Brazilian Airline Azul Files for Chapter 11 Bankruptcy Protection
Azul seeks to reorganize its finances with significant backing from creditors and partners.
SAO PAULO, BRAZIL.
Azul, Brazil's largest airline by the number of flights and destinations, announced on Wednesday that it will seek Chapter 11 bankruptcy protection in the United States to reorganize its finances as part of an agreement with creditors and partners.
The airline confirmed that it will continue to operate without interruption and maintain all commitments to passengers and employees during the process, operating under the protection of U.S. bankruptcy law.
This protection allows companies to continue operations while restructuring their financial framework under court supervision.
The restructuring plan is supported by major financial partners and includes $1.6 billion in financing during the process and the elimination of $2 billion in debts, according to a statement from Azul.
The airline also anticipates up to $950 million in additional capital contributions once the reorganization is completed.
Supporters of the plan include U.S.-based United Airlines and American Airlines, which are already strategic partners of Azul.
AerCap, the airline's primary aircraft lessor, has also signed a support agreement for the restructuring process.
Azul claims to be the largest airline in Brazil in terms of departures and cities served, operating 1,000 daily flights to more than 160 destinations.
CEO John Rodgerson explained in the statement that the financial difficulties arose from several external factors.
The COVID-19 pandemic severely impacted the global aviation sector, while global economic turbulence and supply chain issues in aviation exacerbated the situation.
With this decision, Azul becomes the latest major Brazilian airline to resort to a financial restructuring process.
Its competitor Gol filed for similar U.S. bankruptcy protection in January 2024.
Around 2 p.m. (GMT), the airline's shares on the Brazilian stock exchange were down approximately 6%.
Azul, Brazil's largest airline by the number of flights and destinations, announced on Wednesday that it will seek Chapter 11 bankruptcy protection in the United States to reorganize its finances as part of an agreement with creditors and partners.
The airline confirmed that it will continue to operate without interruption and maintain all commitments to passengers and employees during the process, operating under the protection of U.S. bankruptcy law.
This protection allows companies to continue operations while restructuring their financial framework under court supervision.
The restructuring plan is supported by major financial partners and includes $1.6 billion in financing during the process and the elimination of $2 billion in debts, according to a statement from Azul.
The airline also anticipates up to $950 million in additional capital contributions once the reorganization is completed.
Supporters of the plan include U.S.-based United Airlines and American Airlines, which are already strategic partners of Azul.
AerCap, the airline's primary aircraft lessor, has also signed a support agreement for the restructuring process.
Azul claims to be the largest airline in Brazil in terms of departures and cities served, operating 1,000 daily flights to more than 160 destinations.
CEO John Rodgerson explained in the statement that the financial difficulties arose from several external factors.
The COVID-19 pandemic severely impacted the global aviation sector, while global economic turbulence and supply chain issues in aviation exacerbated the situation.
With this decision, Azul becomes the latest major Brazilian airline to resort to a financial restructuring process.
Its competitor Gol filed for similar U.S. bankruptcy protection in January 2024.
Around 2 p.m. (GMT), the airline's shares on the Brazilian stock exchange were down approximately 6%.
