Brazil's Azul Airlines Set to File for Chapter 11 Bankruptcy

Published 1 days agoAZUL

Brazil's Azul Airlines Set to File for Chapter 11 Bankruptcy

Brazilian airline Azul is preparing to file for Chapter 11 bankruptcy protection in the United States, according to a report by Valor Economico. This move comes as the company struggles with financial difficulties largely linked to the challenges faced by the aviation industry during the early stages of the COVID-19 pandemic.

Azul has been actively working to improve its financial condition, including a 2024 agreement that saw the airline eliminating $550 million in debt by offering a 20% equity stake to lessors and securing additional financing from bondholders. However, despite these efforts, the company's financial health remained fragile. By the end of the first quarter of 2025, Azul's net debt had ballooned by 50% from the previous year, reaching 31.35 billion reais (about $5.56 billion), and its leverage ratio increased from 3.7 to 5.2.

Azul is not alone in its financial troubles. Reuters highlighted that other Latin American carriers, such as Aeromexico, Avianca, Gol, and LATAM Airlines, have also declared bankruptcy amid financial distress in recent years. These filings underscore the broader struggles within the region's aviation sector, exacerbated by an ongoing turbulent economic environment.

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