Azul S A : Informação Prestada às Bolsas Estrangeiras

As submitted to the Securities and Exchange Commission on May 15, 2024

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

• REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
  OR

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023

OR

• • TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR
• SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report

For the transition period from _______________ to _______________

Commission file number: 001-38049

AZUL SA

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant's name into English)

Federative Republic of Brazil

(Jurisdiction of incorporation or organization)

Avenida Marcos Penteado de Ulhôa Rodrigues, n. 939, 8th floor

Edifício Jatobá, Condomínio Castelo Branco Office Park

Tamboré, Barueri, State of São Paulo, Zip Code 06460-040

Federative Republic of Brazil

(Address of principal executive offices)

Alexandre Wagner Malfitani (Chief Financial Officer and Investor Relations Officer)

E-mail: [e-mail]

Telephone: [phone]

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Title of each class		Trading Symbol		Name of each exchange on which registered
Preferred Shares without par value				New York Stock Exchange*
American Depositary Shares (as evidenced by American Depositary		AZUL		New York Stock Exchange
Receipts), each representing three Preferred Shares

*Not for trading purposes, but only in connection with the listing on the New York Stock Exchange of American Depositary Shares representing those Preferred Shares.

Securities registered or to be registered pursuant to Section 12 (g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15 (d) of the Act: None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

928,965,058 Common Shares

335,750,796 Preferred Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒

No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934.

Yes ☐

No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒

No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒

No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See

definition of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

• The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting
  Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404 (b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that prepared or issued its audit report.

Yes ☒

No ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing

reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by

any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

	International Financial Reporting Standards as issued by
U.S. GAAP ☐	the International Accounting Standards Board ☒	Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 ☐

Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐

No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange

Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court:

Yes ☐

No ☐

	TABLE OF CONTENTS
		Page
INTRODUCTION	1
GLOSSARY OF AIRLINE AND OTHER TERMS:	1
FORWARD LOOKING STATEMENTS	8
	PART I
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	10
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	10
ITEM 3.	KEY INFORMATION	10
A.	Selected Financial Data	10
B.	Capitalization and Indebtedness	10
C.	Reasons for the Offer and Use of Proceeds	10
D.	Risk Factors	10
ITEM 4.	INFORMATION ON THE COMPANY	44
A.	History and Development of the Company	44
B.	Business Overview	45
C.	Organizational Structure	92
D.	Property, Plant and Equipment	93
ITEM 4A.	UNRESOLVED STAFF COMMENTS	94
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	94
A.	Operating Results	94
B.	Liquidity and Capital Resources	108
C.	Research and Development, Patents and Licenses	112
D.	Trend Information	112
E.	Critical Accounting Estimates	113
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	113
A.	Directors and Senior Management	113
B.	Management Compensation	120
C.	Board Practices	125
D.	Employees	126
E.	Share Ownership	127
F.	Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation	128
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	129
A.	Major Shareholders	129
B.	Related Party Transactions	130
C.	Interests of Experts and Counsel	134
ITEM 8.	FINANCIAL INFORMATION	134
A.	Consolidated Statements and Other Financial Information	134
B.	Significant Changes	138

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ITEM 9.	THE OFFER AND LISTING	138
A.	Offering and Listing Details	138
B.	Plan of Distribution	138
C.	Markets	138
D.	Selling Shareholders	141
E.	Dilution	141
F.	Expenses of the Issue	141
ITEM 10.	ADDITIONAL INFORMATION	141
A.	Share Capital	141
B.	Memorandum and Articles of Association	141
C.	Material Contracts	150
D.	Exchange Controls	150
E.	Taxation	150
F.	Dividends and Payment Agents	160
G.	Statements by Experts	160
H.	Documents on Display	160
I.	Subsidiary Information	161
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	161
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	163
A. Debt Securities	163
B. Warrants and Rights	163
C. Other Securities	163
D. American Depositary Shares	163
	PART II
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	173
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	173
ITEM 15.	CONTROLS AND PROCEDURES	173
ITEM 16.	[RESERVED]	174
A.	Audit Committee Financial Expert	174
B.	Code of Ethics	174
C.	Principal Accountant Fees and Services	174
D.	Exemptions from the Listing Standards for Audit Committees	175
E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	175
F.	Change in Registrant's Certifying Accountant	175
G.	Corporate Governance	175
H.	Mine Safety Disclosure	177
I.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	177
J.	Insider Trading Policies	178
K.	Cybersecurity	178

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		PART III
ITEM 17.	FINANCIAL STATEMENTS	180
ITEM 18.	FINANCIAL STATEMENTS	180
ITEM 19.	EXHIBITS	180
INDEX TO FINANCIAL STATEMENTS	F-2

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INTRODUCTION

In this annual report, the discussion of our business includes the business of Azul S.A. and its direct and indirect subsidiaries. Unless otherwise indicated or the context otherwise requires, "Azul" "we," "us," "our" or the "Company" refer to Azul S.A. and its consolidated subsidiaries. The term "Brazil" refers to the Federative Republic of Brazil and the phrase "Brazilian government" refers to the federal government of Brazil. "Central Bank" refers to the Brazilian Central Bank (Banco Central do Brasil). References in the annual report to "real," "reais" or "R$" refer to the Brazilian real, the official currency of Brazil and references to "U.S. dollar," "U.S. dollars" or "US$" refer to U.S. dollars, the official currency of the United States of America.

GLOSSARY OF AIRLINE AND OTHER TERMS:

The following is a glossary of industry and other defined terms used in this annual report:

• "ABEAR" means the Brazilian Association of Airline Companies (Associação Brasileira das Empresas Aéreas).
• "ABRACORP" means the Brazilian Corporate Agencies Association (Associação Brasileira de Agências Corporativas).
• "ADR" means American depositary receipts.
• "ADS" means American depositary shares.
• "Aeroportos Brasil," a private consortium that operates Viracopos airport jointly with INFRAERO.
• The "Águia Branca Group," or "Grupo Águia Branca," is a Brazilian transportation and logistics conglomerate controlled by the Chieppe family.
• "Airbus" means Airbus S.A.S.
• "Airbus Group" means Airbus Group N.V.
• "aircraft utilization" represents the average number of block hours operated per day per aircraft for our operating fleet, excluding spare aircraft and aircraft in maintenance.
• "ALAB" refers to the main operating subsidiary of the Company, namely "Azul Linhas Aéreas Brasileiras S.A."
• "ANAC" refers to the Brazilian National Civil Aviation Agency (Agência Nacional de Aviação Civil).
• "Atlantic Gateway" means Atlantic Gateway, SPGS, Lda., an entity jointly owned by our principal shareholder, Hainan and another European investor.
• "ATR" means aircraft with turboprop propulsion manufactured by Avions de Transport Régional G.I.E.
• "audited consolidated financial statements" means our audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021.
• "available seat kilometers," or "ASKs," represents aircraft seating capacity multiplied by the number of kilometers the aircraft is flown.
• "average fare" means total passenger revenue divided by passenger flight segments.
• "average ticket revenue per booked passenger" means total passenger revenue divided by booked passengers.
• "Avianca Brasil" means Oceanair Linhas Aéreas S.A.
• "Azul Investments" means Azul Investments LLP.
• "Azul Secured Finance" means Azul Secured Finance LLP.
• "Azul Viagens" means ATS Viagens e Turismo Ltda.
• "B3" means the Brazilian Stock Exchange (B3 S.A. - Brasil, Bolsa, Balcão).
• "block hours" means the number of hours during which the aircraft is in revenue service, measured from the time it closes the door at the departure of a revenue flight until the time it opens the door at the arrival on the gate at destination.
• "Boeing" means The Boeing Company.
• "booked passengers" means the total number of passengers booked on all passenger flight segments.
• "CADE" refers to the Brazilian Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica), the Brazilian antitrust authority.
• "Calfinco" means Calfinco, Inc., a wholly-owned subsidiary of United Airlines, Inc.

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• "CAPA" means the Centre for Aviation, a provider of independent aviation market intelligence, analysis and data services.
• "Cape Town Convention" means the Convention on International Interests in Mobile Equipment and its protocol on Matters Specific to Aircraft Equipment, concluded in Cape Town on November 16, 2001.
• "CASK" represents total operating cost divided by available seat kilometers.
• "CBP" means United States Customs and Border Protection.
• "Cirium" means a real-time provider of data for analyzing route dynamics, passenger demand and operational performance.
• "CMN" means the Brazilian National Monetary Council (Conselho Monetário Nacional).
• "completion rate" means the percentage of completion of our scheduled flights that were operated by us, whether or not delayed (i.e., not cancelled).
• "COVID-19"means the novel coronavirus that surfaced in the city of Wuhan, China in December 2019.
• "CPPI" means the Council of the Brazilian Investment Partnership Program (Conselho do Programa de Parceria de Investimentos).
• "crewmembers" is a term we use to refer to all our employees, including aircraft crew, airport ground, call center, maintenance and administrative personnel.
• "CVM" means the Brazilian Securities Commission (Comissão de Valores Mobiliários).
• "DECEA" means the Brazilian Department of Airspace Control (Departamento de Controle do Espaço Aéreo).
• "departure" means a revenue flight segment.
• "DOT" means the United States Department of Transportation.
• "EASA" means the European Union Aviation Safety Agency.
• "economic interest" means a participation in the total equity value of our company, calculated as if all common shares issued and outstanding had been converted into preferred shares at the conversion ratio of 75.0 common shares to 1.0 preferred share pursuant to the mechanisms set forth in our bylaws.
• "E-Jets"refer to narrow-body jets manufactured by Embraer S.A.
• "Embraer" means Embraer S.A.
• "ESG" means Environmental, Social and Governance practices.
• "FAA" means the United States Federal Aviation Administration.
• "FGV" refers to the Getúlio Vargas Foundation (Fundação Getúlio Vargas), a Brazilian higher education institution that was founded in December 1944.
• "financial statements" refers to our audited consolidated financial statements.
• "flight hours" means the number of hours during which the aircraft is in revenue service, measured from the time it takes off until the time it lands at the destination.
• "focus-city"means a destination from which an airline operates several point-to-point routes. A focus-city may also function as a smaller scale hub.
• "FTEs" means full-time equivalent employees.
• "FTEs per aircraft" means the number of FTEs divided by the number of operating aircraft.
• "Global Distribution System" or "GDS" means a system that enables automated transactions between airlines and travel agencies. Travel agencies traditionally rely on GDS for services, products and rates in order to provide travel-related services to end consumers. GDS can link services, rates and bookings consolidating products and services across different travel sectors including airline reservations, hotel reservations and car rental. GDS charges participant airlines a booking fee per passenger and segment sold, typically applying additional charges for ticketing, credit card authorizations, real time connectivity, information pages and other ancillary services.
• "Gol" means Gol Linhas Aéreas Inteligentes S.A., or its operating subsidiary Gol Linhas Aéreas S.A.
• "gross billings" means the result of the sale of points to commercial partners and the cash portion of points plus money transactions. It is not an accounting measurement. This revenue may affect the current period or may be recognized as revenue in future periods, depending on the time of redemption on the part of program participants.
• "Hainan" means Hainan Airlines Holding Co., Ltd.
• "IATA" means the International Air Transport Association.
• "IBGE" means the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística).

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• "ICAO" means the International Civil Aviation Organization.
• "IFRS" means International Financial Reporting Standards, as issued by the International Accounting Standards Board.
• "INFRAERO" means Empresa Brasileira de Infraestrutura Aeroportuária-INFRAERO, a Brazilian state-controlled corporation reporting to the Ministry of Infrastructure that is in charge of managing, operating and controlling federal airports, including control towers and airport safety operations.
• "INPI" means the Brazilian Institute of Industrial Property (Instituto Nacional da Propriedade Industrial).
• "IntelAzul S.A." or "IntelAzul" means the entity formerly known as TRIP Linhas Aéreas S.A. and Tudo Azul S.A., which was acquired by Azul, in 2012, and subsequently changed its corporate name to "IntelAzul S.A."
• "IP Co" means Azul IP Cayman Ltd.
• "IP HoldCo" means Azul IP Cayman Holdco Ltd.
• "JetBlue" means JetBlue Airways Corporation.
• "LATAM" means Latam Airlines Group S.A. including all of its subsidiaries. LATAM was formed in 2012, through the acquisition of TAM S.A., or TAM Linhas Aéreas S.A., by Lan Airlines S.A.
• "load factor" means the percentage of aircraft seats actually occupied on a flight (RPKs divided by ASKs).
• "main competitors" refers to Gol and LATAM, our competitors in the Brazilian market that have a market share larger than ours and publicly disclose their results of operations from time to time. When used in the singular, the term "main competitor" refers to Gol, our only direct competitor for which stand-alone information is publicly available.
• "LATAM Pass" is LATAM's loyalty program.
• "Lilium" means Lilium GmbH, a wholly owned subsidiary of Lilium N.V.
• "Net promoter score or NPS" means a customer loyalty metric that we use to measure how willing a customer is to recommend our service.
• "NYSE" means the New York Stock Exchange.
• "on-timeperformance" refers to the percentage of an airline's scheduled flights that were operated and that arrived within 15 minutes of the scheduled time.
• "operating fleet" means aircraft in service, spare aircraft and aircraft undergoing maintenance.
• "passenger flight segments" means the total number of revenue passengers flown on all revenue flight segments.
• "Petrobras" means Petróleo Brasileiro S.A., a mixed economy corporation in the oil and gas industry that is majority owned by the Brazilian government.
• "pitch" means the distance between a point on one seat and the same point on the seat in front of it.
• "PRASK" means passenger revenue divided by ASKs.
• "PRASK premium" refers to the positive difference between an airline's PRASK and its main competitor's PRASK over a given time period.
• "preferred shares" means our preferred shares issued and outstanding.
• "principal shareholder" means David Gary Neeleman, or simply David Neeleman.
• "RAB" means the Brazilian Aeronautical Registry (Registro Aeronáutico Brasileiro).
• "RASK" or "unit revenue" means operating revenue divided by ASKs.
• "revenue passenger kilometers" or "RPKs" means one-fare paying passenger transported per kilometer. RPK is calculated by multiplying the number of revenue passengers by the number of kilometers flown.
• "route" means a segment between a pair of cities.
• "Shareholders' Agreement" means that certain shareholders' agreement, dated September 1, 2017 and amendment dated on March 3, 2021 entered into by and between us and the holders of our common shares, David Neeleman, Trip, Rio Novo and Calfinco.
• "Smiles" means Smiles Fidelidade S.A., Gol's loyalty program.
• "stage length" means the average number of kilometers flown per flight.
• "TAP" means TAP - Transportes Aéreos Portugueses, SGPS, S.A.
• "TAP Bonds" means Tranche A 7.5% bonds due March 2026 issued by TAP.
• "TRIP" means the entity formerly known as TRIP Linhas Aéreas S.A. and Tudo Azul S.A., which was acquired by Azul in 2012 and subsequently changed its corporate name to "IntelAzul S.A."

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• "TRIP acquisition" means our 2012 acquisition of TRIP.
• "trip cost" represents operating expenses adjusted for non-recurring events divided by departures.
• "TRIP's former shareholders" means, collectively, the Caprioli family and the Águia Branca Group.
• "TSA" means the United States Transportation Security Administration.
• "TwoFlex" means Azul Conecta Ltda. ("Azul Conecta") previously known as Two Táxi Aéreo Ltda.
• "United" means United Airlines Inc.
• "Vibra Energia" means Vibra Energia S.A., an energy company, formerly known as "BR Distribuidora".
• "Viracopos" means the main airport of Campinas, located approximately 100 km from the city of São Paulo, State of São Paulo.
• "yield" represents the average amount one passenger pays to fly one kilometer.

Summary of Risk Factors

An investment in our preferred shares is subject to a number of risks, including risks relating to the nature of our business as an airline and the aviation industry, our operations in Brazil and our common shares. The following list summarizes some, but not all, of these risks. Please read the information in the section entitled "Risk Factors" for a more thorough description of these and other risks.

Risk Relating to Our Business and the Brazilian Aviation Industry

• Because the airline industry is characterized by high fixed costs and relatively elastic revenues, airlines cannot quickly reduce their costs to respond to shortfalls in expected revenues and this may harm our ability to attain our strategic goals.
• Further consolidation in the Brazilian and global airline industry may adversely affect us.
• Substantial fluctuations in fuel costs or the unavailability of fuel, which is mostly provided by one supplier, would have an adverse effect on us.
• We are highly dependent on our three hubs at Viracopos airport, Confins airport and Recife airport for a large portion of our business and as such, a material disruption at any of our hubs could adversely affect us.
• We depend significantly on automated systems and any cyberattacks, breakdown, hacking or changes in these systems, as well as any technical and operational problems in the Brazilian civil aviation infrastructure, may adversely affect us.
• We depend on our senior management team, and the loss of any member of this team, including our Chairman and key executives, could adversely affect us.
• Changes to the Brazilian civil aviation regulatory framework may adversely affect us.
• We have a significant amount of indebtedness and other financial obligations and insufficient liquidity may have a material adverse effect on our financial condition and business.
• Changes in the credit ratings issued by credit rating agencies could adversely affect our ability to raise funding, our cost of financing and the market price of our securities.
• The outbreak of highly contagious diseases worldwide, such as the COVID-19 pandemic, had, and may in the future cause, a material adverse effect on our business, financial condition, liquidity and results of operations.

Risk Relating to Brazil

• The Brazilian federal government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement as well as Brazil's political and economic conditions could harm us and the price of our preferred shares, including in the form of ADSs.
• Economic, health, political, and environmental crises, or any other kind of crisis that has the ability to impact the Brazilian economy, may affect the Brazilian population's purchasing power, which may result in a decrease in demand for air travel and, consequently, affect our business.
• We cannot predict which policies the President of Brazil may adopt or change during his mandate or the effect that any such policies might have on our business and on the Brazilian economy.
• Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of our preferred shares, including in the form of ADSs.

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• Developments and the perceptions of risks in other countries, including other emerging markets, the United States and Europe, and developments relating to the Russia-Ukraine conflict and relating to the conflict among Israel and militant groups in the Middle East (including Hamas), may adversely affect the Brazilian economy and the price of Brazilian securities, including the price of our preferred shares, including in the form of ADSs.
• Variations in interest rates may have adverse effects on us.
• Deficiencies in Brazilian infrastructure, particularly in airports and ports, may adversely affect us.
• Climate change, including increased regulation of our CO2 emissions, changing consumer preferences and the potential increased impacts of severe weather events on our operations and infrastructure.

Risk Relating to Our Preferred Shares, Including in the Form of ADSs

• Our controlling shareholder has the ability to direct our business and affairs, and its interests may conflict with that of other shareholders.
• An active and liquid trading market for our preferred shares, including in the form of ADSs, may not be maintained, thereby potentially adversely affecting the price our preferred shares, including in the form of ADSs.
• Our preferred shares will have limited voting rights.
• The sale of a significant number of our preferred shares, including in the form of ADSs, may negatively affect the trading price of our preferred shares, including in the form of ADSs.
• The Brazilian government may impose exchange controls and significant restrictions on remittances of reais abroad, which would adversely affect your ability to convert and remit dividends or other distributions or the proceeds from the sale of our preferred shares, our capacity to make dividend payments or other distributions to non-Brazilian investors and would reduce the market price of our preferred shares, including in the form of ADSs, and our capacity to comply with payment obligations in foreign currency.
• If we do not maintain a registration statement and no exemption from the Securities Act is available, U.S. Holders of ADSs will be unable to exercise preemptive rights with respect to our preferred shares.
• The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain qualified board members or executive officers.
• If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, the market price and trading volume of our preferred shares, including in the form of ADSs could decline.
• Our status as a foreign private issuer allows us to follow alternate standards to the corporate governance standards of the NYSE, which may limit the protections afforded to investors.

Market Share and Other Information

This annual report contains data related to economic conditions in the market in which we operate. The information contained in this annual report concerning economic conditions is based on publicly available information from third-party sources that we believe to be reasonable. Data and statistics regarding the Brazilian civil aviation market are based on publicly available data published by ANAC, INFRAERO, ABRACORP, Ministry of Transportation, Ports and Civil Aviation and Aeroportos Brasil, among others. Data and statistics regarding international civil aviation markets are based on publicly available data published by ICAO or IATA. We also make statements in this annual report about our competitive position and market share in, and the market size of, the Brazilian airline industry. We have made these statements on the basis of statistics and other information from third-party sources that we believe to be reasonable, such as Cirium, ANAC and Dados Comparativos Avançados (Advanced Comparative Data, a monthly report issued by ANAC that contains preliminary information on the number of ASKs and RPKs recorded in the Brazilian civil aviation market), and ABEAR. In addition, we include additional operating and financial information about Gol, LATAM, Smiles and LATAM Pass, which is derived from the information released publicly by them, including disclosure filed with or furnished to the SEC and other information made available on their respective websites. Although we have no reason to believe any of this information or these reports are inaccurate in any material respect and believe and act as if they are reliable, we have not independently verified it. Governmental publications and other market sources, including those referred to above, generally state that their information was obtained from recognized and reliable sources, but the accuracy and completeness of that information is not guaranteed. In addition, the data that we compile internally and our estimates have not been verified by an independent source.

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