Azul files for Chapter 11 bankruptcy protection
May 28, 2025
Brazilian carrier Azul has filed for Chapter 11 bankruptcy protection in the United States as part of a financial restructuring effort backed by creditors, aircraft lessors, and airline partners, including United Airlines and American Airlines.
The airline, which operates the most flights and serves the highest number of destinations in Brazil, has reached Restructuring Support Agreements with bondholders and its largest lessor, AerCap, as it seeks to reduce its debt load by more than US$2 billion and streamline lease obligations.
Azul says the move will allow it to secure its long-term financial health while continuing normal operations.
“Azul continues to fly – today, tomorrow, and into the future. These Agreements mark a significant step forward in the transformation of our business – one that enables us to emerge as an industry leader in the main aspects of our business,” said John Rodgerson, Chief Executive Officer of Azul.
“With a collaborative approach and the support of our stakeholders, we have made a strategic decision to pursue a voluntary financial restructuring as a proactive move to optimise our capital structure, which was burdened by the COVID-19 pandemic, macroeconomic headwinds, and aviation supply chain issues.
“Our strategy is not just about financial reorganisation. By using this process, we believe that we are creating a robust, resilient, industry-leading airline, one that customers will continue to love flying, at which crew members will continue to love working, and that will create value for our stakeholders.”
The Chapter 11 process is commonly used by companies in the US to restructure debt while continuing day-to-day operations. Azul plans to use this legal framework to deleverage its balance sheet and gain flexibility in managing its fleet and lease terms.
Support for the plan includes approximately US$1.6 billion in debtor-in-possession (DIP) financing, partially replacing existing debt and injecting an estimated US$670 million in new capital during the restructuring. On exit from Chapter 11, the airline intends to raise up to US$650 million via an equity rights offering, underwritten by its financial backers, alongside a proposed US$300 million investment from American and United Airlines, pending certain conditions.
“United was proud to begin cooperating with Azul in 2014 and to invest in Azul in 2015. Since that time, we have connected hundreds of thousands of passengers and are excited about the opportunity to grow this business even more. Azul is more than just a commercial partner for United – their customer-first approach and unique route network connecting small and large communities have improved the passenger experience in Brazil. That’s why we support Azul’s restructuring process and have entered into an agreement to build an even stronger relationship in the future,” said Andrew Nocella, Executive Vice President and Chief Commercial Officer of United Airlines.
AerCap, which holds a substantial share of Azul’s aircraft lease obligations, has also backed the restructuring strategy.
“AerCap has signed a support agreement with its longstanding partner Azul. As the airline moves through its restructuring process, we are very confident Azul will emerge stronger than ever,” said Aengus Kelly, Chief Executive Officer of AerCap. “Together with Azul, we are the largest owners of Embraer E2 commercial aircraft, supporting the Brazilian aviation industry like no other.”
