number of departures per day as of December 31, 2025. Airport Azul Average Number of Departures per Day Azul Leadership Position (departures) Campinas 140 1 Belo Horizonte (Confins) 113 1 Recife 66 1 Rio de Janeiro (Santos Dumont+GIG) 43 3 Curitiba 32 1 Porto Alegre 28 1 Cuiabá 15 1 São Paulo (Guarulhos) 26 3 São Paulo (Congonhas) 37 3 Belém 25 1 Source: Azul Our focus on providing a large route network with convenient service has enabled us to become the market leader in 115 cities and 88% of our routes in terms of departures, being the only operating airline in 85 cities and the leader on 88% of our routes as of December 31, 2025. By comparison, as of December 31, 2025, Gol and LATAM were leading carriers in 13 and 21 cities in Brazil, respectively. In addition, the routes in which we hold a leadership position represent approximately 82% of our total ASKs and 86% of our total passenger revenue. 68 Azul S.A. The table below shows the number of cities we serve and the number of cities in which we are a market leader in terms of departures by cities served in comparison with Gol and LATAM, as of December 31, 2025. Azul Route Position (Domestic, Dec 2025) Domestic Cities Served Cities where #1* Number of Daily Departures Azul 144 115 819 Gol 65 12 626 Latam 58 22 749 Source: ANAC and Azul * Considers leadership in terms of number of departures Our extensive network coverage allows us to offer more itineraries and connections than our competitors, which serve a lower number of destinations. We believe our optimized fleet is uniquely tailored to the Brazilian market and to our growth strategy, allowing us to serve cities with different demographics ranging from large capitals to smaller cities throughout Brazil. For more information on our fleet, see “Item 4.B. Business Overview—Fleet.” As a result, we believe we effectively match capacity to demand by offering more convenient and frequent non-stop service than Gol and LATAM, which mainly fly larger aircraft within Brazil, and we believe are limited to serving only a subset of cities profitably due to infrastructure restrictions that do not affect certain of our aircraft. We believe we are effective in adjusting our capacity to meet demand by timing aircraft deliveries and maintenance schedules accordingly. We intend to continue to grow sustainably and profitably by further adding new domestic and international destinations, interconnecting the cities that we already serve and increasing frequency in existing markets. International Routes Our international expansion strategy is based on connecting our strong presence in various cities in Brazil through our hubs in Campinas, Belo Horizonte and Recife with our current long distance international destinations, including Fort Lauderdale, Orlando, Lisbon, Porto and Madrid, as well as selected destinations in South America. In addition, we serve other international destinations according to seasonal demand. We believe our main hub in Campinas, which offers non-stop flights to 70 domestic destinations and is the largest domestic hub in South America in terms of destinations served is uniquely suited to serve our international routes due to our focused domestic route structure, both in terms of passengers and overall connectivity throughout Brazil. Once in Campinas, our international passengers are able to take advantage of our full domestic route structure to connect to every region in Brazil. In the United States, we already serve Fort Lauderdale and Orlando, Florida from Viracopos, Belo Horizonte and Recife. To enhance our connectivity outside of Brazil, we have entered into codeshare and frequent flyer reciprocity agreements with United and TAP and other airlines and 31 interline agreements with several other international carriers. For more information on our codeshare arrangements and strategic partnerships, see “Item 4.B. Business Overview—Strategic Partnerships, Alliances and Commercial Agreements.” In March 2016, we established a strategic partnership with TAP, further supporting our plans to expand globally. For more information regarding our investment in TAP, see “Item 4.B. Business Overview—Strategic Partnerships, Alliances and Commercial Agreements—TAP.” As a result of this strategic partnership, in June 2016, we successfully launched a non-stop codeshare flight between our and TAP’s main hubs, Campinas and Lisbon, respectively. As of December 31, 2025, TAP served over 80 destinations, including more than 10 destinations in Brazil, and therefore was the number one European carrier serving Brazil in terms of number of seats and flights. We believe our flight to Lisbon enhances our passenger connectivity between Brazil and Europe and allows our business and leisure passengers to take advantage of TAP’s network to access key destinations in Europe. Furthermore, we expect to continue taking advantage of our network connectivity by adding select destinations in South America to be served by our narrow-body aircraft. Azul S.A. 69 Customer Service We believe that a high-quality product and exceptional service significantly enhance customer loyalty and brand recognition through word-of-mouth, as satisfied customers communicate their positive experience to others. Based on this principle, we have built a strong company culture focused on customer service that serves as the foundation of a differentiated travel experience. According to surveys we have conducted, as of December 31, 2025, 71% of our customers would recommend or strongly recommend Azul to a friend or relative. In addition, we use NPS (Net Promoter Score) to measure customer satisfaction, and in 2025 our score totaled 38.5. Our service features include advance seat assignment, leather seats, individual entertainment screens with free live television at every seat in all our jets, extensive legroom with a pitch of 30 inches or more, complimentary beverage and snack service, free bus service to key airports we serve (including between the city of São Paulo and Viracopos airport). We also offer Wi-Fi services in most of our A320 neo and E2 fleet. Crewmembers Our Crewmembers are specifically trained to implement our values in their interactions with our customers, particularly through being service-oriented and taking individual initiatives, focusing on providing customers with a travel experience that we believe is unique among Brazilian airlines. We strive to instill our “customer comes first” and “can do” approach in all our Crewmembers, which is reflective of how we manage our business. Product Features We endeavor to provide our passengers with a differentiated travel experience focused on convenience and comfort. To serve this goal, we offer customers the following features: •advance seat assignment; •leather seats; •individual entertainment screens with free live television at every seat in all our jets; •extensive legroom with a pitch of 30 inches or more; •complimentary beverage and snack service on domestic flights; •free bus service to certain key airports we serve (including between the city of São Paulo and Viracopos airport); and •four-seat “SkySofas,” offering full-length beds in certain economy class cabins. On December 31, 2025, our bus transportation services between São Paulo and Viracopos airport had more than seven departures daily distributed through a single bus line leaving Congonhas airport in São Paulo, transporting an average of more than 8,000 passengers monthly. 70 Azul S.A. On-Time Performance Our commitment to operating an on-time airline with a high-quality customer experience, which we believe is unique among Brazilian airlines, has resulted in us been ranked among the top ten most on-time low-cost carriers in the world since 2016. The following table sets forth certain performance-related customer service measures for the periods indicated: For the year ended December 31, 2025 2024 2023 On-Time Performance(1) 85.2 % 82.4 % 85.7 % Completion Rate(2) 99.1 % 98.5 % 98.6 % Mishandled Bag Rates(3) 5.13 4.99 3.83 Source: Cirium and Azul (1) Percentage of our scheduled flights that were operated by us and that arrived on time (within 15 minutes). (2) Percentage of our scheduled flights that were operated by us, whether or not delayed (i.e., not cancelled). (3) Number of bags mishandled per 1,000 passengers. Strategic Partnerships, Alliances and Commercial Agreements As part of our plans to expand globally, we have established strategic partnerships that allow us to improve our overall network, expand our international connectivity, offer more attractive benefits to our Azul Fidelidade customers, enhance our brand and build customer loyalty and revenue. These strategic partnerships provide for expanded cooperation through commercial cooperation agreements, codeshare and interline arrangements, as well as marketing initiatives, loyalty program reciprocity or benefit sharing, enhanced service levels at airports and equity and debt investments in us by our partners, or by us in our partners. Our commercial cooperation agreements establish broad frameworks for cooperation in such areas as code-sharing, interlining, marketing, service and aircraft and engine maintenance, among other areas. Interline agreements are entered into among individual airlines to handle passengers traveling on itineraries that require multiple airlines, allowing passengers to utilize a single ticket and to check their baggage through to their final destination. Code-share agreements differ from interline arrangements in that they allow airlines to identify a flight with an airline’s code even though the flight is operated by another airline, which enhances marketing and customer recognition. We have entered into a commercial cooperation, a codeshare and frequent flyer reciprocity agreements with United and TAP and have entered into another nine codeshare and 31 interline agreements with several other international carriers, including Etihad Airways, Lufthansa, Swiss and Aerolíneas Argentinas. We believe these strategic relationships allow us to increase our load factor on flights departing from Brazilian airports operated by our partners and expand our brand exposure internationally for our Brazil-based and international customers. Our codeshare agreements with United, TAP, JetBlue, Turkish Airlines, Ethiopian Airlines, Emirates, Air Canada, Copa Airlines, ITA Airways, Avianca Colombia and Air Europa allow us to sell flights to the main destinations served by these carriers, contributing to the growth of our international operations and offering our passengers additional connectivity beyond Brazil. Furthermore, our relationships with other carriers allow us to expand our cargo operations by offering these services beyond the locations served by our own aircraft. As a result of these arrangements and relationships, our customers have access to more than 400 additional destinations worldwide. We believe that our strategic relationships with our partner airlines provide our Azul Fidelidade members with a broad range of attractive redemption options and allow us to leverage our Azul Fidelidade program beyond our own network. We continue exploring joint ventures and other arrangements with our strategic partners to determine the most effective and beneficial ways to expand our business and increase profitability through these relationships. Azul S.A. 71 United Our alliance with United enhances the reach of our network and creates additional connecting traffic, as both we and United cross-sell each other’s flights on our websites. This arrangement provides customers flying on both airlines with a seamless reservation and ticketing process, including boarding pass and baggage check-in to their final or any other destination. United is a principal member of StarAlliance, but Azul currently has no plans to join such alliance. In addition, United is a Strategic Investor and a fundamental party in the transactions contemplated by the Voluntary Reorganization. As of the date hereof, United holds, directly and indirectly, 8.7% of our common shares outstanding on the date of this annual report. See “Item 4.B. Business Overview—Voluntary Reorganization.” We expect that our overall relationship with United, including the code-sharing, commercial and other arrangements that are either in place or being discussed by us, will increase international travel by Azul customers to the United States and other international destinations that we do not serve but which are served by United. We also expect that such relationship will increase traffic of United customers to and across Brazil via our network of domestic locations beyond the limited airports served by United in Brazil. TAP TAP is the national carrier of Portugal and is a leading carrier between Europe and Brazil. We have had a long relationship with TAP since our inception. TAP was wholly-owned and operated by the Portuguese government until June 2015, when it was privatized. At that time, Atlantic Gateway, SPGS, Lda. (an entity that was jointly owned by our founder, Hainan and another European investor) owned 45% of TAP’s voting shares, employees held a 5% interest, and the Portuguese government had an ownership of 50% of the voting shares. On March 14, 2019, we acquired a 6.1% economic stake in TAP for US$25 million. In connection with TAP’s privatization process, we invested €90 million in 7.5% bonds due March 2026, secured by an interest in TAP’s loyalty program, convertible at our option into newly issued TAP equity securities without any further payment by us. On July 3, 2020, TAP announced an agreement with the Portuguese government in exchange for financial support in the amount of €1.2 billion. The agreement consists of the sale of Azul's indirect stake in TAP of 6.1%, for approximately R$65 million, and elimination of the right to convert the TAP Bonds held by the Company in an aggregate principal amount of €90 million maturing in 2026, according to the terms and conditions of the transaction, which was approved by Azul shareholders at an extraordinary general meeting held on August 10, 2020. All other contractual conditions of the senior bonds were required to be maintained, including the status of senior creditor, annual interest rate of 7.5%, the right to the constitution of guarantees agreed on the respective terms and conditions, such as TAP's loyalty program. As of the date hereof, the TAP Bonds are unsecured. TwoFlex On February 21, 2020, our wholly-owned subsidiary ALAB and TwoFlex announced that they have entered into a certain Quota Purchase Agreement under which Azul agreed to acquire the Brazilian regional carrier TwoFlex for the total purchase price of R$123 million. TwoFlex, rebranded “Azul Conecta” is a domestic airline based in Jundiaí, Brazil, founded in 2013, and currently offers regular passenger and cargo service to more than 70 destinations in Brazil, of which only three regional destinations were previously served by Azul. Azul Conecta’s fleet is composed of 23 owned Cessna Caravan aircraft, a regional turboprop with a capacity of 9 passengers. The transaction was approved without restrictions by the Administrative Council for Economic Defense (CADE) on March 27, 2020 and on May 14, 2020, Azul announced the completion of the acquisition process of TwoFlex and the purchase price payments were completed in 2022. 72 Azul S.A. Revenue Management Our revenue management model is focused on effective pricing and yield management, which are closely linked to our route planning, and our sales and distribution methods. The fares and the number of seats we offer at each fare are determined by our internally developed, proprietary, proactive yield management system and are based on a continuous process of analysis and forecasting. Past booking history, load factors, seasonality, the effects of competition and current booking trends are used to forecast demand. Current fares and knowledge of upcoming events at destinations that will affect traffic volumes are also included in our forecasting model to arrive at optimal seat allocations for our fares on specific routes. We use a combination of approaches, taking into account yields and flight load factors, depending on the characteristics of the markets served, to design a strategy to achieve the maximum revenue by balancing the average fare charged against the corresponding effect on our load factors. Our model of fare segmentation seeks to maximize revenue per seat through dynamic inventory adjustment depending on demand. By increasing price segmentation, we are able to ensure that we continue to attract and retain high-yield business traffic including last-minute seat availability for late-booking business travelers, which is integral to our revenue management, as well as leisure travelers who usually pay lower fares for tickets purchased in advance. Utilizing the appropriate aircraft for a specific market enables us to better match capacity to demand. As a result, we believe we are able to enter new markets, cater to underserved destinations with high growth potential and provide greater flight frequency than our main competitors. With this model, we optimize revenue through dynamic fare segmentation, targeting both business travelers, who appreciate the convenience of our frequent non-stop service, and cost conscious leisure travelers, many of whom are first-time or low-frequency flyers, and for whom we offer low fares to stimulate air travel and encourage advance purchases. We utilize a proprietary yield management system that is key to our strategy of optimizing yield through dynamic fare segmentation and demand stimulation. We target both business travelers, to whom we offer convenient flight options, and cost-conscious leisure travelers, to whom we offer low fares to stimulate air travel and to encourage advanced purchases. We believe our superior network and product offering allows us to attract high-yield and frequent business travelers. Azul Fidelidade Loyalty Program Our wholly-owned loyalty program Azul Fidelidade, which was launched in May 2009, aims to enhance customer loyalty and brand recognition. Azul Fidelidade had more than 20 million members as of December 31, 2025. Azul Fidelidade members earn at least one point and up to four points per each real spent in tickets on Azul. Redemptions of points for one-way tickets start at 3,000 points and go up for more expensive flights. Azul Fidelidade also offers a points plus cash option, in which tickets can be purchased using a combination of cash and Azul Fidelidade points. Periodically, as a promotional tool, we may offer awards for fewer than 3,000 points. We believe that with a system that awards at least as many points as Brazilian reais spent, customers perceive they are also receiving a higher reward for their purchases. At the same time, we believe that the variable amount of points required to redeem awards gives us flexibility in exercising discretion over the costs we incur in relation to these redemptions. We offer last-seat availability to Azul Fidelidade members and have significant flexibility to price redemptions in a way that is competitive with other loyalty programs, thus helping to maximize Azul Fidelidade’s attractiveness. We actively manage the price of our redemptions, offering very competitive fares in points when seat availability is high and optimizing margins in peak, high-demand flights. We have also developed an exclusive, proprietary pricing system, which provides ample flexibility to price redemptions within a given flight. This allows us to sell seats using several combinations of points and money. It also allows us to customize pricing using a number of different factors, such as a member’s elite tier, membership in Clube Azul Fidelidade. We are confident that this proprietary system offers more flexibility than those of our main competitors, therefore allowing us to create promotions, stimulate cross-sell of other Azul Fidelidade products, and more accurately price redemptions to maximize profitability. Azul S.A. 73 Most Azul Fidelidade points expire two years after issuance. Frequent flyers achieve “Azul Fidelidade Topázio” (Topaz) status when they accumulate 6,000 qualifying points or 6 segments, “Azul Fidelidade Safira” (Sapphire) status once they accumulate 10,000 qualifying points or 10 segments, “Azul Fidelidade Diamante” (Diamond) status once they accumulate 12,000 qualifying points and 12 segments during a given calendar year or spend R$25 thousand on air fares or other air related expenses such as upgrades and additional baggage, pet fees and seat assignment. There is also the newest tier “Azul Fidelidade Diamante Unique” (Unique Diamond) that can be achieved by accumulating 26,000 qualifying points and 26 segments or R$50 thousand on air fares or other air related expenses. Topázio, Safira, Diamante or Diamante Unique status is valid during the rest of the year of qualification and the entire following year, and provides the following benefits, among others: bonus points, check-in privileges at major airports like Viracopos, Santos Dumont, Confins, Brasília and others, priority boarding, higher baggage allowances, and dedicated telephone and e-mail services. We have also created a new group of Azul Fidelidade customers by invite only, Azul One, through which the members have access to exclusive benefits, differentiated customer service and customized experiences. Invitations will be made at the Company’s discretion, once a year based on the customer’s flight history and frequency, their preference for premium products and other aspects of their relationship with Azul. Since the program’s inception, Azul Fidelidade members have generally demonstrated a willingness to pay higher average fares than those paid by non-members. We believe this is in part because of high customer satisfaction, increased passenger loyalty and because many of our business travelers, who frequently purchase more expensive, last-minute tickets, are typically also Azul Fidelidade members. Our current Azul Fidelidade business partners, which offer Azul Fidelidade members options to accrue and redeem points, include financial institutions such as Itaú, Santander, Livelo (Banco do Brasil’s and Bradesco’s loyalty joint venture), Inter, Caixa, Nubank, BTG Pactual and C6 Bank, and retailers (Via Varejo, Magazine Luiza, KVM and Satelital Brazil), and travel partners (including All Accor Cross Rewards as an exclusive partner in Latin America, Airport Park and Assist Card). In September 2014, we also launched an Azul-branded credit card in partnership with Banco Itaucard S.A. In addition, in December 2015, we launched Clube Azul Fidelidade, an innovative subscription-based product through which members pay a fixed recurring amount per month in exchange for Azul Fidelidade points, access to promotions and other benefits. We also offer members the ability to buy points to complete the amount required for a reward, or pay a fee to renew expired points or transfer points to a different member’s account. Finally, we believe that our international flights and loyalty program partnerships with international carriers, including United, TAP, Emirates and Copa provide our Azul Fidelidade members with a broad range of attractive redemption options. To maximize the value creation potential of Azul Fidelidade, we have been managing the program through a separate, dedicated team since mid-2015. On a standalone basis, Azul Fidelidade’s gross billings excluding the airline totaled R$3,644 million for the year ended December 31, 2025, R$3,427 million for the year ended December 31, 2024 and R$2,692 million for the year ended December 31, 2023. We believe Azul Fidelidade has significant growth potential. Given the number of exclusive destinations we operate, our network strength, the expected growth of passenger air travel, credit card penetration and usage and member loyalty in Brazil, we believe that Azul Fidelidade is a key strategic asset for us. We plan to continue investing in Azul Fidelidade’s expansion and evaluating opportunities to unlock value for this strategic asset. A sample of the key operating statistics demonstrating Azul Fidelidade’s growth are set forth below: 2025 2024 2023 Gross billings ex-airline (in millions of reais) 3,644 3,427 2,692 Total members (in millions) 20.1 18.2 16.6 Total partners 80 102 103 74 Azul S.A. Marketing A core pillar of our strategy is celebrating and investing in Brazilian culture. Through sponsorship of major cultural events such as the Festival Folclórico de Parintins (city of Parintins’ folk festival), São João festivities and Carnival, we actively support traditions that define the country’s identity. These initiatives position us not only as an airline, but as a company that contributes to Brazil’s development and cultural vitality. We also introduced a dedicated campaign for our loyalty program Azul Fidelidade, designed to educate customers on how to better use their points and maximize benefits. By simplifying communication, encouraging smarter redemption and increasing engagement, we strengthened long-term relationships and expanded customer loyalty. In addition, our strategic partnership with Disney, launched in 2021, created a unique experience for our customers through our “magical fleet,” featuring aircraft inspired by beloved characters such as Mickey, Minnie, Donald, Daisy and Goofy. Beyond brand visibility, this collaboration significantly strengthened our tourism ecosystem and positioned our tour operator Azul Viagens as one of the largest sellers of Disney vacation packages in Brazil. Across all initiatives, we pursue high marketing impact with efficiency, leveraging digital platforms, onboard media, experiential activations and strategic partnerships. Together, these strategies position our brand as the leader in emotional connection with people - combining national pride, world-class collaborations and meaningful customer engagement to build lasting relationships. Sales and Distribution We currently sell our products through six primary distribution channels: (i) our website, (ii) our mobile app, (iii) our call center, (iv) airport stations, (v) Azul Viagens freestanding stores, and (vi) third parties such as travel agents, including through their websites. Direct internet bookings by our customers represent our lowest cost distribution channel. We intend to continue working to increase sales through online channels, in particular sales through our website and our mobile app, as these sales are more cost-efficient and involve lower distribution costs than sales through travel agencies. In conjunction with Navitaire, a provider of host reservation services and other ancillary services, including data center implementation services, network configuration and design services, we developed a direct connection to travel agencies using online portals that bypass expensive distribution through GDS, resulting in a considerably lower indirect distribution cost. This allows travel agencies to use common internet programming schemes, which have almost fixed low costs that do not vary by sales, to develop their front end, mobile and internet applications with a direct connection to our reservation system. In connection with sales booked through travel agents, we pay incentive commissions to travel agents who attain our sales targets rather than upfront commissions. We maintain a high-quality call center, staffed solely with our Crewmembers, as we believe that having a high-quality call center is crucial to our culture focused on customer service. We charge a fee for reservations made through our website and call center to offset its operating costs. Fleet As of December 31, 2025, Azul had a passenger operating fleet of 153 aircraft and a passenger contractual fleet of 199 aircraft, with an average aircraft age of 7.2 years excluding Cessna aircraft. Our operating fleet excluding Cessna Caravan aircraft has an average age of 7.2 years, which is significantly younger than the average of our main competitor. We believe operating a young fleet leads to better reliability, greater fuel efficiency and lower maintenance costs. Our Embraer E-Jets seat up to 118 customers, our next-generation Airbus A320neos accommodate 174 passengers and our fuel-efficient ATR aircraft seat 70 customers, while the aircraft used by our two principal competitors in Brazil have between 144 and 220 seats. As of December 31, 2025, the average trip cost of our fleet was R$55,739. Azul S.A. 75 In addition to leveraging the strength of our domestic network and maximizing the growth potential of our loyalty program and cargo operations, in December 2016, we began adding next-generation Airbus A320neo aircraft to our fleet with lower seat and trip costs to serve longer-haul leisure and peak hour focus-city to focus-city service. For example, on long-haul flights such as a flight between Campinas and Salvador, the trip cost flying a next-generation Airbus A320neo is approximately only 5% higher than the trip cost of an E-195. However, as the next-generation Airbus A320neo has 56 more seats than the E-195, its CASK is 29% lower. As a result, by adding next-generation aircraft to our fleet, we expect to maintain market-leading trip costs and to reduce our CASK, both in absolute terms and relative to our main competitors. The following tables set forth the composition of (i) our contractual fleet, which consists of aircraft that are contractually leased or owned by us and; (ii) our operating fleet, which consists of aircraft that are being operated by us, including spare aircraft, for the periods indicated. Total Contractual Fleet Number of seats As of December 31, 2025 2024 2023 2022 2021 2020 2019 Embraer aircraft E-190/195 106-118 40 45 47 55 57 67 70 E-195-E2 136 46 32 20 14 9 9 4 ATR aircraft ATR 72 68-70 42 40 44 44 42 39 33 Airbus aircraft Airbus narrowbody 174-214 64 59 55 52 49 45 41 Airbus widebody 242-298 7 13 12 16 14 13 10 Cessna Caravan 9 26 27 27 27 17 17 — Boeing 737 (Freighter) — 2 2 2 2 2 2 2 Total Contractual Fleet 227 218 207 210 190 192 160 Total Operating Fleet Number of seats As of December 31, 2025 2024 2023 2022 2021 2020 2019 Embraer aircraft E-190/195 106-118 43 30 42 43 47 53 55 E-195-E2 136 18 28 20 14 9 7 4 ATR aircraft ATR 72 68-70 27 32 39 40 33 33 33 Airbus aircraft Airbus narrowbody 174-214 60 58 55 52 47 45 38 Airbus widebody 242-298 5 12 11 12 11 11 10 Cessna Caravan 9 23 23 24 19 17 17 — Boeing 737 (Freighter) — 2 2 — 2 2 2 2 Total Operating Fleet 178 185 191 182 166 168 142 As of December 31, 2025, 39 aircraft of our fleet were owned or debt-financed and 188 were financed under leases. Our owned aircraft and debt-financed aircraft were financed through credit facilities with different creditors, almost all of which was denominated in U.S. dollars as of December 31, 2025. Based on our current firm orders, we have contractually assumed the commitment to acquire 61 aircraft, 52 directly from manufactures and nine from lessors. 76 Azul S.A. Embraer We were the first and currently are the only airline in Brazil to operate Embraer E-Jets. We believe that our successful launch of the Embraer E-Jets in the Brazilian market is a result of the significant experience of most of our senior management team, who were trained in operating and maintaining E-Jet aircraft in the United States. We believe this experience provides us with a significant advantage over any competitor that may intend to reproduce our model. We have a strong and close partnership with Embraer, which is headquartered in São José dos Campos, São Paulo, approximately 100 km from our headquarters in the city of Barueri, state of São Paulo, and approximately 150 km from our main hub in Campinas, São Paulo. Our Embraer E-Jets have a two-by-two cabin layout with no middle seats, and our aircraft are configured to offer standard seats with 31 inches of legroom and premium seats called “Espaço Azul” with 34 inches of legroom. Our over-wing exit seats (four per aircraft) offer a spacious 39 inches of legroom. Our first generation of Embraer E-Jets (the “E1s”) are fuel-efficient, with fuel consumption averaging approximately 20% less than a Boeing 737 series, according to Embraer, and thus offering significantly lower trip costs than larger narrow-body aircraft. Embraer E-Jets continue to feature state-of the-art fly-by-wire technology, which continues to provide operating safety while reducing pilot workload and fuel consumption. The new generation of Embraer E-Jets (the “E2s”) have 18 additional seats, accommodating up to 136 passengers, and offering 26% lower cost per seat and 14% lower trip cost compared to the E1s. ATR We are one of the largest ATR operators in the world and ATR is the world’s largest manufacturer of 50-to-70-seat turboprop aircraft. ATR turboprop aircraft provide significantly lower operating costs than jets, with fuel consumption averaging approximately 45% per trip less than a comparably sized jet. The ATR 72-600 is the newest member of the ATR family known for its high efficiency, dispatch reliability and low fuel burn. It features a new glass cockpit, communications and flight management system. Like Embraer E-Jets, ATR aircraft have a two-by-two layout with no middle seats, and our aircraft are configured to offer 30 inches of legroom, which is comparable to our Embraer E-Jets. We began operating ATR aircraft in March 2011 for two strategic purposes: to serve short-haul direct routes between smaller destinations where jet aircraft would be less profitable, and to feed customer traffic from secondary markets into our main hubs. As of December 31, 2025, we had 27 ATRs in our existing network. Airbus As part of our strategy to maintain a young and efficient fleet, we expect to progressively add next-generation Airbus 320neo family aircraft to our fleet up to 2029. The next-generation Airbus A320neo family replaces the current A320ceo family, featuring a new engine option and other improvements such as aerodynamic refinements, large curved winglets (sharklets), weight savings, and a rearranged cabin that accommodates up to 174 passengers with larger luggage spaces, and an improved air purification system. Our A320neos are equipped with CFM International LEAP-1A engines and have approximately 15% less fuel consumption and less noise production when compared to the A320ceos, as well as an increase in range of approximately 500 nautical miles. We began operating the Airbus A330-200 aircraft (the “A330ceo”), configured up to 272 seats, in December 2014, and currently serving Fort Lauderdale, Orlando, Lisbon, Porto and Madrid with these aircraft. According to Airbus, the A330 aircraft delivers better economics than competing aircraft, meets higher environmental standards, and provides greater passenger comfort. We also have Airbus A330-900neo aircraft (the “A330neo”). This aircraft comes with 298 seats in a high-density configuration. The cabin interior is divided into 34 business class, 108 “Economy Extra,” and 156 economy seats. The A330neo has the most advanced passenger cabin today dubbed “Air Space by Airbus,” bringing together an enhanced experience for passengers and optimum performance based on comfort, ambience, service and design. Moreover, the A330neo reduces fuel consumption by 14% per seat compared to the A330ceo, making it the most cost-efficient, medium range widebody aircraft in the market. We expect to add next-generation E2 aircraft replacing older generation aircraft, bringing much more comfort to our customers and more efficiency in terms of fuel consumption and CO₂ emission, resulting in a reduction in the cost per seat and helping us to achieve carbon neutrality by 2045. Azul S.A. 77 Fuel Fuel costs are our largest operating expense. Fuel accounted for 33.0%, 34.6% and 34.9% of our total operating expenses for the years ended December 31, 2025, 2024 and 2023, respectively. Aircraft fuel prices are composed of a variable and a fixed component. The variable component is set by the refinery and reflects international price fluctuations for oil and the Brazilian real/U.S. dollar exchange rate. This variable component is re-set monthly in the Brazilian market, as opposed to daily in North America and Europe. The fixed component is a spread charged by the supplier and is usually a fixed cost per liter during the term of the contract. We purchase fuel from a number of distributors in Brazil, principally from Raízen Combustíveis Ltda., Air BP Brasil Ltda. and Vibra Energia (formerly BR Distribuidora). All such companies are authorized by the National Petroleum Agency (Agência Nacional do Petróleo), or ANP, to market products derived from oil for aviation throughout Brazil, with whom we have agreements to purchase all of our jet fuel needs in certain locations, usually under long term contracts. For our international flights departing from outside of Brazil, we purchase fuel from local providers. International oil prices, which are denominated in U.S. dollars, are volatile and cannot be predicted with any degree of certainty as they are subject to many global and geopolitical factors. For more information on the fuel-related risks we face, see “Item 3.D. Risk Factors—Risks Relating to our Business and the Brazilian Civil Aviation Industry—Substantial fluctuations in fuel costs or the unavailability of fuel, which we primarily source from a single supplier, could have an adverse effect on us”. Airlines often use West Texas Intermediate, or WTI, crude or heating oil future contracts to protect their exposure to jet fuel prices. In order to protect us against volatile oil prices, we have entered into derivative future contracts in the past and may do so from time to time. We also have the possibility of negotiating customized hedging products directly with fuel distributors, with the purpose of locking in the cost of the jet fuel we will consume in the future, and protect ourselves against any fuel price or exchange rate risk. Moreover, building on our operations team’s significant experience with the E-Jet and Airbus aircrafts, we operate an active fuel conservation program involving reducing taxi times, taxiing using a single engine, and managing the aircraft’s load balance, angle of attack and cruising airspeed for optimal fuel-efficiency. We have a robust program to reduce the auxiliary power unit (APU) utilization during transit time and we are working together with the relevant authorities to optimize the air space to reduce our flown distance. The following chart summarizes our fuel consumption and our fuel costs for the periods indicated. For the Year Ended December 31, 2025 2024 2023 Liters consumed (in thousands) 1,427,847 1,324,982 1,291,297 Aircraft fuel (R$ in thousands) 5,710,291 5,583,503 5,890,485 Average price per liter (R$) 4.00 4.21 4.56 Percent increase (decrease) in price per liter (5.10) % (7.68) % (16.18) % Percent of operating expenses 33.0 % 34.6 % 34.9 % Airports and Other Facilities and Properties Airports Currently, a significant number of Brazil’s public airports are currently managed by INFRAERO, an airport operator wholly-owned by the Brazilian government, or by private concession holders. Brazil’s airline industry has grown significantly over the past years and, as a result, some of Brazil’s airports face significant capacity constraints. 78 Azul S.A. Airlines and service providers may lease areas within federal, state or municipal airports, such as hangars and check-in counters, cargo terminals, ticket counters and back offices, subject to concessions or authorizations granted by the authority that operates the airport – which may be federal, the state, the municipality or a private concession holder, as the case may be. No public bid is required for leases of spaces in passenger terminal, although federal typically conducts processes similar to a public bidding process if there is more than one applicant, for cargo terminals or hangars. In other cases, the use may be granted by a simple authorization or permission issued by the authority that operates the airport. In the case of airports operated by private entities, the use of concession areas is subject to a commercial agreement between the airline and the airport operator. With respect to our international facilities, we have entered into lease agreements or other occupancy agreements directly with the applicable local airport authority on varying terms dependent on prevailing practice at each airport. It is customary in the airline industry to have agreements that automatically renew. Our terminal passenger service facilities of ticket counters, gate space, operations support area and baggage service offices generally have agreement terms ranging from less than one year to five years. These agreements can contain provisions for periodic adjustments of rental rates, landing fees and other charges applicable under the type of lease and the extension of the concession term. Under these agreements, we are responsible for the maintenance, insurance, utilities and certain other facility-related expenses and services. In 2011, the Brazilian government started to grant the operation of certain airports in Brazil by way of concessions following public bids. Between 2011 and 2019, 22 airports have been privatized after bidding procedures, including our three hubs, Viracopos, Confins and Recife airports. The concessions for these airports have terms of between 20 and 30 years. In April 2021, the Brazilian government auctioned off another 22 airports located in the Southern, Mid and Northern regions of the country. Following the concession for the operation of Viracopos airport, our largest hub, in February 2012, a series of new investments for Viracopos airport have been made by Aeroportos Brasil, a private consortium that won the bid to operate Viracopos airport. In April 2016, Aeroportos Brasil transferred all operations to a new passenger terminal, which is approximately six times larger than the old terminal. Total investments at Viracopos airport totaled approximately R$3.0 billion between 2012 and 2016. As a result of the transfer of our operations to the new passenger terminal at Viracopos airport, we signed a “Terminal Transfer Incentive Agreement” with Aeroportos Brasil which established a detailed construction schedule for this new terminal and gave us certain rights to impose penalties in the event of noncompliance. Due to the fact that Aeroportos Brasil has not complied with certain contractual obligations under this agreement, we have retained 40% of the airport landing fees from February 2017 until May 2018. As a result of this retention, Aeroportos Brasil filed a collection action against us, which was settled in May 2018 and, consequently, the retention of airport landing fees was resolved. Pursuant to the settlement agreement, we agreed to finish some certain areas of the construction of the new terminal at Viracopos Airport using the airport landing tariffs retained from Aeroportos Brasil. For more information on this proceeding, see “Item 8.A. Consolidated Statements and Other Financial Information —Legal Proceedings.” On March 19, 2020, Aeroportos Brasil applied to ANAC for the rebidding of Viracopos airport as part of its judicial recovery plan. The Brazilian government authorized the rebidding process on July 17, 2020, and deadlines for completing the licensing process and auction were subsequently extended to July 16, 2024. In April 2021, a consortium named GCA submitted a feasibility study for the new bidding process, which was approved by ANAC and forwarded to the Brazilian Federal Court of Accounts (Tribunal de Contas da União). The process was suspended in early 2022 but resumed in December 2022. In August 2023, Aeroportos Brasil requested to discontinue the rebidding process and retain control of the terminal. The Ministry of Ports and Airports proposed a consensual solution in December 2023, which was initially accepted but discontinued in October 2024 due to lack of agreement on compensation terms. Negotiations resumed with a new deadline of June 2, 2025, as established by the Brazilian Federal Court of Accounts. The rebidding process was not concluded by this deadline, and the Brazilian Federal Court of Accounts subsequently declared the deadline lapsed. As a result, ANAC may resume all proceedings and measures that had been stayed, including potential forfeiture of the concession agreement. As of the date of this annual report, we have no further updates on this matter. Azul S.A. 79 Our second largest hub is Confins airport, the main airport in Belo Horizonte, whose concession was granted to private operators in 2013. In 2016, this concession concluded the construction of a new passenger terminal increasing Confins airport’s capacity to up to 22 million passengers per year. We are the leading carrier at Confins airport with a 74% share of its domestic departures to 61 destinations in 113 domestic daily flights as of December 31, 2025. In July 2014, ANAC enacted a resolution establishing new procedures to allocate slots in airports operating at full capacity. Through such allocation, we received 26 new slots at Congonhas airport. In November 2014, we started operating 13 daily flights from Congonhas airport to some of our most profitable markets including Belo Horizonte, Porto Alegre, and Curitiba, leveraging the connectivity we have in these cities and expanding our flights available to São Paulo passengers. In August 2019 ANAC announced a temporary distribution of 41 slots in Congonhas airport previously operated by Avianca Brasil, of which 15 slots were allocated to us. As a result, we adjusted our flight schedules at Congonhas airport and since September 2019, we started operating a shuttle service between Congonhas and Rio de Janeiro and between Congonhas and Belo Horizonte ceasing to operate flights to Porto Alegre and Curitiba. In 2022, Azul achieved an important advance in its presence in Congonhas. With the new rules for slot distribution defined in Resolution No. 682/2022 and the increased capacity in Congonhas operations, Azul increased its number of slots at this airport from 26 to 84. As a result, Azul started to offer more scheduled flights from Congonhas to important destinations such as Brasília, Porto Alegre, Curitiba, Belo Horizonte, Recife and Rio de Janeiro as of March 26, 2023. We built a hub in Recife to increase flight connectivity within the Northeast region of Brazil. Recife has the largest GDP of Brazil’s Northeast region according to IBGE and is our closest Latin American hub for non-stop flights to both Europe and the United States. Our Recife hub serves 42 destinations. We had a 70% share of Recife’s airport, and 66 daily domestic departures as of December 31, 2025. Our diversified network allows us to connect not only our main hubs but also strategic destinations throughout Brazil such as São Paulo (Guarulhos and Congonhas airports), Rio de Janeiro (Santos Dumont and Galeão airports), Porto Alegre, Cuiabá and Manaus. Other Facilities and Properties Our principal corporate offices and headquarters are located in the city of Barueri, state of São Paulo, where we lease 9,241.43 square meters under three lease agreements that expire in December of 2035. We also lease a 900 square foot office complex in Fort Lauderdale, United States. We also lease four hangars totaling 29,560.64 square meters for our full capacity maintenance center in Belo Horizonte, with lease expirations up to 2035. We also lease a hangar in Manaus totaling 3,133.20 square meters and one in Cuiabá totaling 2,535.71 square meters for line maintenance of E-Jets and ATR with leases expiring in 2028 and an indefinite period, respectively. We also lease a hangar in Campinas totaling 92,219.86 square meters, with the lease expiring in 2042. Our pilot and cabin crew training facility, UniAzul, located at Viracopos Airport has 14,576 square meteres is under a lease that expires in 2027. UniAzul is located less than one mile from Viracopos Airport, our main hub. This facility provides training services to both our own Crewmembers, including pilots, and third parties on a commercial basis. At UniAzul, we train all of our Crewmembers, including pilots, flight attendants and maintenance technicians. As part of our extensive training program at UniAzul, we operate two E-Jet flight simulators, one ATR flight simulator and two A320 flight simulators, which are fully flight capable, a technology that we believe none of our main competitors have. We also provide training and grant access to our on-site flight simulators to third parties, including TAP, Embraer and the Brazilian Air Force. We have plans to expand the training programs offered at UniAzul through partnerships with technical schools and universities. Competition Domestic Airlines in Brazil mainly compete based on routes, fares, flight frequency, capacity, airport presence and operating rights, service reliability, brand awareness, loyalty programs and customer service. Air travel in Brazil historically has been concentrated in a limited number of hubs located in the country's largest cities. 80 Azul S.A. Additionally, we believe that markets with a history of underserved demand, typically located in less populated areas of the country, cannot be profitably served by the larger aircraft in the Boeing 737 and Airbus A320 families—which make up the core fleets of our main competitors—and are better served by the smaller, lower-cost aircraft we operate, such as Embraer E-Jets and ATRs. With the growth of the Brazilian airline sector, we may face increased competition from our main competitors and from charter airlines, as well as new market entrants who lower their fares to attract passengers in some of our markets. The two largest airlines in Brazil in terms of RPK (Revenue Passenger Kilometers) are Gol and LATAM. Both Gol and LATAM operate similar hub-and-spoke networks that require passengers on many of their routes to connect through São Paulo, Rio de Janeiro, or Brasília. The main competitive factors on routes served by more than one airline include: ticket fares, total cost, flight availability, aircraft type, passenger amenities, number of destinations served from a city, customer service, punctuality, reputation and safety record, codeshare agreements and frequent flyer programs. The table below shows the historical market shares on domestic routes based on the number of departures: Domestic Market Share — Number of Departures 2025 2024 2023 Latam 32.8 % 30.5 % 30.0 % Gol 28.5 % 26.1 % 27.4 % Azul 35.5 % 37.0 % 36.2 % Source: ANAC Due to our business model, which is based on stimulating demand in underserved markets, we believe we are less susceptible to the effects of fare competition involving our main competitors that operate out of São Paulo airports. As of December 31, 2025, 16% and 14% of our domestic network overlapped with that of Gol and LATAM, respectively. In Campinas, our main hub, only 3 out of 71 domestic destinations had direct overlap with Gol or LATAM as of December 31, 2025. While Gol, LATAM, or any other airline may enter markets we currently serve exclusively or in which we hold a large share, we believe our comprehensive connectivity allows us to avoid competition in several markets in which we operate, especially from competitors operating larger aircraft like Gol and LATAM, since serving these markets profitably with larger aircraft is more difficult. Before we began operations, Gol and LATAM controlled more than 90% of the Brazilian aviation market. From 2008 to 2015, the market grew significantly, partly due to (i) our entry, which stimulated demand, and (ii) organic market growth, with more people using air travel. As a result, although Gol and LATAM lost market share after our entry, the number of passengers transported by both companies increased after that time. In December 2025, we held a 29.1% share of the domestic RPK market, according to ANAC. The table below shows the number of domestic destinations served by the main Brazilian airlines on the indicated dates: Number of Domestic Destinations Served For the year ended on 31 December 2025 2024 2023 Azul 160 160 160 Gol 65 65 68 LATAM 59 59 53 Azul S.A. 81 In the domestic market, in addition to other airlines, we also compete with other forms of transportation, primarily interstate bus services. Due to the absence of rail transportation in Brazil, bus services have traditionally been the most economical option for long-distance travel for a large portion of the Brazilian population. We believe our low-cost business model has given us the flexibility to price fares in a way that stimulates demand for air travel among passengers who previously traveled long distances primarily by bus. In particular, we believe many of our fares are competitive with the cost of road travel on many of our routes, sometimes comparable to or even cheaper than bus fares to the same destination. Additionally, promotional fares for certain flights during specific periods or when booked in advance directly compete with interstate bus fares on those routes. International We currently are the only carrier in Viracopos airport that offers non-stop service to the United States and Europe. As we expand our international services to select international destinations, our pool of competitors may increase and we may face competition from Brazilian, North American, South American and other foreign airlines that are already established in the international market and that participate in strategic alliances and codeshare arrangements. In addition, non-Brazilian airlines may decide to enter or increase their schedules in the market for routes between Brazil and other international destinations, which would also drive up competition. In 2010, ANAC approved regulations regarding international fares for flights departing from Brazil to the United States and Europe, which gradually removes the previous minimum fares. In 2010, ANAC approved the continuity of bilateral agreements providing for open skies policies with other South American countries, as well as a new open skies policy with the United States. The open skies policy with the United States was approved by the Brazilian National Congress in March 2018. In March 2011, Brazil also signed an open skies agreement with Europe, which was initially expected to come into force in 2014 but still lacks the necessary approvals from the Brazilian executive branch in order to be considered and ratified by the Brazilian National Congress. These new regulations should increase the number of passengers in South America and may enable the expansion of our international services. During 2025, our market share on international operations of Brazilian airlines in routes to/from Brazil based on RPKs: International Market Share—Airline RPK Market Share LATAM 31,826,027,150 65.32 % Azul 10,065,507,436 20.66 % GOL 6,818,237,262 13.99 % Other 11,595,219 0.03 % Total 48,721,367,067 100.0 % Source: ANAC Maintenance Safety is our core value. Aircraft maintenance, repair and overhaul are critical to the safety and comfort of our customers and the optimization of our fleet utilization. Our maintenance policies and procedures are regulated by FAA, EASA and ANAC requirements, and our aircraft maintenance programs are approved by ANAC and are based on manufacturers’ maintenance planning documents and recommendations. We employ our own experienced qualified technicians to perform line maintenance services rather than relying on third-party service providers. All technicians are certified by ANAC and meet stringent qualification requirements. Our maintenance technicians undergo extensive initial and ongoing training provided by UniAzul and by our aircraft and engine manufacturers to ensure the safety and continued airworthiness of our aircraft. Our training programs are all approved by ANAC. We have developed a technical operations organization structure and a Continuous Analysis and Surveillance System, or CASS, aimed at achieving the highest level of safety, airworthiness, customer-worthiness, dependability, quality and cost efficiencies of our aircraft fleet. 82 Azul S.A. With this in mind, we have established an engineering and quality assurance department that oversees the compliance of all airworthiness requirements, and provides oversight of all maintenance activities in accordance with ANAC regulations and our CASS. Our engineering technical services set the standards and specifications for maintaining our aircraft and engines, monitor the performance reliability of the aircraft systems, engine and components, perform root-cause analyses of defects, and forecast long-term and short-term maintenance activities. We have also implemented aircraft and engine health monitoring programs to determine preventative or corrective actions. The newer generation aircraft and engines are able to transmit over ten times more performance data to the airline and aircraft manufacturer engineers, contributing to a higher reliability performance and improved safety. Our engineering and quality assurance Crewmembers are trained and qualified in technical and airworthiness management with relevant aircraft type training and certification. Aircraft maintenance and repair consists of routine and non-routine maintenance work and is divided into two general categories: line maintenance and base maintenance. Line maintenance consists of routine, scheduled daily and weekly maintenance checks on our aircraft, including pre-flight, daily and overnight checks, any diagnostics and routine repairs and any unscheduled items on an as needed basis. All of our line maintenance is currently performed by our own experienced and certified technicians, primarily in Campinas, Porto Alegre and Belo Horizonte, in addition to other airports we serve. Base maintenance consists of more complex tasks that cannot be accomplished during an overnight visit and require well-equipped facilities, such as hangars. Base maintenance checks are performed following a pre-scheduled agenda and work scope for major checks. The scheduled interval for such major checks is set forth in the ANAC Approved Maintenance Program, and is based on the number of hours flown, landings and/or calendar time. Base airframe maintenance checks (which do not cover engine performance and overhaul shop visits) may normally take from one week to one month to be accomplished, depending on the manpower requirements of the work package, and typically are required approximately every 18 months. Engine performance and overhaul shop visits are performed approximately every three years. We currently perform all base airframe maintenance checks for our ATR aircraft and most of the E-Jets base airframe maintenance at our full-capability maintenance facility in Belo Horizonte and outsource certain base airframe maintenance checks for our E-Jets, Airbus A320neos and A330s to FAA, EASA and ANAC certified maintenance, repair and overhaul providers. Since April 2020, we are performing maintenance checks for our Airbus and E-Jet aircraft at our new full-capability maintenance facility in Campinas. We hold concessions for three hangars at our ATR full-capability maintenance center in Belo Horizonte, where we perform airframe heavy checks, line maintenance, painting and interior refurbishment of our ATR aircraft. We also have one hangar in Manaus and Cuiabá for E-Jets and ATR line maintenance. Our current strategy is to outsource all engine repair, performance restoration and overhaul shop visit maintenance to qualified third parties. As such, we have entered into the following long-term flight hour agreements with the following parties; most of such agreements require us to make monthly payments based on utilization and, in turn, these agreements transfer certain risks to the third party provider: a)Rolls-Royce, the manufacturer of the Trent 700 and Trent 7000 engines installed on our A330 and A330neo wide-body aircraft fleet, respectively—Separate power-by-the-hour agreements, or Total Care, each effective throughout the period in which we operate each engine part of the agreement, which provides for comprehensive engine repair, performance restoration, overhaul, engine condition monitoring and diagnostics management of Trent 700 and Trent 7000 engines fleet. Azul S.A. 83 b)CFM International, a joint venture between GE and Safran Aircraft Engines, the manufacturer of the Leap 1A engines installed on our next-generation Airbus A320neo family fleet—A power-by-the-hour twelve year agreement, which provides for the repair, performance restoration, overhaul, engine conditioning monitoring and diagnostics management of each Leap 1A engine fleet. Under this agreement, GE had the obligation to develop its GE Celma plant in Petrópolis near Rio de Janeiro to perform our engine maintenance with full capability by 2020, which it has fulfilled. This will result in significant reduction in turnaround time and engine spares inventory, and will avoid the cost of shipping engines to the United States for maintenance. c)Pratt & Whitney, the manufacturer of the PW1900G engines installed on the E2 aircraft fleet—A power-by-the-hour twelve year agreement for each engine effective from the delivery date of the first aircraft and covering the repair, performance restoration, overhaul, engine conditioning monitoring and diagnostics management of the engine fleet. To support the maintenance of our aircraft, we have entered into component flight hour services program agreements with various industry-leading specialists in the supply, exchange, repair, and lease of commercial aircraft repairable spares. These programs provide us with comprehensive inventory solutions for component repair, on-site inventory and access to spare parts exchange pools for our ATR, E-Jets, and Airbus aircraft fleets. Such programs allow us to optimize our component maintenance costs, improve our cash flow forecasting and achieve the high standards of component reliability required to maximize our aircraft availability. These agreements require us to make monthly payments based on flight hours, and in turn, the agreements transfer certain risks related to the supply and repair of component parts to the third-party service provider. We have entered into the following long-term component flight hour agreements with the following parties: a)ATR — An agreement expiring in 2033 which covers the component repair, on-site inventory and access to a spare parts exchange pool for our ATR72-600 aircraft fleet. b)Embraer — E2 aircraft fleet is supported by an agreement expiring in 2033 which covers the component repair, on-site inventory and access to a spare parts exchange pool. c)Airbus — Separate agreements for both the A320neo and A330 fleet expiring in 2028 and 2036, respectively, which cover the component repair, on-site inventory and access to a spare parts exchange pool. Safety and Quality We are committed to the safety and security of our customers and Crewmembers as well as certified by the IATA Operational Safety Audit – IOSA, an internationally recognized quality and safety evaluation system designed to assess the operational management and control systems of an airline. We maintain an Operational Safety Team, divided into four departments that report to a General Manager: (i) Operational Safety, (ii) Maintenance and Occupational Safety, (iii) Ground Operations Safety, and (iv) Crisis and Emergency Response. The General Manager itself reports directly to the Director of Quality and Safety. Other three areas report directly to the Director of Quality and Safety: (i) Safety Promotion and Training, (ii) Quality and Safety Performance, (iii) Security. All our safety and quality team members have significant experience in the aviation industry and some of them have previously worked for international airlines and aircraft manufacturers, which provides them not only knowledge of airline safety and quality systems, but also familiarity with the fleet we operate. The Operational Safety and Safety Promotion and Training departments are responsible for safety programs such as managing Safety Reports (voluntary and mandatory), Human Factors, the Flight Data Monitoring – FDM, and Line Oriented Safety Audit – LOSA, which maximizes reactive, proactive, and predictive actions to achieve high levels of safety in our operations. The Quality and Performance department conducts audits and inspections in all operational areas in accordance with the Quality Management System. These stringent standards and requirements are key to assuring the very highest levels of safety and quality throughout the operational areas. 84 Azul S.A. Maintenance and Occupational Safety strictly adheres to all activities related to the Safety Management System, or SMS, including the SMS standards established by ANAC, which follows the highest recognized safety standards in the world. The International Civil Aviation Organization ranks Brazil as Category 1 in flight safety standards, the same classification held by the United States and Canada. See “Regulation.” The area also guarantees the safety levels required by labor regulations. The Security department focuses on the protection of aviation operations against acts of unlawful interference in compliance with TSA and ANAC security protocols, being also responsible for the security of executives and VIP customers, as well as physical and electronic security at administrative and operational facilities. Ground Operations Safety is responsible for preventing incidents during transportation of all different goods we carry in our passenger flights and in our freighter fleet. The department is also in charge of setting rules and procedures for the safe transportation of goods, being dangerous goods or regular cargo, as well as keeping track of all safety related procedures regarding ground handling suppliers and their operations. The Crisis and Emergency Response department is responsible for training and maintaining a Special Assistance Team – SAT, composed of volunteers that are trained for emergency responses. This department also conducts regular drills, trainings and relevant media training along with our Communications Office. Together with all the major safety programs currently in place, all of our fleet is equipped with electronic flight bags, an information management device that helps flight crew to perform flight management tasks safely. We are also the only airline in Brazil with ownership of full flight simulators. We maintain our aircraft in strict adherence to the manufacturer’s specifications and all applicable safety regulations, performing routine daily line maintenance as well as other proactive maintenance practices. We are also part of Embraer’s and Airbus’ Aircraft Integrity Monitoring Program, which provides close monitoring of malfunction trends in aircraft’s systems and components. We also strive to comply with or to exceed most health and safety standards. In pursuing these goals, we maintain an active aviation safety program, in which all our personnel is expected to participate and take an active role in the identification, reduction and elimination of hazards and threats. We also operate the largest maintenance facility in Latin America: our MRO hangar, built in our home base and major hub, Campinas – Viracopos Airport (VCP). We are capable of carrying out most of our major maintenance procedures there, following the most up to date maintenance standards, along with state of the art equipment to maintain and improve several aircraft systems. Together with our main hangar, we operate another maintenance facility at Belo Horizonte’s Pampulha Airport, which serves our ATR-72 and E-Jets fleet. We are also investing on a second location in Belo Horizonte located at the international airport for future development and expansion of our maintenance services capabilities. Our ongoing focus on safety and quality is reflected in the training of our Crewmembers, who are provided with the appropriate tools and equipment required to perform their job functions in a safe and efficient manner. Safety in the workplace targets several areas of our operations, including flight operations, maintenance, flight dispatch and station operations. Employees We believe that the quality of our employees, whom we refer to as Crewmembers, promotes our success and growth potential. We believe we have created a strong service-oriented company culture, which is built around our values of safety, consideration, integrity, passion, innovation and excellence. We are dedicated to carefully select, train and maintain a highly productive workforce of considerate, passionate and friendly people who serve our customers and provide them with what we believe is the best flying experience possible. We reinforce our culture by providing an extensive orientation program for new Crewmembers and instill in them the importance of customer service and the need to remain productive and cost efficient. Our Crewmembers are empowered to not only meet our customers’ needs and say “yes” to a customer, but to also listen to our customers and solve problems. Azul S.A. 85 We communicate regularly with all of our Crewmembers, keeping them informed about events at our offices through town hall meetings and question and answer sessions and soliciting feedback for ways to improve cooperation and their work environment. We conduct an annual Crewmember survey and provide training for our leadership that focuses on Crewmember engagement and empowerment. In addition, each of our executives adopts a city and is responsible for meeting with Crewmembers on a periodic basis to be an additional source of corporate communication and assistance. Our executives also interact directly with our customers when traveling to obtain feedback and suggestions about the Azul experience. We aspire to be the best customer service company in Brazil and, as a result, we believe our Crewmembers are more likely to recommend us as a place to work to a friend or relative. We have good relations with our Crewmembers and we have never experienced labor strikes or work stoppages. We are focused on increasing the efficiency and productivity of our Crewmembers. As of December 31, 2025, we had 81 FTEs per aircraft. The following table sets forth the number of our Crewmembers per category and the number of FTEs per aircraft at the end of the periods indicated: At December 31, 2025 2024 2023 Crewmembers Pilots 2,054 2,298 2,219 Flight attendants 3,667 3,622 3,526 Airport personnel 3,302 3,643 3,706 Maintenance personnel 1,376 2,345 2,566 Call center personnel 937 991 1,017 Others 4,211 3,274 2,976 Total 15,547 16,173 16,010 End-of-period FTEs per aircraft 81 70 79 We provide extensive training for our Crewmembers that emphasizes the importance of safety. In compliance with Brazilian and international IATA safety standards, we provide training to our pilots, flight attendants, maintenance technicians, managers and administrators and customer service (airport and call center) Crewmembers. We have implemented employee accountability initiatives both at the time of hiring and on an ongoing basis in order to maintain the quality of our crew and customer service. We currently operate four flight simulators and have an extensive training program at UniAzul, our training facility adjacent to Viracopos airport. See “—Airports and Other Facilities and Properties—Other Facilities and Properties” and “—Safety and Quality.” A national union represents all airline employees in Brazil. However, we do not have a direct collective bargaining agreement with any labor unions. Binding negotiations in respect of cost of living and salary increases are conducted annually between the national union and an association representing all of Brazil’s airlines. Work conditions and maximum work hours are regulated by federal legislation and are not the subject of labor negotiations. In addition, we have no seniority pay escalation. Since our FTEs per aircraft is lower than that of our main competitor, any wage increases have a lower impact on us, thus making labor costs less significant to our operations. As a result, we believe our results of operations are less affected by labor costs than those of our main competitor. 86 Azul S.A. Our compensation strategy is competitive and meant to retain talented and motivated Crewmembers and align the interests of our Crewmembers with our own. Salaries and benefits paid to our Crewmembers, include, among others, health care, dental care, child care reimbursement, life insurance, funeral assistance, psychosocial assistance under our Anjo Azul program, school aid (granted to expatriate executive officers only), housing allowance (granted to expatriate executive officers only), salary-deduction loans, bonuses, pension plans, transportation tickets, food allowances and meal vouchers. We believe that we have a cost advantage compared to industry peers in salaries and benefits expenses due to high employee productivity measured by the average number of employees per aircraft. We also benefit from generally lower labor costs in Brazil, when compared to other countries, which is somewhat offset by lower productivity due to government requirements over employee labor conditions and taxes on payroll. To motivate our Crewmembers and align their interests with our results of operations, we provide a leadership incentive plan based on the achievement of pre-defined company performance targets (Programa de Recompensa). In connection with the implementation of the Voluntary Reorganization, we have agreed to the terms of the MIP, which was approved at our extraordinary shareholders’ meeting (assembleia geral extraordinária) held on February 12, 2026. The MIP is designed to reward performance and align the incentives of our executive management team, non-management members of our board of directors, other holders of our common shares and certain employees with our long-term strategic objectives. . See “Item 6.B. Management Compensation—MIP Approved on February 12, 2026.” Insurance We maintain insurance policies as required by law and the terms of our aircraft leasing agreements. Our insurance coverage for third party and passenger liability is consistent with general airline industry standards in Brazil and we insure our aircraft against physical loss and damage on an “all risks” basis. We maintain all mandatory insurances coverage for each of our aircraft and additional insurances coverage required by lessors, although liability for war and associated acts, including terrorism, is covered by the Brazilian government. Environmental and Sustainability Practices We are the first airline in the world to have its decarbonization target approved by the Science Based Targets initiative (SBTi) in August 2024. This milestone not only reflects our commitment to significantly reducing our carbon emissions, with the long-term ambition of achieving carbon neutrality by 2045, in line with sustainability efforts currently pursued by our peers in the global aviation industry. Our long-term target demonstrates our alignment with the Paris Agreement, and underscores our goal of driving measurable and impactful climate action. In addition, Azul has been recognized in the S&P Global Sustainability Yearbook 2025 as an Industry Mover, achieving the highest improvement in sustainability scores among airlines globally. This recognition underscores our continuous efforts to enhance our environmental and sustainability performance and drive meaningful change within the sector. Emissions efficiency remains a central focus for our sector. Our initiatives, which target to achieve net-zero emissions in the long-term, include operating the youngest and most fuel-efficient fleet in Brazil, implementing route optimization, and investing in next-generation aircraft models that significantly reduce fuel consumption and emissions. Our ongoing fleet transformation—replacing older aircraft with advanced, eco-efficient models—plays a vital role in these efforts, reducing our environmental footprint both per flight and on a passenger basis. Our commitment to sustainability extends beyond environmental stewardship. Through Movimento Ara, our transformational project for connectivity, we provide freight discounts to entrepreneurs and cooperatives that work to preserve the Amazon rainforest. This initiative highlights the essential role aviation plays in enabling socio-economic development in Brazil and Latin America, particularly in remote regions. By connecting these communities to broader markets, we support sustainable economic growth while contributing to the preservation of one of the world’s most critical ecosystems. Azul S.A. 87 Seasonality Our operating revenue and results of operations are substantially dependent on overall passenger traffic volume, which is subject to seasonal and other changes in traffic patterns. Therefore, our operating revenue and results of operations for any interim period are not necessarily indicative of those for the entire year. We generally expect demand to be greater in the first, third and fourth quarters of each calendar year compared to the second quarter of each year. This demand increase occurs due to an increase in business travel during the second half of the year, as well as the Christmas season, Carnival and the Brazilian school summer vacation. Although business travel can be cyclical depending on the general state of the economy, it tends to be less seasonal than leisure travel, which peaks during vacation season and around certain holidays in Brazil. The table below shows our average fare in reais for the periods indicated, reflecting our total passenger revenue divided by passenger flight segments for such periods: Average Fare (R$) Year Ended December 31, First Quarter Second Quarter Third Quarter Fourth Quarter 2023 590.8 550.1 587.6 643.6 2024 604.4 521.2 588.6 629.9 2025 633.8 574.1 656.3 671.4 Intellectual Property Brands We have registered, or applied for registration or renewed licenses for approximately 100 trademarks with the INPI including, among others, the trademarks “AZUL,” “TUDO AZUL,” “AZUL LINHAS AÉREAS BRASILEIRAS,” “AZUL FLEX,” “AZUL PROMO,” “AZUL VIAGENS,” “VOE AZUL,” and “AZUL CARGO EXPRESS.”. We have also registered / applied for approximately 20 trademarks outside Brazil, such as the European Union, Argentina, Chile and China. Most of these trademarks are pledged as collateral to secure the Exit Notes. We operate software products under licenses from our vendors, including Oracle, Trax, Sabre, Navitaire, Amadeus, Comarch, Lufthansa, Sita, Jeppesen, SmartKargo, Juniper, Adobe, Service Now, Microsoft and OneTrust. Under our agreements with Embraer, ATR and Airbus we use their knowledge and proprietary information to maintain our aircraft. Patents We possess no patents registered with or granted by the INPI. Domain Names We have also registered several domain names with NIC.br, Brazil’s internet domain name registry, and other domain registrars. The registered domains are, among others, “voeazul.com.br,” “flyazul.com,” “azulcargoexpress.com,” “azulviagens.com.br” and “tudoazul.com”, which are also pledged as collateral to secure the Exit Notes. 88 Azul S.A. Regulation Overview Under the Brazilian Constitution, air transportation is a public service. It is therefore subject to extensive governmental regulation and monitoring by several federal agencies and entities. The sector is regulated by the Brazilian Aeronautical Code, which covers air service concessions; airport infrastructure and operations; flight safety; airline certification; leasing, taking security, disposal, registration and licensing of aircraft; crew training; inspection and control of airlines; public and private air carrier services; civil liability; and penalties for infringement. Brazil has signed and ratified the Warsaw Convention in 1929, the Chicago Convention of 1944, the Geneva Convention of 1948, the Montreal Convention of 1999 and the Cape Town Convention of 2001, the leading international conventions relating to worldwide commercial air transportation activities. The National Civil Aviation Policy (Política Nacional de Aviação Civil), or PNAC, which was adopted in 2009, sets out the main governmental guidelines and policies that apply to the Brazilian civil aviation system. The PNAC encourages all regulatory bodies to issue regulations on strategic matters such as safety, competition, environmental and consumer issues, and to inspect, review and evaluate the activities of all operating companies. Regulatory Bodies The chart below illustrates the main regulatory bodies together with their responsibilities and reporting lines: The Ministry of Ports and Airports (Ministério dos Portos e Aeroportos) supervises civil aviation services and activities in Brazil and is responsible for issuing governmental policies for the sector. The Ministry of Infrastructure reports directly to the President of Brazil and is responsible for the oversight of ANAC and INFRAERO. ANAC, which was created in 2005, has full regulatory powers regarding the following: •guiding, planning, stimulating and supporting the activities of public and private civil aviation companies in Brazil; •regulating flight operations; and •regulating economic issues affecting air transportation and airports, including air safety, certification and fitness, insurance, consumer protection and competitive practices. Azul S.A. 89 INFRAERO is a state-controlled airport operator that reports to the Ministry of Ports and Airports. It is responsible for managing, operating and controlling all government-operated federal airports (i.e., whose operations have not been delegated to private parties), including safety, operational conditions and infrastructure. With respect to specific privatized airports (Natal, Galeão, Confins, Guarulhos, Viracopos and Brasília), although INFRAERO still holds a minority stake in each of them, INFRAERO is no longer in charge of operations, which are now handled by their respective private operators. The National Commission of Airport Authorities (Comissão Nacional de Autoridades Aeroportuárias), or CONAERO, which was created in 2011, is a consultative and deliberative forum composed of representatives from nine federal government agencies directly involved in the management of the country's airports, under the coordination of the Civil Aviation Secretariat. Its role is to coordinate the activities of the different entities and public agencies with respect to airport efficiency and safety. The Department of Airspace Control (Departamento de Controle do Espaço Aéreo), or DECEA, reports indirectly to the Brazilian Minister of Defense. It is responsible for planning, administrating and controlling activities related to airspace, aeronautical telecommunications and technology, as well as military aviation. Its functions include approving and overseeing the implementation of equipment and navigation, meteorological and radar systems. The DECEA also controls and supervises the Brazilian Airspace Control. The Brazilian Civil Aviation Council (Conselho de Aviação Civil), or CONAC, which was created in 2000, is an advisory body to the President of Brazil with authority to establish national civil aviation policies, to be adopted and enforced by the Aeronautics High Command and ANAC. CONAC establishes guidelines relating to following: •the representation of Brazil in conventions, treaties and other activities related to international air transportation; •airport infrastructure; •the provision of funds to airlines and airports to further strategic, economic or tourism interests; •the coordination of civil aviation; •air safety; and •the granting of air routes, concessions and permissions for commercial air transportation services. Airport Infrastructure Brazil currently has more than 3,900 private and public airfields. Airlines that operate regularly scheduled flights primarily use public airport infrastructure, with 98% of total passenger traffic passing through a network consisting of 52 airports. A number of smaller regional airports in Brazil are under the control of state or municipal governments and are managed by local governmental entities or private players. INFRAERO is responsible for safety and security activities at the largest airports, including passenger and baggage screening, cargo security measures and airport security. In 2011, the Brazilian government started to grant concessions for the operation of certain airports in Brazil through public biddings. Between 2011 and 2023, 59 airports have been privatized after bid concessions, including our three hubs, Viracopos, Confins and Recife. The concessions for these airports have terms of between 20 to 30 years. Aeroportos Brasil, the holder of the concession to operate Viracopos airport, has announced its intention to return this concession to ANAC. Aeroportos Brasil’s judicial reorganization plan was approved by its creditors on February 14, 2020, provided that Aeroportos Brasil present its request for rebidding of Viracopos airport concession to the Brazilian federal government. 90 Azul S.A. On February 18, 2020, the debt restructuring court approved the judicial recovery plan and on March 19, 2020, Aeroportos Brasil filed an application to ANAC for the rebidding of Viracopos airport, in compliance with the judicial recovery plan. On July 17, 2020, the Federal Government enacted Decree No 10.427/2020, authorizing the rebidding of Viracopos airport. On June 14, 2022 CPPI Resolution 232 extended the deadline for completion of the Viracopos airport licensing process to July 16, 2024. On July 12, 2022, CPPI Resolution 243 revoked the second article of the previous CPPI Resolution, but the deadline for completing the Viracopos Airport licensing process remained unchanged. In April 2021, the Grupo de Consultores em Aeroportos (GCA), a consortium made up of various private companies and a potential bidder in the auction, filed a feasibility study with the Brazilian government for a new bidding process for the concession at Viracopos airport. Public consultation on the feasibility study was held in October 2021. After ANAC approval of the feasibility study on March 8, 2022, it was sent to the Tribunal de Contas da União (TCU). At the beginning of 2022 the process was suspended due to discussions between the concessionaire and ANAC about the non-depreciated assets to be indemnified, but on December 12, 2022 the minister of the court authorized the resumption of the process. In March 2019, the Brazilian government concluded an auction for the concession of 12 airports grouped into three regional blocks – Northeast, Midwest, and Southeast, including our third largest hub in Recife. In April 2021, the Brazilian government auctioned another 22 airports located in the Southern, Mid and Northern region of the country, concluding the 6th concession round. In August 2022, the Brazilian government auctioned another 15 airports located in the North, Southeast and Central West region of Brazil. This auction is the most important one because includes Congonhas airport. Resolution No. 682, of June 2022 regulates airport coordination and defines rules for slot allocation at coordinated airports. Under this resolution, airports operating at a high level of occupancy of their capacity are deemed by ANAC “coordinated airports.” The following airports are currently deemed to be “coordinated airports” by ANAC: Congonhas, Guarulhos, Recife and Santos Dumont. In July of 2014, ANAC enacted a resolution establishing new procedures to allocate slots in airports operating at full capacity. Through such allocation, we received 26 new slots at Congonhas airport. In November 2014, we started operating 13 daily flights from Congonhas airport to some of our most profitable markets including Belo Horizonte, Porto Alegre, and Curitiba, leveraging the connectivity we have in these cities and expanding our flights available to São Paulo passengers. In August 2019 ANAC announced a temporary distribution of 41 slots in Congonhas airport previously operated by Avianca Brasil, of which 15 slots were allocated to us. As a result, we adjusted our flight schedules at Congonhas airport and since September 2019, we started operating a shuttle service between Congonhas and Rio de Janeiro and between Congonhas and Belo Horizonte ceasing to operate flights to Porto Alegre and Curitiba. In 2023, Azul achieved an important advance in its presence in Congonhas. With the new rules for slot distribution defined in Resolution No. 682/2022 and the increased capacity in Congonhas operations, Azul increased its number of slots at this airport from 26 to 84. As a result, Azul offers scheduled flights from Congonhas to important destinations such as Brasília, Porto Alegre, Curitiba, Belo Horizonte, Recife and Rio de Janeiro. Due to the exceptional Avianca situation, ANAC amended Resolution No. 682 in June 2022 to increase the competition in congested airports. The new rules were used for the definitive distribution of the 41 slots used by Avianca Brasil at Congonhas airport, which were allocated provisionally in 2019, as well as the slots that may arise from increased airport capacity. In addition, the secondary slot market was also created, through the possibility of slot assignments between airlines from different economic groups, which reduces access and exit barriers for airlines at airports with scarce infrastructure, allows for dynamic market solutions among the players themselves, which can promote increased efficiency in the use of slots. Additionally, the Federal Senate Resolution No. 32 of November 16, 2023, authorized the Brazilian Development Bank (BNDES) to contract an external credit operation with the New Development Bank (NDB), with the guarantee of the Federative Republic of Brazil, in the amount of up to US$500 million, which we expect it may facilitate the financing of airport infrastructure projects and air services, contributing to the growth and modernization of the sector. Azul S.A. 91 Airlines and service providers may lease areas within federal, state or municipal airports, such as hangars and check-in counters, subject to concessions or authorizations granted by the authority that operates the airport—which may be INFRAERO, the state, the municipality or a private concession holder, as the case may be. No public bid is required for leases of spaces within airports, although INFRAERO may conduct a public bidding process if there is more than one applicant. In other cases, the use may be granted by a simple authorization or permission issued by the authority that operates the airport. In the case of airports operated by private entities, the use of concession areas is subject to a commercial agreement between the airline and the airport operator. We have renewable concessions with terms varying from one to five years from INFRAERO and other granting authorities to use and operate all of our facilities at each of the major airports that we serve. Most of our concession agreements for passenger service facilities at our terminals, which include check-in counters and ticket offices, operational support areas and baggage service offices, contain provisions for periodic adjustments of the lease rates and the extension of the concession term. We have airport areas under concession and certain areas which concessions are being duly formalized in order to be renewed. Air Transportation Service Concessions With the "Voo Simples" (Simple Flight) program, the sector was made less bureaucratic with changes in Brazilian legislation and air services are no longer public services but are now considered economic activities of public interest subject to regulation by the civil aviation authority, in the form of specific legislation. Airports can be private or public, which can be operated directly by the government, by specialized companies of the Federal Public Administration, through agreements with states or municipalities, or by concession or authorization for third parties. ANAC requires companies interested in operating air services to meet certain economic, financial, technical, operational and administrative requirements. The applicant must: (i) have a valid Airline Operating Certificate (Certificado de Operador Aéreo – “COA”); and (ii) comply with the ownership restrictions discussed below. ANAC has the authority to revoke a concession if the airline fails to comply with the Brazilian Aeronautical Code and any other relevant laws or regulations, including if the airline fails to meet specified service levels, ceases operations or declares bankruptcy. ALAB’s first concession was granted on November 26, 2008 by ANAC and had a term of ten years. Therefore, on November 21, 2018, ALAB made a formal request to renew the concession. On December 6, 2018, ANAC published the renewal of concession contract for another 10 years. With the legislative changes made as part of the “Voo Simples” (Simple Flight) program, it is no longer necessary to obtain a concession to operate air services, but the regulatory requirements of ANAC and the maintenance of the COA remain. Azul's updated COA was issued on July 23, 2020, with unlimited validity, except in case of cancellation, suspension, or revocation for non-compliance with ANAC requirements. On December 23, 2022 ANAC certified Azul's compliance with all requirements for air service operation, after the agency's evaluation process. Route Rights Domestic routes ANAC Resolution 682/2022, which came into effect on July 1, 2022, divided Brazilian airports into three levels: undeclared (level 1), facilitated (level 2), and coordinated (level 3). This new level division brought greater flexibility to airlines through the creation of the secondary slot market, respecting the norms and parameters established by ANAC, reducing access and exit barriers to airports with infrastructure scarcity, and facilitating the dynamics among the players themselves. In the case of coordinated airports, such as Congonhas, Guarulhos, Santos Dumont and Recife, the objective of this resolution was to align with international practices within the scope of the Worldwide Airport Slot Guidelines (WASG). 92 Azul S.A. International Routes In accordance with Resolution No. 491, of September 10, 2018, rights regarding international routes and the corresponding transit rights depend on the bilateral air transport treaties between Brazil and the foreign government. Under these treaties, each government grants to the other the right to designate one or more domestic airlines to operate scheduled services between certain destinations in each country. Airlines are only entitled to apply for new international routes when they are made available under these agreements. ANAC has the authority to grant Brazilian airlines approval to operate a new international route or change an existing route, subject to the airline having filed satisfactory studies to ANAC demonstrating the viability of the routes and fulfilling certain conditions with respect to the concession for the routes. A Brazilian airline that received ANAC approval to provide international services may address a request for approval of a new or changed route to the Air Services Superintendence of ANAC (SAS – Superintendência de Acompanhamento de Serviços Aéreos da ANAC). The Superintendence submits a non-binding recommendation to the president or ANAC, who may decide whether to approve the request. An airline’s international route frequency rights may be terminated if the airline fails to maintain an Index of Frequency Utilization (Índice de Utilização de Freqüência), or IUF, of at least 66% of flights for any 180-day period, or if the airline does not initiate operations within a period of 180 days from the grant of the new route. Resolution No. 491 also established that, after March 2019, low frequency international routes may be reallocated to different operators if an allocation request is made by another company and there are no other available frequencies to the country of destination. Low frequency routes are those with less than 50% of usage in the period of evaluation of 26 consecutive weeks. In 2010, ANAC approved regulations regarding international fares for flights departing from Brazil to the United States and Europe, which gradually removes the previous minimum fares. In 2010, ANAC approved the continuity of bilateral agreements providing for open skies policies with other South American countries. In 2011, United States and Brazil reached an open-skies aviation agreement to liberalize the air services and traffic between both countries, including, among other things, removal of restrictions on pricing and additional scheduled and charter services to the congested airports of São Paulo and Rio de Janeiro. Both countries agreed to a transition period of five years; however, the agreement was only approved by the Brazilian National Congress in March 2018 and sanctioned by the President in office (Michel Temer) in June 2018.In addition, Brazil and United Kingdom reached a similar agreement in December 2018 that includes unlimited flight numbers, no restriction of routes, freedom of tariffs and of codeshare between airlines. In 2022, ANAC signed a Memorandum of Understanding with Switzerland and Suriname for the exchange of 7th freedom of air traffic rights for cargo-only services. Open Skies type agreements have been obtained with Republic of Guinea, Suriname and Kenya and agreements are under negotiation with Saudi Arabia, Bahamas, Ethiopia, Morocco, India and Benin. In December 2023, during an event held in Saudi Arabia, ANAC signed two new air services agreements, with Antigua and Barbuda and Uganda, as well as revising the agreements with Austria, Saudi Arabia, Italy and Iceland. Agreements with the Czech Republic and Oman were also discussed, as well as improvements to agreements with Turkey, Qatar and the United Arab Emirates. In 2024, ANAC signed an ‘open skies’ agreement with its Argentinian counterpart, which provides for easier approval of cargo flights and the end of weekly frequency limits for flights between the two countries. Domestic Slots Policy A slot is a predetermined period of time during which the airline is allowed to take off or land at a specific airport. To obtain domestic slots, the airline must submit a request to ANAC, and ANAC will, in turn, distribute slots to the requesting airlines in accordance with the number of new slots available as per the slot allocation calendar defined by Resolution No. 682. Airlines may transfer slots with ANAC’s prior approval. An airline may lose its rights to its slots where service provision is below the quality determined by ANAC. In these cases, the slots are distributed to other airline companies by public tender. Azul S.A. 93 Currently, there are a four Brazilian ANAC “coordinated airports,” where slots are necessary to perform scheduled flights: Congonhas, Guarulhos, Santos Dumont and Recife. Other ten airports are subject to slot coordination procedures (coordination performed by their respective airport operators instead of ANAC). Congonhas airport, which is the busiest domestic airport in Brazil, has a shortage of slots due to the lack of airport infrastructure to meet current demand. As a result, the number of new slots granted by ANAC at this airport is limited. New slots are awarded by public tender and generally only become available when they are taken from existing airlines as a result of disciplinary proceedings, or when airport capacity is increased. In the most recent distribution of slots, ANAC opened the public tender to all airlines that were qualified to bid. Airports in smaller and medium-sized markets, which are the focus of our growth strategy, do not require slots, which allows us greater flexibility in establishing our timetable when building out our route network. In July of 2014, ANAC enacted a resolution establishing new procedures to allocate slots in airports operating at full capacity. Through such allocation, we received 26 new slots at Congonhas airport. In November 2014, we started operating 13 daily flights from Congonhas airport to some of our most profitable markets including Belo Horizonte, Porto Alegre, and Curitiba, leveraging the connectivity we have in these cities and expanding our flights available to São Paulo passengers. In August 2019 ANAC announced a temporary distribution of 41 slots in Congonhas airport previously operated by Avianca Brasil, of which 15 slots were allocated to us. As a result, we adjusted our flight schedules at Congonhas airport and since September 2019, we started operating a shuttle service between Congonhas and Rio de Janeiro and between Congonhas and Belo Horizonte ceasing to operate flights to Porto Alegre and Curitiba. As a result of the new rules for slot distribution defined in Resolution No. 682/2022 and the increased capacity in Congonhas operations, in 2023 Azul increased its number of slots at Congonhas airport from 26 to 84. As a result, Azul offers scheduled flights from Congonhas to important destinations such as Brasília, Porto Alegre, Curitiba, Belo Horizonte, Recife and Rio de Janeiro. Import of Aircraft into Brazil Any civil or commercial aircraft must be certified in advance by ANAC before being imported into Brazil. Once certified, the aircraft may be imported in the same way as other goods. Following import, the importer must register the aircraft with the Brazilian Aeronautical Registry (Registro Aeronáutico Brasileiro, “RAB”). Registration of Aircraft Brazilian aircraft must have a certificate of registration (certificado de matrícula) and a valid certificate of airworthiness (certificado de aeronavegabilidade), both of which are issued by the RAB after technical inspection of the aircraft by ANAC. The certificate of registration establishes that the aircraft has Brazilian nationality and serves as proof of its enrollment with the aviation authority. The certificate of airworthiness, which is generally valid for 15 years from the date of ANAC’s initial inspection, authorizes the aircraft to fly in Brazilian airspace, subject to continuing compliance with certain technical requirements and conditions. An aircraft’s registration may be cancelled if the aircraft is not in compliance with the requirements for registration and, in particular, if it has failed to comply with any applicable safety requirements specified by ANAC or the Brazilian Aeronautical Code. All information relating to the contractual status of an aircraft, including title documents, leases and mortgages, must be filed with the RAB in order to update public records. Fares Brazilian regulations allow airlines to establish their own domestic fares without prior approval from the Brazilian government or any other authority. However, ANAC regularly monitors domestic fares. In particular, under regulations published in 2010, Brazilian airlines must report their monthly prices to ANAC by the last business day of each month. 94 Azul S.A. Baggage Charge According to ANAC’s Resolution 400 of December 13, 2016 (General Conditions of Air Transport), which became effective on March 14, 2017 (but had its applicability and effects suspended until April 29, 2017) airlines are allowed to charge for checked baggage. On June 1, 2017, we started charging our passengers a fee for checked baggage and believe this will be an important source of revenue going forward. The legality of charging for checked baggage was confirmed by the Presidential veto of Provisional Measure MP 863/2018, which intended to prohibit charging for checked baggage. During the legislative process to convert Provisional Measure No. 1,089/2021 into Federal Law No. 14,368/2022, the Brazilian Congress included a provision requiring airlines to offer free checked baggage to passengers. This provision was subject to a presidential veto, which remains pending review by the National Congress. The veto may be overturned by an absolute majority vote in a joint session of the Chamber of Deputies and the Federal Senate. If the veto is overturned, airlines would be required to provide free checked baggage allowance to passengers General Conditions Applicable to Air Transportation On December 14, 2016, ANAC approved Resolution No. 400, of December 2016, which sets forth certain general conditions applicable to air transportation. Resolution No. 400 became effective on March 14, 2017 for all flight tickets purchased on and after this date. This resolution establishes boarding documentation requirements, provides customers with a 24 hour post-purchase period to cancel a flight ticket without charge (as long as the flight is at least 7 days in advance), reduces repayment periods, increases the baggage allowance, allows for free passenger name corrections on flight tickets, guarantees return tickets in the event a one-way cancellation is made in advance for a domestic flight and simplifies the return and compensation process for lost baggage. Restrictions on the Ownership of Shares in Air Transportation Service Providers On December 13, 2018, the Brazilian Federal government issued Provisional Measure MP 863/2018, a new rule amending the Brazilian Aeronautical Code, which established that at least 80% of the voting stock of a company that holds a concession to provide scheduled air transportation services must be held directly or indirectly by Brazilian citizens, and the company must be managed exclusively by Brazilian citizens. MP 863/2018 allows foreign shareholders to hold up to 100% of the voting stock of Brazilian airlines companies and lifts the restriction on foreign management of domestic carriers. Thus, regardless of the company’s capital origin, as long as the legal entity is incorporated under Brazilian law, there are no restrictions on the foreign capital interest in such entities. On June 17, 2019, Provisional Measure MP 863/2018 was converted into Law No. 13,842/2019, amending the Brazilian Aeronautical Code, and allowed 100% of the voting stock of a company that holds a concession to provide scheduled air transportation services to be owned by foreigners, which completely opened up the market to non-Brazilian citizens. Besides that, the leadership of companies that hold a concession to provide scheduled air transportation services can now be carried by foreigners and ANAC will not need to approve any acts of formation or changes to the corporate governance structure of such companies. Environmental Regulation Brazilian airlines are subject to various federal, state, and municipal laws and regulations related to the protection of the environment, including the disposal of waste, the use of chemical substances, air emissions and sound pollution, among others. These laws and regulations are enforced by various governmental authorities. If an airline fails to comply with these laws and regulations it may be subject to administrative and criminal sanctions, in addition to the obligation to remediate and/or compensate any environmental damage and/or to pay damages to third parties. Azul S.A. 95 In addition, under Brazilian law civil liability for environmental damage is strict (i.e., irrespective of fault or negligence), joint and several, meaning that we may be held liable for environmental damages caused by any third parties whom we hire, for example, to dispose of waste. Brazilian environmental law also provides for the “piercing of the corporate veil,” which imposes liability on a corporation’s controlling shareholders to reach the corporate assets if the liable legal entity lacks funds to repair the environmental damage. Accordingly, our corporate veil may be pierced for any environmental damage caused, directly or indirectly (e.g.: by means of a service provider), by ALAB and TRIP. We seek to comply with all environmental legislation and all requirements of public authorities to avoid liabilities and limit additional expenses. Environmental Licenses, Permits and Authorizations Environmental licensing is the procedure through which activities that use natural resources, are potentially polluting, or may cause environmental degradation must obtain the appropriate licenses (preliminary license - LP, installation license - LI and operating license - LO) from Brazilian federal, state, or municipal authorities. This procedure contemplates the location, construction, installation, expansion, and operation of projects to ensure compliance with Environmental regulations. Under Brazilian law, the authority to grant environmental licenses for facilities or activities within a state, among other activities, belongs to the state environmental authorities, unless the environmental impact would extend beyond the state border or impact any federal area, in which case the Brazilian federal environmental agency has jurisdiction. Municipal authorities have jurisdiction over the licensing of facilities or activities that have a local impact. Each state has the power to establish specific regulations regarding environmental licensing procedures, within the scope of general guidelines established by the Brazilian government. Most of the requests for renewal of an environmental license must be filed at least 120 days before its expiration date. Provided that this deadline is complied with, the license is automatically extended until the environmental authority issues its decision. The construction, implementation, operation, or expansion of any facility or activity that uses natural resources, is potentially polluting, or may cause environmental degradation – without the required license – or conducting such activities in violation of existing licenses, permits and authorizations, subjects the violator to administrative, criminal, and civil liability (in case of any environmental damage). Therefore, we may be held liable if we carry out any potentially polluting activity without a valid permit or in violation of the permit requirements. We exercise caution in environmental matters and reserve the right to reject goods and services from companies that do not comply with our environmental protection standards. Federal Technical Register Federal Law No. 6,938/1981, along with IBAMA’s Instruction No. 13/2021 and IBAMA’s Instruction No. 6/2022 (and others), issued by the Brazilian Institute for the Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis, “IBAMA”), require that all legal entities engaged in potentially polluting activities be registered with the IBAMA’s Federal Technical Register of Potentially Polluting Activities and/or Users of Natural Resources (“CTF/APP”). Under IBAMA’s Ordinance No. 149/2022, registration with the CTF/APP is mandatory for airlines that import new tires, have temporary storage facility for the collection of used or contaminated lubricating oil, transport radioactive material or waste, import motor vehicles for their own use, or perform air transport of forestry products that are subject to the issuance of a Forestry Origin Document (“DOF”). Potentially polluting activities and activities that use natural resources, such as the manufacture and assembly of aircraft, besides being subject to the CTF/APP, are also subject to the quarterly payment of the Environmental Control and Inspection Fee (“TCFA”), to IBAMA, and are required to submit an annual report on the activities conducted by March 31 every year. 96 Azul S.A. The Federal Decree No. 6,514/2008 subjects entities with no CTF/APP registration to fines that range from R$50.00 to R$9,000.00, depending on the size of the enterprise and the economic capability of the offender. Failure to pay TCFA entails up to 20% (twenty percent) on the amount owed, as well as default interest of 1% (one percent) per month. Furthermore, failure to submit that annual report on the activities conducted subjects the company to fines of up to 20% (twenty percent) of the TCFA. Currently, all our activities are subject to registration with IBAMA’s CTF/APP and are duly regular. Waste Federal Law 12.305/2010 sets forth the principles, objectives, and instruments of the National Solid Waste Policy (“PNRS”), as well as the guidelines, targets, and actions related to integrated and the environmentally sound management of solid waste, except for radioactive waste, which is governed by its own specific legislation. Brazilian legislation regulates the segregation, collection, storage, transportation, treatment, and final disposal of waste, and provides that whoever hires third parties for the waste management and its final disposal is jointly and severally liable with the service provider. The PNRS provides for shared accountability throughout the product life cycle among manufacturers, importers, distributors, retailers, and consumers, to minimize the volume of solid waste and tailings generated, as well as reducing the impact on human health and environmental quality. Therefore, manufacturers of some products shall implement a reverse logistics (logística reversa) system, which involves creating and implementing actions and procedures to ensure the collection and recovery of solid waste. This process is designed to facilitate the reuse of materials within manufacturing cycles or to guarantee their final environmentally responsible disposal. Such obligation applies to the Company as a consumer of lubricating oil, tires, etc. The reverse logistics systems of these products are currently being implemented in Brazil. Each part of the consumer chain has specific obligations with the goal of reducing the volume of the solid waste and mitigating adverse impacts on human health and the environment. Due to this obligation, the costs for proper waste management will probably increase in the coming years, because of the implementation of sectorial agreements and greater regulation. Proper transportation, treatment, and final discharge of waste depend on the waste classification according to the applicable technical instructions. The Waste Management Plans describe management of solid waste and is part of the environmental licensing procedure. The administrative penalties applicable to the improper discharge of solid, liquid, and gas waste, whether resulting in effective contamination, include, among others, an embargo of the activity or civil work and fines up to R$50,000,000. Furthermore, improper disposal of solid waste may impose obstacles for obtaining other environmental licenses, permits and authorizations, as well as criminal and civil liability. Environmental Liability The Brazilian Federal Constitution provides for three different types of environmental liabilities: (i) civil, (ii) administrative, and (iii) criminal. These liabilities may be applied separately and cumulatively. Any individual or legal entity (public or private) that directly or indirectly causes, by action or omission, any damage to the environment may be held liable for such damage, as well as for any violation of environmental regulation. Azul S.A. 97 As regards civil liability for environmental damage, Brazil’s National Environmental Policy (Federal Law 6.938/1981) provides for strict, joint and several liability for damages caused to the environment, irrespective of who directly or indirectly caused the damage or whether there was fault or negligence. This means that we can be held liable for any damage irrespective of fault, simply by demonstrating a cause-effect relationship between our activity (or our service provider’s) and the resulting damage. Public Attorneys’ offices, federal, state or municipal government, foundations, state-owned companies, and environmental or social protection associations are empowered to file public civil actions seeking compensation for environmental damages. The National Environmental Policy establishes joint liability among all the parties involved in polluting activity and that benefits directly or indirectly from it. Accordingly, the affected party or any of the other parties entitled to sue may choose to seek damages against any single responsible party, and the defendant is entitled to seek a right of recourse against all other parties involved in polluting activity. According to Brazilian Supreme Court, there is no statute of limitations for claims seeking compensation for environmental damages. Furthermore, based on the principle of “full reparation”, our corporate veil may be pierced to reach the corporate assets if the Brazilian legal entities lack funds to repair environmental damage for which they are liable. Brazilian Federal Decree 6.514/2008 sets forth the infractions and administrative sanctions regarding environmental matters and the federal administrative procedure to investigate these infractions, which serves as a guideline for the state’s administrative procedure. Administrative sanctions include: (i) warnings; (ii) fines ranging from R$50.00 to R$50,000,000.00; (iii) daily fines; (iv) seizure of the animals, products, and subproducts of fauna and flora; (v) product destruction; (vi) product sales and manufacturing suspension; (vii) closure of the plant or construction; (viii) construction demolition; (ix) full or partial suspension of the activities; and (ix) restriction of rights. Moreover, under the Environmental Crimes Act (Federal Law No. 9605/1998), criminal liability for environmental matters in Brazil extends to corporations as well as to individuals. Criminal liability requires proof of intent, and if a corporation is found criminally liable for an environmental violation, its officers, directors, managers, agents, or proxies may also be subject to criminal penalties. With respect to legal entities, Brazilian regulations relating to environmental crimes contemplate the following potential penalties, which can be cumulative: (i) fine; (ii) partial or total suspension of activities; (iii) temporary closure/interruption of a facility, work or activity; (iv) prohibition on bidding on government contracts or obtaining government subsidies, grants or donations from them; and (v) community service (such as funding of environmental programs and projects; execution of works to recover affected areas; maintenance of public spaces; and contributions to public environmental or cultural entities). The settlement of a civil or administrative lawsuit does not prevent criminal prosecution for the same violation. Greenhouse Gas Emissions Federal Law No. 15,042/2024 establishes the Brazilian Greenhouse Gas (“GHG”) Emissions Trading System (“SBCE”). The SBCE provides obligations for operators of facilities and GHG sources that emit more than 10,000 tCO2e (Tonnes of carbon dioxide equivalent) per year, and include (i) submitting a monitoring plan to the SBCE management body; (ii) submitting a report on GHG emissions and removals, in accordance with the approved monitoring plan; (iii) submitting a report on the periodic reconciliation of obligations set forth within the system; and others. On May 15, 2024, Resolution 743/2024 was sanctioned in Brazil by the National Civil Aviation Agency, which regulates the monitoring and compensation of GHG emissions related to international operations, within the scope of CORSIA - Carbon Offsetting and Reduction Scheme for International Aviation, in order to comply with Volume IV of Annex 16 of the Convention on International Civil Aviation. Brazil has signed the commitment to reduce CO2 emissions in international air transport, which aims to ensure carbon-neutral growth in Brazilian aviation as of 2027 and 100% offsetting of CO2 emissions by 2050. As far as climate change management is concerned, we are working on three fronts: monitoring, reduction and compensation. 98 Azul S.A. Federal Law No. 14.993/ 2024 provides for the promotion of sustainable low-carbon mobility and the capture and storage of CO2, having established, among other things, the National Sustainable Aviation Fuel Program (ProBioQAV), also known as SAF - Sustainable Aviation Fuel. The law stipulates that airline operators must reduce GHG emissions by at least 1%, starting in 2027, on domestic flights, through the use of SAF and other alternative means, with a gradual increase in this percentage until it reaches 10% in 2037. Personal Data Protection In Brazil, the rights to intimacy, private life, and the protection of personal data are safeguarded by the Federal Constitution of 1988 and the Brazilian Civil Code (Law No. 10,406/2002). Sector-specific laws also contain provisions on the subject, such as the Consumer Protection Code (Law No. 8,078/1990) and the Brazilian Civil Rights Framework for the Internet (Law No. 12,965/2014, regulated by Decree No. 8,771/2016). It is worth noting that the Brazilian Civil Rights Framework for the Internet applies to application and connection providers and aims at ensuring Internet neutrality and the confidentiality of private communications and of connection and access records. It also sets forth certain principles and rules regarding the privacy and protection of users’ personal data. The failure to comply with the provisions of the Brazilian Civil Rights Framework for the Internet may subject Azul, our subsidiaries and affiliates to sanctions and penalties, including compensation, which will be determined based on the severity of the violation and the economic condition of the offender, among other factors. Laws on privacy and personal data protection have evolved in recent years to establish more objective rules on how the personal data of natural persons may be used by organizations. Thus, until the enactment of the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, Law No. 13,709/2018), or the LGPD, there was no general statute establishing detailed rules on the processing of personal data, regardless of the medium in which the data is stored or the sector responsible for its use. The LGPD was published in the Federal Official Gazette on August 15, 2018 and was amended by Provisional Measure MP 869, issued by the President of Brazil in December 2018. The LGPD came into force in a staggered manner, (i) in December 2018, the articles relating to the creation of the Brazilian Data Protection Agency (Agência Nacional de Proteção de Dados), or the ANPD, and the Brazilian Council for the Protection of Personal Data and Privacy (Conselho Nacional de Proteção de Dados Pessoais e da Privacidade), or the CNPD – Article 55-A to Article 58-B; (ii) in September 2020, the other articles of the law, except those relating to the application of administrative sanctions; (iii) in August 2021, the articles dealing with administrative sanctions (Article 52 to Article 54). Furthermore, since the LGPD’s effectiveness, several regulations, directives and guidelines have been issued by the ANPD, including those concerning procedures in the event of data breaches affecting personal data and international data transfers. The LGPD brings about major changes in activities involving personal data processing, with guiding principles and a set of rules to be observed in the collection, processing, storage, use, transfer, sharing and erasure of information concerning identified or identifiable natural persons. The LGPD has a broad scope of application and extends to natural persons (provided the processing is for economic purposes) as well as to public and private entities, regardless of the country in which they are headquartered or where the data is hosted, provided that: (i) the data processing takes place in Brazil; (ii) the data processing activity aims to offer or provide goods or services to, or process data of, individuals located in Brazil; or (iii) the data subjects are located in Brazil at the time their personal data is collected. The LGPD encompasses all operations that involve personal data, regardless of industry or business sector, and it is not limited to data processing activities carried out through digital media and/or the internet. In this context, the LGPD introduced a range of principles and obligations that require institutions to adopt governance and organizational measures to ensure compliance. For instance, organizations must appoint a data protection officer, conduct data mapping of all processing activities, carry out legitimate interest assessments, and adopt an effective privacy governance structure with policies on privacy, information security, data disposal and retention, among others. Furthermore, as required by the LGPD, organizations must only process personal data under an adequate legal basis and for legitimate purposes. Azul S.A. 99 The ANPD, was created in 2018, which will have equivalent activities to the European data protection authorities, exercising the triple role of (i) oversight, being able to issue norms and procedures, deliberate on the interpretation of the LGPD and request information to controllers and processors; (ii) supervisory and enforcement, in cases of noncompliance with the law, through an administrative process; (iii) regulatory, by issuing rules and procedures that detail its interpretation of the LGPD; and (iv) education, disseminating knowledge about the Act and security measures, stimulating standards for services and products that facilitate control of data subjects, and elaborating studies on national and international practices for the protection of personal data and privacy, amongst others. In September 2025, the Provisional Measure No. 1,317/2025 was enacted to formally convert the ANPD into an autonomous regulatory agency linked to the Ministry of Justice and Public Security (MJSP). Since 2022, the ANPD had been operating under the special autarchy regime but was, during that period, institutionally linked to the Presidency of the Republic. Independent functional, technical, administrative, and financial authority had already been guaranteed under its former status, but now the ANPD has a governance structure consistent with Law No. 13,848/2019, the federal regulatory framework applicable to Brazilian agencies. This enhanced institutional structure is expected to increase the Agency’s capacity, promote greater predictability, and reinforce the enforcement environment applicable to entities that process personal data within the country. In order to strengthen privacy controls and protect personal data in accordance with the LGPD and GDPR (European Union General Data Protection Regulation), Azul implemented the OneTrust platform in 2021. The OneTrust platform is designed to ensure the proper application of adequate processes and enhanced controls for managing data processing activities. Azul has also appointed a Data Protection Officer (DPO) and established a dedicated team focused on privacy and data protection matters. Additionally, an exclusive channel was made available on Azul’s official website to address data subjects requests and a privacy notice disclosed in compliance with the LGPD’s principles. Concerning international data transfers, in January 2026, Brazil and the European Union mutually recognized that both jurisdictions provide an essentially equivalent level of protection for personal data. Under Article 45 of the GDPR and Article 33(I) of Brazil’s LGPD, countries may concurrently issue adequacy decisions allowing the free flow of personal data without the need for additional safeguards, such as Standard Contractual Clauses or Binding Corporate Rules, thereby streamlining cross border transfers between the two regions. In Brazil, the mechanism is further regulated by ANPD Resolution CD/ANPD No. 19/2024, which also outlines the other mechanisms approved to safeguard international data transfers and their respective rules. This mutual recognition enhances legal certainty, reduces compliance burdens for Azul, and strengthens bilateral cooperation in data protection by ensuring that transfers occur within a framework supported by robust regulatory guarantees. Noncompliance with the LGPD or related regulations by Azul or any third parties processing personal data on our behalf, could result in the following administrative sanctions: (i) a warning, with an indication of a deadline for adopting corrective measures; (ii) a simple fine of up to 2% of the revenue in the previous fiscal year and daily fines, both limited to a total of BRL 50,000,000.00 (fifty million Brazilian reais) per violation; (iii) public disclosure of the violation, once duly investigated and confirmed, which may result in significant and immeasurable reputational damage; (iv) blocking of the personal data related to the violation until the situation is remedied; (v) deletion of the personal data related to the violation; (vi) partial suspension of the database related to the violation for up to six months, extendable for an equal period; (vii) suspension of the data processing activity related to the violation for up to six months, extendable for an equal period; and (viii) partial or full prohibition of activities related to the processing of personal data. Simplification of bureaucracy affecting the industry On June 14, 2022, Law No. 14,368/2022 was published, resulting from the conversion of Provisional Measure No. 1,089/2021. The regulation restructured the aviation sector aiming to modernize and reduce bureaucracy in processes and procedures, promoting greater efficiency in service delivery and encouraging market development. 100 Azul S.A. Among the main highlights of Law No. 14,368/2022 are the elimination of the differentiation between public and private air services, as well as the waiver of concession contracts for airlines. Additionally, it is no longer necessary to obtain authorization for the operation of foreign companies, nor is there a prior obligation for the construction of aerodromes. The regulation also simplified the registration of less complex aircraft in the RAB and facilitated the recognition of certifications issued by foreign authorities for imported aircraft. Aircraft Repossession On March 1, 2012, Brazil ratified the Cape Town Convention, which created a system of international registration of legal interests in aircraft and engines. This convention has been ratified and published by Presidential Decree 8008, dated May 15, 2013, and was regulated by ANAC through Resolution No. 309, of March 18, 2014. The Cape Town Convention is intended to standardize transactions involving movable property. The treaty creates international standards for registration of ownership, security interests (liens), leases and conditional sales contracts, as well as various legal remedies for default in financing agreements, including repossession and provisions regarding how the insolvency laws of the signatory states will apply to registered aircraft and engines. The Convention provides specific remedies such as the Irrevocable Deregistration and Export Request Authorization, which allows recovery of the aircraft in case of default and insolvency. The Brazilian Aeronautical Registry (Registro Aeronáutico Brasileiro – RAB) has been appointed as the responsible authority regarding the international registry in Brazil. Although the Cape Town Convention has been duly internalized into the Brazilian legal system with the status of an ordinary law, further specific rules relating to the export of aircraft in accordance with the Cape Town Convention, especially upon enforcement of an Irrevocable Deregistration and Export Request Authorization in an event of default under financing or lease agreements, are pending further regulations to be issued by the Government of Brazil. The lack of regulations, at this state, is not likely to prevent export of aircraft in accordance with the Cape Town Convention entirely, but may represent an increase in the time required for actual export of aircraft. Government Insurance In response to substantial increases in insurance premiums to cover risks related to terrorist attacks following the events of September 11, 2001 in the United States, the Brazilian government enacted Law No, 10,744/2003, authorizing the government to assume civil liability to third parties for any injury to goods or persons, whether or not passengers, caused by terrorist attacks or acts of war against Brazilian aircraft operated by Brazilian airlines in Brazil or abroad. This statutory coverage is limited to an amount of US$1 billion. In addition, under the above mentioned legislation, the Brazilian government may, at its sole discretion, suspend this assumption of liability at any time, provided that it gives seven days’ notice of the suspension. Brazil is currently the sole jurisdiction worldwide still providing such statutory coverage to its registered fleet. We maintain all other mandatory insurance coverage for each of our aircraft and additional insurance coverage as required by lessors. See “Item 4.B. Business Overview—Insurance.” U.S. and International Regulation Operational Regulation The airline industry is heavily regulated by the U.S. government. Two of the primary regulatory authorities overseeing air transportation in the United States are the DOT and the FAA. The DOT has jurisdiction over economic issues affecting air transportation, such as unfair or deceptive competition, advertising, baggage liability and disabled passenger transportation. The DOT has authority to issue permits required for airlines to provide air transportation. We hold an open skies foreign air carrier DOT permit authorizing us to engage in scheduled air transportation of passengers, property and mail to and from certain destinations in the United States. Azul S.A. 101 The FAA is responsible for regulating and overseeing matters relating to air carrier flight operations, including airline operating certificates, aircraft certification and maintenance and other matters affecting air safety. The FAA requires each commercial airline to obtain and hold an FAA air carrier certificate and to comply with Federal Aviation Regulations 129 and 145. This certificate, in combination with operations specifications issued to the airline by the FAA, authorizes the airline to operate at specific airports using aircraft approved by the FAA. As of December 31, 2017 ALAB has FAA operations specifications approved as Part 129 to use Airbus A330-200 in scheduled flights to the U.S. We have also obtained the necessary FAA authorization to fly to Fort Lauderdale and Orlando. We hold all necessary operating and airworthiness authorizations, certificates and licenses and are operating in compliance with applicable DOT, FAA and applicable international regulations, interpretations and policies. Customs and Border Protection Our service to the U.S. is also subject to U.S. Customs and Border Protection, or CBP (a law enforcement agency that is part of the U.S. Department of Homeland Security), immigration and agriculture requirements and the requirements of equivalent foreign governmental agencies. Like other airlines flying international routes, from time to time we may be subject to civil fines and penalties imposed by CBP if unmanifested or illegal cargo, such as illegal narcotics, is found on our aircraft. These fines and penalties, which in the case of narcotics are based upon the retail value of the seizure, may be substantial. We have implemented a comprehensive security program at our airports to reduce the risk of illegal cargo being placed on our aircraft, and we seek to cooperate actively with CBP and other U.S. and foreign law enforcement agencies in investigating incidents or attempts to introduce illegal cargo. Security Regulation The TSA was created in 2001 with the responsibility and authority to oversee the implementation, and ensure the adequacy, of security measures at airports and other transportation facilities in the United States. Since the creation of the TSA, airport security has seen significant changes including enhancement of flight deck security, the deployment of federal air marshals onboard flights, increased airport perimeter access security, increased airline crew security training, enhanced security screening of passengers, baggage, cargo and employees, training of security screening personnel, increased passenger data to CBP and background checks. Funding for passenger security is provided in part by a per enplanement ticket tax (passenger security fee) of $5.60 per one-way trip in air transportation that originates at an airport in the U.S., except that the fee imposed per round trip shall not exceed $11.20. The TSA was granted authority to impose additional fees on air carriers if necessary to cover additional federal aviation security costs. Pursuant to its authority, the TSA may revise the way it assesses this fee, which could result in increased costs for passengers and/or us. We cannot forecast what additional security and safety requirements may be imposed in the future in the United States or in the EU, or the costs or revenue impact that would be associated with complying with such requirements. The TSA also assess an Aviation Security Infrastructure Fee on each airline. Voluntary Reorganization Prior to the Chapter 11 Cases, our capital structure included a combination of bonds and other indebtedness issued in the international capital markets and the local Brazilian debt markets, as well as obligations owed to lessors and OEMs. These obligations spanned various maturities, currencies, priority levels and collateral packages, and involved a broad range of financial institutions, capital markets investors and lessors. We operate in a highly capital-intensive industry and rely on financing and working capital to acquire aircraft and support operations. This business model makes us sensitive to changes in macroeconomic conditions and market demand. In addition, our cost and revenue profile heightens our exposure to currency volatility: while we generate a significant portion of our cash flows in Brazilian reais, we incur substantial expenses and liabilities—such as interest expense and aircraft lease obligations—primarily denominated in U.S. dollars. In the years preceding the COVID-19 pandemic, we experienced significant growth and expanded our route network and operations. Since 2020, however, like other airlines, we have faced a combination of demand shocks and broader macroeconomic and industry-specific headwinds that have strained liquidity and operating performance. 102 Azul S.A. Beginning in 2020, the COVID-19 pandemic had a significant adverse effect on the global aviation industry, including us. The pandemic resulted in travel restrictions, reduced passenger demand and periods of market disruption. In April 2020, we reduced planned capacity by approximately 93% compared to pre-pandemic levels. The pandemic also contributed to significant volatility in Brazilian and international financial markets, including with respect to exchange rates and interest rates, which in turn affected our costs and financing profile. In 2024, we faced heightened volatility in commodity prices and foreign exchange markets, including significant depreciation of the Brazilian real against the U.S. dollar. At the same time, elevated inflation, higher interest rates and supply chain disruptions—particularly those affecting aircraft and engine maintenance—contributed to increased operating and financing pressures. Our total indebtedness increased significantly compared to 2019 levels, reflecting the financing requirements of the post-pandemic operating environment. In addition, Brazil’s broader political and economic uncertainty contributed to fluctuations in inflation expectations and interest rates, which impacted consumer demand and our cost of capital. During this period, aircraft and engine manufacturers and their suppliers also experienced disruptions that affected aircraft and engine availability globally, including delivery delays, manufacturing constraints, maintenance backlogs and performance issues across certain aircraft and engine platforms. These disruptions limited fleet growth and replacement options, increased competition for available aircraft and engines and contributed to higher leasing and maintenance costs. We estimate that OEM- and supply-chain-related disruptions resulted in an adverse total revenue impact of approximately R$3,700.0 million in 2024. In April and May 2024, severe flooding in the State of Rio Grande do Sul disrupted economic activity and transportation infrastructure in the region. The event affected a significant number of municipalities and resulted in operational disruptions for airlines serving the area, including us. During the disruption, we suspended service on more than 12 routes and adjusted our network and operations in response to reduced demand and infrastructure constraints. We estimate that these disruptions affected approximately 10% of our operations during the relevant period and contributed to increased costs and operational complexity, including with respect to customer claims and other contingencies. Customer litigation in Brazil represents an ongoing operating consideration for Brazilian airlines, including us, due to the volume and frequency of legal and administrative claims relating to consumer protection and passenger rights. As is common for companies operating in Brazil, we face a significant number of lawsuits and administrative proceedings initiated by individual plaintiffs. As of the commencement of the Chapter 11 Cases, approximately 85,000 litigation claims were pending against us and our subsidiaries that filed for the Chapter 11 Cases (the “Debtors”). The volume of such claims increased our costs, required management attention and contributed to uncertainty in forecasting and liquidity planning. In response to the economic and operating pressures described above, we pursued a series of restructuring and capital-raising initiatives between 2020 and 2025. In addition to accessing the Brazilian and international capital markets, we negotiated with lessors, suppliers, vendors and airport operators to obtain concessions and other commercial accommodations. We also sought to enhance network economics through route and capacity adjustments and, where applicable, renegotiated certain commercial terms with counterparties, including through changes in service levels, passenger volumes and equipment deployment. While these efforts provided incremental liquidity and temporary relief, they were undertaken amid continued operating pressures and a highly leveraged balance sheet. Ultimately, the cumulative effect of these challenges, together with the limitations of out-of-court solutions, led us, on May 28, 2025, to commence the Chapter 11 Cases as a comprehensive in-court Voluntary Reorganization to implement a broader recapitalization and deleveraging transaction, with the support of our key stakeholders, including a group of supporting bondholders (the “Backstop Commitment Parties”), AerCap, our largest aircraft lessor (representing the majority of our lease liabilities) and the Strategic Partners. The Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan on December 19, 2025 (the “Confirmation Date”). On February 20, 2026 (which we refer to herein as the Effective Date), the Plan became effective and we emerged from the Chapter 11 Cases. Azul S.A. 103 The Voluntary Reorganization contemplated by the Plan significantly strengthened our financial position and enhanced our long-term competitiveness. Upon emergence from the Chapter 11 Cases, we reduced total funded debt by approximately US$1.1 billion and reduced aircraft lease liabilities by nearly 40%, resulting in an estimated reduction of more than 50% in annual interest expense compared to pre-Chapter 11 levels and an approximately one-third reduction in recurring aircraft leasing obligations. The Voluntary Reorganization process was completed in less than nine months — a substantially shorter timeframe than many other airline restructurings — and we continued operating approximately 800 flights per day throughout the Chapter 11 Cases without operational disruption. Despite the Voluntary Reorganization, we achieved our 2025 operational targets and delivered record performance, carrying 32 million customers in 2025, the highest number in our history. We were recognized as the fourth most on-time airline in the world in 2025 according to Cirium. As of December 31, 2025, we served around 160 destinations through more than 390 non-stop routes and operated a fleet of almost 180 aircraft. With our emergence from the Chapter 11 Cases, we remain focused on delivering high-quality service to our customers and generating sustainable returns for our investors. Our business is supported by a highly diversified operating model — including Azul Cargo, Azul Viagens and the Azul Fidelidade loyalty program — a modern and fuel-efficient fleet comprised of approximately 80% next-generation aircraft, strong brand recognition in Brazil, and international strategic partnerships. The Voluntary Reorganization was implemented through a series of coordinated steps designed to strengthen our balance sheet, streamline our fleet and reposition our capital structure, including: (i) a comprehensive global settlement with AerCap and its affiliates, our largest aircraft lessor counterparty (the “AerCap Global Settlement”); (ii) the assumption, amendment or rejection of selected aircraft lease agreements to improve commercial terms and enhance operational flexibility (the “Fleet Restructuring”); (iii) a US$671 million senior, secured, superpriority, priming debtor-in-possession credit facility (the “DIP Facility”) and subsequent refinance thereof through the issuance of the Exit Notes; (iv) the conversion of approximately US$1.8 billion of 1L Notes Claims, Convertible Debentures Claims and 2L Notes Claims into Equity (the “Equitization of 1L/2L Claims”); (v) a new governance structure; (vi) the establishment of a trust for the benefit of certain holders of general unsecured claims (the “GUC Trust”), which received, holds and administers assets including cash holdings, GUC Warrants and contingent value rights (together, the “GUC Assets”) on behalf of the beneficiaries of the GUC Trust; (vii) a US$850 million equity issuance, including US$650 million backstopped by the Backstop Commitment Parties, US$100 million provided by United and US$100 million provided by additional committed investors (the “Additional Investment Holders”) pursuant to an equity offering in Brazil (the “Equity Rights Offering”), as well as a US$100 million investment to be provided by American upon the exercise of the American Warrants; (viii) the Additional Investment Warrants; and (iv) the adoption of a new governance structure, including the Conversion. Each of these elements is summarized below. AerCap Global Settlement As part of the Plan, we entered into the AerCap Global Settlement on August 13, 2025. The AerCap Global Settlement resolved substantially all pre-petition disputes, amended or reaffirmed our aircraft and engine lease obligations with AerCap, provided for AerCap’s participation in our DIP Facility, and established the treatment of AerCap’s claims under the Plan. Under the AerCap Global Settlement, approximately US$46 million of AerCap’s existing secured debt was rolled into our DIP Facility, and AerCap received DIP Facility liens, and super-priority administrative claims on a pari passu basis with other rolled-up DIP Facility claims, subject to customary voting and consent rights. In addition, AerCap received full access to DIP Facility reporting, budgets, business and fleet plans prepared in connection with the Plan process, subject to applicable confidentiality restrictions. Upon our emergence from the Chapter 11 Cases, AerCap’s rolled-up DIP Facility claim received the same treatment as other DIP Facility claims under the Plan. AerCap was further granted a general unsecured claim against each of us and ALAB in the aggregate amount of US$541.9 million with treatment substantially similar to the treatment provided to our other general unsecured creditors under the Plan. 104 Azul S.A. The AerCap Global Settlement established the treatment of AerCap’s leases and related agreements. All aircraft and engine leases beneficially owned or managed by AerCap were either assumed or assumed as amended pursuant to section 365 of the U.S. Bankruptcy Code. With respect to leases that were amended, we agreed to incorporate a customary covenant restricting the incurrence of certain first-lien secured indebtedness, consistent with market practice and the terms of our Exit Notes. The AerCap Global Settlement further provides AerCap with the right to designate a non-voting observer to our board of directors (the “Board Observer”) for so long as AerCap or its affiliates remain a lessor or lease manager for any aircraft we lease from AerCap. The Board Observer may be reviewed by our board every two years following nomination, has no voting rights, and does not participate in deliberations in which Aercap may have an actual or potential conflict of interest. The AerCap Global Settlement includes broad mutual releases. AerCap released us from all claims relating to pre-petition periods, subject to customary carve-outs for post-petition obligations, and we released AerCap from all pre-petition claims and disputes relating to aircraft, leases and related documents, in each case subject to customary carve-outs. Collectively, these arrangements provided stability to our post-emergence fleet structure and materially contributed to the successful implementation of the Plan. Fleet Restructuring As part of the Plan, we implemented the Fleet Restructuring, which aligned our fleet composition and lease profile with our post-emergence network and profitability objectives, reduced above-market lease rates, extended or re-balanced aircraft tenors where appropriate, and removed underperforming or sub-scale aircraft types from our fleet. These measures allowed us to normalize our lease cost structure relative to current market conditions, simplify maintenance and parts inventories, and position our fleet for more efficient capacity deployment across our domestic and international operations. The resulting fleet profile provides greater flexibility to adjust utilization and aircraft rotations in response to demand, fuel prices and broader macroeconomic conditions. DIP Facility and Exit Notes As part of the Plan, the Debtors obtained Bankruptcy Court approval for a senior, secured, superpriority, priming debtor-in-possession credit facility (which we refer to herein as the DIP Facility) in an aggregate original principal amount of up to US$1,571.0 million, which provided post-petition liquidity to support operations during the Chapter 11 process and to fund certain restructuring-related transactions. The DIP Facility was structured to include (i) up to US$1,460.0 million of new-money commitments and (ii) up to US$111.0 million of “roll-up” amounts. The new-money commitments consisted of (x) up to US$671.0 million of new-money working capital financing, (y) US$676.0 million of new-money financing to repay US$525.0 million aggregate principal amount of Azul Secured Finance floating-rate superpriority notes due 2030; and (z) US$113.0 million of new-money financing to repay R$600.0 million aggregate principal amount of Azul Secured Finance II 13.5% Brazilian real-denominated secured notes due 2025 (in each case, as set forth in the DIP Facility documentation and the initial approved budget). The roll-up amounts consisted of (x) up to US$46.0 million of AerCap secured obligations and (y) up to US$65.0 million of Convertible Debentures secured obligations, in each case rolled into the DIP Facility pursuant to the terms of the DIP Facility documentation and the applicable Bankruptcy Court orders. On February 6, 2026, Azul Secured Finance issued the Exit Notes at an issue price to investors of 99.028% of the principal amount thereof. The Exit Notes are guaranteed by the other Exit Notes Obligors. The Exit Notes are secured by first‑priority liens on a collateral package comprising certain receivables generated by Azul Fidelidade (our loyalty program), Azul Viagens (our travel package business) and Azul Cargo (our cargo business), as well as certain brands, domain names and other intellectual property used by our airline business, Azul Fidelidade, Azul Viagens and Azul Cargo, as well as shares and/or quotas (as applicable) of certain of our subsidiaries. We used the proceeds of the offering of the Exit Notes to repay the outstanding principal amount under the DIP Facility notes, and to support the implementation of the Plan, optimize our capital structure and enhance our liquidity position. Azul S.A. 105 The offering of the Exit Notes and the related guarantees was not registered under the Securities Act or under any other federal or state securities laws of the United States and was conducted pursuant to exemptions from, or through transactions not subject to, the registration requirements of the Securities Act, including pursuant to Rule 144A under the Securities Act and Regulation S under the Securities Act (“Regulation S”). On February 20, 2026, we prepaid in full US$1,443,879,142.17 in aggregate principal amount of its DIP Facility notes at a mandatory prepayment price of approximately 100.8% of the principal amount thereof, plus accrued and unpaid interest thereon. Equitization of 1L/2L Claims Prior to the Confirmation Date, the holders of 1L Notes Claims and 2L Notes Claims assigned their claims to the relevant Creditors’ Entity in exchange for equity interests therein. These assignments were deemed effective upon entry of the Confirmation Order, resulting in each Creditors’ Entity becoming the sole holders of the applicable claims, with each creditor’s interest in the relevant Creditors’ Entity proportional to the principal amount contributed. On January 6, 2026, our shareholders approved amendments to our bylaws at an extraordinary general shareholders’ meeting (assembleia geral extraordinária) to increase our authorized capital. These amendments removed limitations on the number of common shares issuable within our authorized capital and enabled the issuance of the common shares and preferred shares required to be issued for the purposes of the Equitization of 1L/2L Claims. In order to implement the Equitization of 1L/2L Claims Pursuant to the Plan, the Company conducted a primary public offering of common shares and preferred shares pursuant to the automatic registration procedure under Resolution 160 of the CVM (the “Equitization Offering”). The claims subject to the Equitization of 1L/2L Claims were used to subscribe for the common shares and preferred shares issued in the Equitization Offering. The Equitization Offering was conducted with priority subscription rights granted to existing shareholders of the Company. The Equitization Offering was launched on December 22, 2025 and closed on January 9, 2026. Pursuant to the Equitization Offering, the Company issued 723,861,340,715 common shares and 723,861,340,715 preferred shares at a price of approximately R$0.00013527 per common share and a price of R$0.01014509 per preferred share. The Equity Offering was also accompanied by the issuance of warrants to subscribe for common shares and preferred shares of Azul to subscribers who subscribed for shares in the Equitization Offering. On January 14, 2026, the Company issued 7,018,994,185,085 preferred shares and 10,390,846,154,360 common shares in satisfaction of the warrant exercises at an exercise price of approximately R$0.00006655 per preferred share or common shares. Any unexercised warrants issued in connection with the Equitization Offering have expired worthless and are no longer outstanding. As a result of the Equitization Offering, approximately US$1.6 billion of first lien and second lien secured claims against the Debtors were converted into equity of the Company. In aggregate, the common shares and preferred shares issued by us as described in this paragraph, after giving effect to the Conversion, represent approximately 14.4% of our outstanding common shares on the date of this annual report. The Equitization Offering was not registered under the Securities Act or under any other federal or state securities laws of the United States and was conducted pursuant to exemptions from, or through transactions not subject to, the registration requirements of the Securities Act, including pursuant to Section 1145 of the Bankruptcy Code and Regulation S. Approximately US$200 million of first lien secured claims against the Debtors arose from Convertible Debentures Claims. On January 7, 2026, at a debentureholders’ meeting, holders of the Convertible Debentures approved the mandatory conversion of the Convertible Debentures (the “Debenture Conversion”) as contemplated by the Plan. On January 19, 2026, the Company issued 102,087,603,241,650 common shares pursuant to the Debenture Conversion, which number of common shares was calculated to reflect the impact of the Conversion and the First Reverse Share Split, which is the equivalent of 1,361,168,043,222 common shares following the First Reverse Share Split (or approximately 2.5% of our outstanding common shares on the date of this annual report). 106 Azul S.A. The number of shares issued pursuant in the Equitization Offering was calculated to deliver the Plan-mandated allocations: (i) 97% of the common shares to holders of 1L Notes Claims and Convertible Debentures Claims; and (ii) 3% to holders of 2L Notes Claims, in each case, subject to dilution upon the Equity Rights Offering. Only principal amounts were considered for allocation purposes. Following completion of the Equitization Offering and subsequent steps, the common shares held by the Creditors’ Entities were registered directly in the names of the underlying holders of 1L Notes Claims and 2L Notes Claims. After giving effect to the Conversion and the First Reverse Share Split (i) the holders of the 1L Notes Claims and the 2L Notes Claims (other than the Convertible Debentures Claims) held 7,891,051,625,734 common shares (or approximately 14.4% of our outstanding common shares as of the date hereof), and (ii) the holders of Convertible Debentures Claims held 1,361,168,043,222 common shares (or approximately 2.5% of our outstanding common shares as of the date hereof). Governance Changes As part of our Voluntary Reorganization, we implemented a new corporate governance framework designed to strengthen oversight, enhance strategic decision-making and better align the interests of our stakeholders with our long-term performance. The new governance structure includes revised bylaws, amended board composition, enhanced roles and responsibilities for our board of directors and executive officers, the establishment of an autonomous and independent statutory Strategy Committee, updated shareholder rights provisions, and a management incentive plan aligned with our post-emergence objectives. In addition, as part of the governance and capital structure simplification implemented pursuant to the Plan, we transitioned to a single-class share structure. Prior to completion of the Voluntary Reorganization, our share capital consisted of common shares (which were primarily held by our founder and Chairman of the Board) and non-voting preferred shares (except for certain limited matters), with preferred shares convertible into common shares at a ratio of 75 common shares for one preferred share. At an extraordinary general meeting (assembleia geral extraordinária) held on January 12, 2026, our shareholders approved the Conversion, which became effective on January 15, 2026. As a result, our entire issued share capital now consists solely of common shares, each carrying one vote, and only common shares are listed on the B3. To further rationalize our capital structure and reduce the number of outstanding shares following the Conversion, we effected the First Reverse Share Split at a ratio of 75 pre-split common shares for one post-split common share, which was approved at an extraordinary general meeting (assembleia geral extraordinária) held on February 12, 2026 and became effective on February 18, 2026. The First Reverse Share Split did not change the amount of our share capital. A corresponding reverse share split of our ADSs was implemented as a result of the First Reverse Share Split (the “ADS Reverse Share Split”). These changes are intended to support our capital structure, improve accountability and transparency, and position us to execute our business plan following our emergence from the Chapter 11 Cases. The principal elements of this new governance framework are described in more detail under “Item 6.A. Directors and Senior Management—Board of Directors,” “—Board of Executive Officers” and “—Strategy Committee,” “Item 6.B. Management Compensation —Management Incentive Plan” and “Item 10.B. Memorandum and Articles of Association.” General Unsecured Creditors The treatment of general unsecured creditors in the Chapter 11 Cases varied based on the size of their claims. Creditors with general unsecured claims equal to or less than US$12.5 million were entitled to receive a pro rata share of a US$3.0 million cash pool. In contrast, general unsecured creditors with claims greater than US$12.5 million (the “Eligible Unsecured Holders”) were entitled by default to receive a pro rata share of a US$20.0 million cash pool (the “Cash-Out Pool”). However, Eligible Unsecured Holders had the option to elect participation in the GUC Trust, which was established on February 19, 2026 for their benefit, by selecting this option in their ballot when voting on the Plan. Eligible Unsecured Holders who elected to participate in the GUC Trust received their pro rata interest in the assets held by the GUC Trust. For those Eligible Unsecured Holders who did not elect to participate in the GUC Trust, their entitlement was limited to a distribution from the Cash-Out Pool, in accordance with the terms set forth in the Plan. Azul S.A. 107 The GUC Trust received, and now holds and administers, the following assets: •US$2.5 million in cash holdings; •1,231,164,424,677 GUC Warrants to purchase 1,231,164,424,677 common shares (or ADSs representing such common shares), which number of common shares is equal to 2.2% of our total outstanding common shares on the Effective Date (taking into account all common shares issued as part of the Voluntary Reorganization, including those issued through the Equitization Offering and the Equity Rights Offering, and any shares issued upon the exercise of preemptive rights under these offerings, but excluding shares issued under our MIP). The GUC Warrants are exercisable at any time during the five-year period following the Effective Date, with an exercise price equal to the Brazilian reais equivalent on the exercise date to US$0.0000694306713902942 per common share set based on an equity valuation of US$3.8 billion, such exercise price being subject to certain adjustment events; and •a non-transferable contingent value note providing for annual payments of US$6.5 million for each of the fiscal years ending December 31, 2027, 2028 and 2029, subject satisfying the following financial metrics for the relevant fiscal year: ◦generating consolidated EBITDAR (i.e., EBITDA adjusted according to our business plan following emergence from the Chapter 11 Cases) of at least R$8,549.0 million for 2027, R$9,160.0 million for 2028, and R$9,537.0 million for 2029; ◦having unrestricted cash and cash equivalents of at least R$3,238.0 million as of December 31, 2027, R$5,122.0 million as of December 31, 2028, and R$6,967.0 million as of December 31, 2029 (with such amounts increased by the amount of any proceeds received by us from the TAP Bonds at any time prior to the end of the relevant fiscal year); and ◦having a maximum net debt to EBITDAR ratio of 2.48x in 2027, 2.00x in 2028, and 1.68x in 2029 (with such ratio being adjusted to reflect the amount of any proceeds received by us from the TAP Bonds at any time prior to the end of the relevant fiscal year), provided that ◦on the date upon which there are no disputed Claims remaining in class 6 of the Plan, which shall be no later than April 20, 2026, the Annual CVR payment shall be reduced on a pro rata basis to the extent not all the Eligible Unsecured Holders elect to participate in the GUC Trust, provided that such reduction shall be made in consultation with the US Bank, National Association (the “GUC Trustee”); and ◦if any annual payment is not made with respect to any fiscal year as a result of the failure to satisfy the minimum cash test and/or the maximum net debt to EBITDA ratio test (i.e. the EBITDAR test for the relevant annual payment was satisfied), then we shall be required to re-test the minimum cash test and the maximum net debt to EBITDA test as of the end of each fiscal year through to and including the fiscal year ending December 31, 2030 (with the conditions tested using the 2029 thresholds specified above), except that if the 2027 annual payment is not made, then the catch-up obligation only applies until December 31, 2029. If all the conditions are satisfied, we shall be required to make a catch-up annual payment in addition to the annual payment for the most recently ended fiscal year. The GUC Trust has the sole authority and power to distribute its net assets to its beneficiaries based on their pro rata interests in the GUC Trust. The Trust will make these distributions in accordance with the Plan, the Confirmation Order, and the GUC Trust agreement. All payments will be made only to the extent that the GUC Trust has sufficient assets to do so, after accounting for any reserves the GUC Trustee may establish as necessary under the Plan. 108 Azul S.A. The GUC Trust will manage its reserves and make distributions from the net assets of the Trust. Any reserve accounts that the GUC Trustee establishes will be used to ensure that future liabilities are met, including potential adjustments to the distribution amounts as required by the Plan. Once the GUC Trust has completed its distributions and resolved all outstanding claims, it will enter a process of liquidation and dissolution. This process will be overseen by the GUC Trust trustee, who will ensure that any remaining assets of the GUC Trust are appropriately distributed and that all legal obligations are satisfied. Once all assets have been distributed and all necessary administrative tasks are completed, the GUC Trust will be formally dissolved. Following the expiry of the preemptive rights exercise period, around the date of this annual report, we will issue the relevant GUC Warrants to the GUC Trust and issue GUC Warrants to any existing shareholders that validly exercised their preemption rights to subscribe for GUC Warrants. Equity Rights Offering The Equity Rights Offering was launched on February 3, 2026 and closed on February 20, 2026 pursuant to the Plan and related agreements, including the backstop commitment agreement, dated July 31, 2025, as amended and restated on November 4, 2025 and February 17, 2025 (the “Backstop Commitment Agreement”), the equity investment agreements dated November 7, 2025, as amended and restated on February 17, 2025 (the “Equity Investment Agreements”), and the additional investment agreement dated February 17, 2026 (the “Additional Investment Agreement”). See “—Backstop Commitment Agreement—Equity Investment Agreements—Additional Investment Agreements.” In total, the Equity Rights Offering generated cash proceeds of R$4,987,045,576.68, funded by the Backstop Commitment Parties, United, and other participants, upon the issuance of 45,477,707,683,900 common shares (or approximately 82.8% of our outstanding common shares on the date of this annual report) at a price of R$0.000109656646388772000 per common share. As detailed below, the investment of American into Azul is expected to be made pursuant to the American Warrants. See “—Equity Investment Agreements—American Warrants.” Common shares were required to be subscribed for cash or, for certain lenders and noteholders under our DIP Facility, by delivering DIP Facility notes. Settlement of common shares subscribed through the exchange of claims occurred outside the B3 settlement systems via procedures administered by our share registrar. Cash subscribers settled through the B3’s systems. As part of the aforementioned number of common shares issued in the Equity Rights Offering, (i) United acquired 4,775,816,000,000 common shares (or approximately 8.7% of our outstanding common shares as of the date hereof) for a subscription price equivalent to US$100 million pursuant to Equity Investment Agreement entered with United, (ii) the Additional Investment Holders acquired 4,847,450,307,051 common shares (or approximately 8.8% of our outstanding common shares on the date of this annual report) for a subscription price equivalent to US$100 million pursuant to the Additional Investment Agreement, and (iii) R$44.1 million of gross proceeds was provided to the Company through the exercise of preemption rights by existing shareholders). As described below, the investment by American into the Company is to be made pursuant to the American Warrants. See “Equity Investment Agreements—Additional Investment Agreements—American Warrants.” The offering was conducted under CVM Resolution 160, the Level 2 rules of B3 and applicable ANBIMA standards, with concurrent ADS offerings to non-Brazilian investors under U.S. securities laws. It comprised a priority tranche for shareholders of record and an institutional tranche for professional and foreign investors. Following the Equitization of 1L/2L Cliams, former holders of 1L Notes Claims, Convertible Debentures and 2L Notes Claims became shareholders and received priority rights in the Equity Rights Offering. As required by the Plan, such holders waived those rights as needed to permit the guaranteed institutional allocations, but could participate in the institutional tranche. The Equity Rights Offering was not registered under the Securities Act or under any other federal or state securities laws of the United States and was conducted pursuant to exemptions from, or through transactions not subject to, the registration requirements of the Securities Act, including pursuant to Section 4(a)(2) of the Securities Act and Regulation S. Azul S.A. 109 In connection with the settlement of the Equity Rights Offering, the Company established two series of restricted ADSs pursuant to a restricted ADS letter agreement (common shares), dated as of January 5, 2026 (the “Restricted ADS Letter Agreement”), that was entered into in connection with the deposit agreement (as defined below). Common shares that were offered and sold in the Equity Rights Offering (i) outside the United States to certain investors that were not U.S. persons pursuant to Regulation S are represented by Regulation S restricted ADSs (“Regulation S Restricted ADSs”), and (ii) to certain professional investors in the United States in reliance on Section 4(a)(2) of the Securities Act are represented by Rule 144A restricted ADSs (“Rule 144A Restricted ADSs”). The terms of the Restricted ADS Letter Agreement provide for customary transfer restrictions in connection with the Regulation S Restricted ADSs and the Rule 144A Restricted ADSs (together, the “Restricted ADSs”) that the restrict the circumstances in which common shares underlying the Regulation ADSs can be withdrawn from the ADS program. The Regulation S Restricted ADSs (and the common shares represented thereby) shall cease to be restricted securities within the meaning of Rule 144(a)(3) under the Securities Act with effect from April 1, 2026 (which date is 40 days following the settlement of the Equity Rights Offering). Neither the Rule 144A Restricted ADSs nor the common shares represented thereby were, when issued, of the same class as securities listed on a national securities exchange registered under section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system. Backstop Commitment Agreement In connection with the Plan and to ensure the successful execution of the Equity Rights Offering, we entered into the Backstop Commitment Agreement with the Backstop Commitment Parties on July 31, 2025, which was amended and restated on November 4, 2025 and February 17, 2026. Under the Backstop Commitment Agreement, the Backstop Commitment Parties committed, on a firm-commitment basis, to purchase up to US$650 million of common shares to ensure full subscription of the Equity Rights Offering. As consideration, the Backstop Commitment Parties received a 14% backstop fee payable in common shares at a 30% discount to the Plan equity value. In the aggregate, the Backstop Commitment Parties subscribed for US$650 million of common shares in the Equity Rights Offering. See “—Equity Rights Offering.” Equity Investment Agreements On November 7, 2025, we entered into separate Equity Investment Agreements each of the Strategic Investors, which were amended and restated on February 17, 2026, pursuant to which the Strategic Investors committed to make an aggregate US$200 million equity investment in us. Pursuant to the amended and restated Equity Investment Agreement with United, United funded its US$100 million equity commitment in connection with the Equity Rights Offering. United subscribed for US$100 million of common shares, corresponding to 4,775,816,632,216 common shares issued in the Equity Rights Offering. See “—Equity Rights Offering.” Pursuant to the amended and restated Equity Investment Agreement with American, American’s US$100 million equity commitment is expected to be funded through the exercise of the American Warrants. See “—American Warrants.” The Equity Investment Agreements, as amended and restated, contain provisions customary for transactions of this type, including representations and warranties, covenants and mutual indemnifications. Additional Investment Agreement On February 17, 2026, we entered into the Additional Investment Agreement with the Additional Investment Holders, pursuant to which such parties agreed to make incremental equity investments in connection with the Equity Rights Offering. In the aggregate, the Additional Investment Holders subscribed for US$100 million of common shares, corresponding to 4,847,450,307,051 common shares issued in the Equity Rights Offering. See “—Equity Rights Offering.” 110 Azul S.A. The Additional Investment Agreement contain provisions customary for transactions of this type, including representations and warranties, covenants and mutual indemnifications. American Warrants On February 17, 2026, we and American entered into a warrant agreement, pursuant to which American agreed to subscribe for the American Warrants for an aggregate subscription price of R$1.00, subject to the satisfaction or waiver of certain conditions. Brazilian Corporations Law requires us to grant preemptive rights to its existing shareholders which, upon exercise, will entitle each shareholder the right to purchase a certain number of additional warrants, based on their pro rata equity stake in our share capital We agreed to issue the American Warrants to American no later than two business days following the conclusion of the statutory preemptive rights period (and in any event not more than 50 days following the Effective Date). The American Warrants shall entitle American to subscribe for up to an aggregate of 4,775,816,307,051 common shares (or up to 8.7% of our common shares outstanding on the date of this annual report) for an aggregate exercise price of up to US$100 million, subject to the terms and conditions of the aforementioned agreements. The terms of the warrant agreement provide that American shall be mandatorily required to exercise the American Warrants within 15 business days upon receipt of the approval of the investment by CADE, subject to the terms and conditions of the warrant agreement. Following the expiry of the preemptive rights exercise period, around the date of this annual report, we will issue the relevant American Warrants to American and issue American Warrants to any existing shareholders that validly exercised their preemption rights to subscribe for American Warrants. Additional Investment Warrants On February 17, 2026, we, United and certain of our existing creditors (the “Additional Investment Warrant Holders”) entered into entered into a warrant agreement, pursuant to which United Airlines and the Additional Investment Warrant Holders agreed to subscribe for the Additional Investment Warrants for an aggregate subscription price of R$1.00 per initial holder, subject to the satisfaction or waiver of certain conditions. Brazilian Corporations Law requires us to grant preemptive rights to its existing shareholders which, upon exercise, will entitle each shareholder the right to purchase a certain number of additional warrants, based on their pro rata equity stake in our share capital. We agreed to issue the Additional Investment Warrants to United and the Additional Investment Warrant Holders no later than two business days following the conclusion of the statutory preemptive rights period (and in any event not more than 50 days following the Effective Date). The Additional Investment Warrants shall entitle (i) United to subscribe for an aggregate of up to 716,372,446,058 common shares (or up to 1.3% of our common shares outstanding on the date of this annual report) for an aggregate exercise price of up to US$15 million, and (ii) the Additional Investment Warrant Holders to subscribe for an aggregate of up to 477,581,630,701 common shares (or up to 0.9% of our common shares outstanding on the date of this annual report) for an aggregate exercise price of up to US$10 million (which is equivalent to approximately US$0.00002094 per common share), in each case subject to the terms and conditions of the aforementioned warrant agreement. The Additional Investment Warrants shall be exercisable, in whole or in part, by United and the Additional Investment Warrant Holders during the exercise period which commences on the issue date and ends on the date that is one year from the date that the Additional Investment Warrants are issued by us. Following the expiry of the preemptive rights exercise period, around the date of this annual report, we will issue the relevant Additional Investment Warrants to United, issue the relevant Additional Investment Warrants to the Additional Investment Holders and issue Additional Investment Warrants to any existing shareholders that validly exercised their preemption rights to subscribe for Additional Investment Warrants. Azul S.A. 111 C.Organizational Structure Following the implementation of our Voluntary Reorganization, our shareholding structure became more dispersed and, as a result of the Conversion, we no longer have a controlling shareholder. As of the date of this annual report, our principal shareholders are set forth under “Item 7.A. Major Shareholders and Related Party Transactions—Major Shareholders”. We operate as a holding company and own 100% of our two principal subsidiaries: (i) ALAB; and (ii) IntelAzul S.A. (formerly Tudo Azul S.A.). The following organizational chart sets forth, in summary form, our shareholding structure and our material direct or indirect subsidiaries as of the date of this annual report: ALAB is our original operating subsidiary through which we operate all of our flight activities. ALAB wholly owns Azul Finance LLC and Azul Finance 2 LLC, subsidiaries incorporated in Delaware for the purpose of acquiring next-generation Airbus A320neos from Airbus and E-Jets from Embraer, as well as Azul Finance 3, LLC, a subsidiary incorporated in Delaware in connection with our engine maintenance finance entered into with AerCap. ALAB also wholly owns Azul SOL LLC, a subsidiary incorporated in Delaware, through which ALAB holds the option to purchase six E-Jets under a lease structure, and Blue Sabia LLC, a wholly-owned subsidiary incorporated in Delaware, which subleased certain aircraft to Portugalia – Companhia Portuguesa de Transportes Aéreos, S.A., a subsidiary of TAP. In addition, ALAB wholly owns Azul Viagens, a subsidiary organized in Brazil, which sells travel packages offered by our Azul Viagens business unit. Azul Viagens., since March 2023, wholly owns ATSVP – Viagens Portugal, Unipessoal LDA., an entity incorporated in Portugal, which is currently in the regularization stage to enable the expansion of the activities of the Azul Viagens business unit in Europe. 112 Azul S.A. ALAB wholly owns TwoFlex (rebranded Azul Conecta Ltda.), a domestic airline based in the city of Jundiaí, State of São Paulo, Brazil, which offers sub-regional domestic passenger and cargo service in Brazil, increasing our connectivity. ALAB is also the Managing Partner of Azul Investments, Azul Secured Finance and Azul Secured Finance 2, limited liability partnerships incorporated in Delaware for the issuance of debt securities in the United States. ALAB also wholly owns a non-operating subsidiary, Cruzeiro Participações S.A., located in Brazil. ALAB wholly owns Canela Investments, a limited liability company incorporated in Delaware, which is the parent company of our aircraft operating companies that finance aircraft in U.S. dollars. Canela Investments wholly owns Canela Turbo Three and Canela 336 LLC, limited liability companies incorporated in Delaware. We either acquire aircraft using financing obtained in the United States in U.S. dollars, or in Brazil, in reais, or lease them from third parties. Each aircraft that we purchase through financing in U.S. dollars is owned by a separate subsidiary of Canela Investments. Each subsidiary of Canela Investments owns one such aircraft and leases it to ALAB, whereas aircraft that we purchase through financing in Brazilian reais are held directly by ALAB. Aircraft that we lease from third parties under leases are owned by our relevant counterparty and leased to ALAB. Azul Saira LLC., a wholly-owned subsidiary of ALAB and a co-lessor in the sublease contract entered with Breeze Airways, was established on December 7, 2020, in the United States. We, ALAB, IntelAzul and Azul Viagens, own 100% of the issued ordinary shares in the capital of Azul IP Cayman HoldCo, an exempted company incorporated with limited liability under the laws of the Cayman Islands, except for a single special share by a special shareholder with limited voting rights. Azul IP Cayman HoldCo owns 100% of the issued ordinary shares in the capital of Azul IP Cayman Co, an exempted company incorporated with limited liability under the laws of the Cayman Islands, except for a single special share by a special shareholder with limited voting rights. D.Property, Plant and Equipment We lease all of our facilities at each of the airports we serve. Our leases for our terminal passenger service facilities, which include ticket counter and gate space, operations and maintenance support area, baggage service offices, generally have terms ranging from one to three years and contain provisions for periodic adjustments of lease rates. We expect to either renew these leases or find alternative space that would permit us to continue providing our services. We also are responsible for maintenance, insurance and other facility-related expenses and services. We have also entered into use agreements at each of the airports we serve that provide for the non-exclusive use of runways, taxiways and other facilities. Landing fees under these agreements are based on the number of landings and weight of the aircraft. Our primary corporate offices and headquarters are located in the city of Barueri, state of São Paulo, where we lease 9,241.43 square meters under three lease agreements that expire in December of 2035. We also lease four hangars totaling 29,560.64 square meters for our full capability maintenance center in Belo Horizonte, with expirations up to 2035. We also lease one hangar in Manaus totaling 3,133.20 square meters and one in Cuiabá totaling 2,535.71 square meters for E-Jets and ATR line maintenance with leases expiring in 2026 and an undetermined period, respectively. We also lease one hangar in São Paulo, Congonhas Airport totaling 13,657.43 square meters with leases expiring in 2026. We also lease one hangar in Campinas totaling 92,219.86 square meters, with the lease expiring in 2042. Our training facility for pilot and cabin crew education, UniAzul, located at Viracopos airport has 14,576 square meter is under a lease agreement that expires in 2027. We also lease a 900 square foot office complex, located in Fort Lauderdale within the airport area. Azul S.A. 113 We also lease 9 cargo terminals in Brazil. We lease one cargo terminal in São Paulo, Congonhas Airport totaling 251,475 square meters with the lease expiring in 2026. We lease one cargo terminal in Belo Horizonte, Confins Airport totaling 61,470 square meters with the lease expiring in 2028. We also lease a cargo terminal in Fortaleza, totaling 133,664 square meters with the lease expiring in 2026. We also lease one cargo terminal in Manaus, totaling 83,740 square meters with the lease expiring in 2027. We also lease one cargo terminal in Ribeirão Preto totaling 136,591 square meters with the lease expiring in 2028. We also lease a cargo terminal in Recife, totaling 433,873 square meters with a lease expiring in 2028. We also lease 3 cargo terminals in Campinas, totaling 644,675 square meters with leases expiring in 2028. We have also entered into a lease agreement for an office complex in Fort Lauderdale, United States. Property and equipment are recorded at acquisition or construction cost (which include interest and other financial charges) and are depreciated to estimated residual values over their estimated useful lives using the straight-line method. Under International Accounting Standard, or IAS 16 “Property, Plant and Equipment,” major engine overhauls are treated as a separate asset component with the cost capitalized and depreciated over the period to the next overhaul. In estimating the lives and expected residual values of our airframes and engines, we primarily have relied upon actual experience with the same or similar aircraft types and recommendations from third parties. Subsequent revisions to these estimates, which can be significant, could be caused by changes to our maintenance program, changes in utilization of the aircraft, governmental regulations related to aging aircraft. We evaluate annually whether there is an indication that our property and equipment may be impaired. Factors that would indicate potential impairment may include, but are not limited to, significant decreases in the market value of long-lived assets, a significant change in the long-lived asset’s physical condition, and operating or cash flow losses associated with the use of long-lived assets. An impairment loss exists when the book value of an asset unit exceeds its recoverable amount, which is the higher of fair value less selling costs and value in use. The calculation of fair value less selling costs is based on information available of sales transactions regarding similar assets or market prices less additional costs for disposing of assets.