Sustainability Report 2020 manual de utilização da marca Contents Introduction Focus on people How to navigate this Report .......................05 Crewmembers ...........................................47 Sustainable Development Goals map .........07 Customers .................................................67 Welcome aboard ........................................08 Business Partners ......................................71 Our value generation Going Above and Beyond About Azul .................................................12 Connectivity ............................................... 74 Outlook ......................................................16 Social responsibility....................................75 2020 Overview ...........................................17 Innovation ..................................................79 Initiatives and Targets .................................18 Performance ..............................................22 To learn more GRI Standards Content Index .....................83 Business conduct SASB index ................................................89 Corporate Governance ...............................28 Capitals Map ..............................................90 Risk Management ......................................32 Credits .......................................................91 Connection that transforms ........................33 We enthusiastically present Azul's Sustainability Report! Responsible and efficient operation We are thrilled to present this report to you, which describes our results, current initiatives, our values Safety ........................................................35 and our purpose. We are passionate about what we do Eco-efficiency ........................................... 37 and are pleased to share it publicly, reinforcing Azul’s Ethical Performance ...................................44 pledge to transparency and sustainable growth. Welcome and have a nice trip! 2 INTRODUCTION 01 3 GRI 102-50 Welcome to Azul’s All photos of Crewmembers without mask were taken before the pandemic. Sustainability Here we share our main highlights of 2020, in line with our commitment to transparency and sustainable growth of our business. On the following pages, you will find more information about our performance during the year, and also about Azul’s values, culture, Report! contributions to society and vision of the future. 4 How to Navigate this Report GRI 102-54 This report adheres to the best international Integrated Reporting (Capitals) SASB indicators reporting practices: Throughout this report, we will indicate where the This report also presents relevant indicators on content relating to each of the capitals supporting sustainability in the aviation industry according to Global Reporting Initiative (GRI) – GRI Azul’s business model is addressed. You can search the SASB. To quickly access this content, search Standards Core Option; for them through the capitals map on page 90, the index on page 89 or look for the TR-AL-XX which shows where they are located, or through acronym throughout the publication. Integrated Reporting Framework (IR or IIRC); the icons at the beginning of each chapter: For more information visit: Sustainability Accounting Standards Board www.sasb.org (SASB) aviation industry indicators; Environmental United Nations (UN) Sustainable Financial Development Goals. Sustainable Development Goals (SDGs) At the beginning of each chapter, you will find the priority SDGs icons that relate to the content of Azul’s Manufactured Report. A map indicating where and how the SDGs GRI Standards are addressed is also available on page 7. Throughout the content, you will see the GRI Human XXX-X acronym next to the chapters’ title or For more information visit: subtitle with the number of the indicator reported. https://sustainabledevelopment.un.org/sdgs The GRI content index on page 83 helps you find Social and Relationship these indicators, explaining each one of them and the pages on which they are located. Intellectual For more information visit: www.globalreporting.org For more information visit: https://integratedreporting.org/ 5 IMPORTANT NOTE! Throughout this report, we will refer to Azul by the terms “Azul” or “Company”. Also, whenever we use the term “Crewmembers”, please note that we are referring to all employees and "Business Partners" to our suppliers. Innovation Innovation is one of the pillars of our sustainability strategy and is present across several of our initiatives and projects. This icon appears throughout the report to highlight the content that addresses important innovations! Covid-19 Enjoy Throughout this report, you will also find this icon, which indicates the contents related to the measures taken by Azul to face the Covid-19 pandemic in 2020 on all fronts that we operate, in order to ensure your health and safety of all our publics, contribute to the fight against the disease and care for those in need, keep attending the market and act responsibly, to make sure that Brazil remains connected, even during reading! the most difficult times. 6 Sustainable Development Goals Map SDG goal Ensure healthy Achieve gender Promote sustained, Build resilient Make cities Take urgent Strengthen the means lives and promote equality and inclusive and continuous infrastructure, inclusive, safe, action to combat of implementation well-being for all empower all economic growth, promote sustainable resilient and climate change and revitalize the women and girls full and productive industrialization and sustainable and its impacts global partnership employment besides foster innovation for sustainable decent work for all development Azul's commitments Promote safety as Ensure women’s Establish trainee Support Promote local Maintain the Establish Azul’s #1 value; full and effective and scholarship infrastructure economic youngest fleet in partnerships participation and programs; development in development Brazil with fuel- with government Provide a proactive equal opportunities local airports; by connecting efficient aircraft; authorities, employee wellness Protect human rights for leadership at all underserved (or not regulators, program; in our operations and Encourage Monitor, relate levels; served) cities; manufacturers and supply chain; innovation amongst and manage Promote medical care suppliers on issues Fight all forms of Crewmembers. Ensure that services Greenhouse Gas through our network Create direct and involving actions discrimination against are not limited to Emissions. (Pink October, organ indirect jobs through to promote health women. high-density urban transport, Barretos our sustainable and safety (people destinations, but Hospital). growth. and operations) and also remote areas. climate protection. Relationship with content/pages: Safety, page 35 Crewmembers, Crewmembers, page 47 Performance, page 22 Connectivity, page 74 Eco-efficiency, page 37 Eco-efficiency, page 37 Crewmembers, page 47 page 47 Business Partners, Innovation, page 79 Social Responsibility, Innovation, page 79 Social Responsibility, Social Responsibility, page 71 page 75 page 75 page 75 Connectivity, page 74 7 Welcome aboard GRI 102-12 • 102-14 of initiatives focused around the health and safety We had to make difficut decisions in order to of our Customers and Crewmembers. At the same guarantee Azul's liquidity position. Our leadership We make time, we worked to mitigate the negative impact gave up their bonus and wages voluntarily; we on our financial results and liquidity. These actions negotiated union agreements to reduce working dreams fly! were conducted in open communication with all hours and fixed costs — which lasted only five of our stakeholders (learn more on pages 52, 68 months, instead of the 18 initially planned. We and 72). Many of these initiatives will serve us well launched voluntary programs for unpaid leave into the future. and retirement incentives, which more than We ended 2020 more confident than ever on our 11,000 Crewmembers — roughly 75% of our ability to overcome any challenge. Azul is made In April, we shrunk. From a level of 1,000 daily total — joined. We negotiated payment deferrals, up of people who are passionate about what flights, we went down to 70, a 95% decrease. Our discounts and contractual changes with our they do and eager to go above and beyond. operating priority was to help maintain Brazil’s lessors, banks and suppliers. Through their I would like to begin by thanking each one of Essential Air Network. 122 Azul aircraft were partnership and trust, we gained the support to our Crewmembers for their dedication and grounded, following strict procedures designed go through this unprecedented crisis. commitment through a difficult year. Together, we to preserve them and later return them to the fly higher! operation. Our new hangar in Campinas (SP) was We have readjusted our operations to strengthen essential in providing us the flexibility to respond Azul on a sustainable path towards full recovery We started 2020 with great expectations for Azul, quickly to the demand recovery. We ended the year and anticipated future growth. Azul was one of but the year turned out to be the most challenging flying to more than 110 destinations and connecting the few airlines in the world to maintain its cash one in our history due to the global crisis caused Brazil with more than 700 daily flights. Azul had the position in the toughest year in the history of by the pandemic. Once again, our business model strongest