GOL Advances Chapter 11 Restructuring: Debt Reduction and Fleet Renewal by 2025

The Brazilian airline GOL Linhas Aéreas has made progress in its restructuring process under Chapter 11 of the U.S. Bankruptcy Code and maintains its goal of completing this process by the end of April 2025. During the third quarter of 2024, GOL increased its operational capacity and engaged in significant negotiations to optimize its financial structure and renew its fleet.

As part of its modernization strategy, GOL added two new Boeing 737 MAX 8 aircraft to its fleet in an effort to improve operational efficiency and reduce costs. At the same time, the company returned five Boeing 737 NG aircraft to its lessors, continuing its transition to more modern aircraft. Despite delays in new aircraft deliveries from Boeing, GOL managed to increase its operational fleet from 102 to 107 aircraft compared to the previous quarter, thanks to a recovery plan under Chapter 11.

As of September 30, 2024, GOL’s fleet consists exclusively of Boeing 737 aircraft in narrowbody configuration, with a total of 138 planes: 49 Boeing 737 MAX, 83 Boeing 737NG, and 6 737-800BCF freighters. The airline maintains financial flexibility with a model in which 97% of its fleet is leased through operating leases, while only 3% is obtained via financial leases.

As part of its restructuring, GOL reached a key debt-to-equity conversion agreement with its main shareholder, the Abra Group. This agreement will eliminate over $2.55 billion in debt from its balance sheets and transfer approximately $950 million in new equity to the Abra Group, thus strengthening the airline’s financial position.

GOL’s CEO, Celso Ferrer, emphasized that the key terms of the restructuring plan are already defined. This allows the airline to present its reorganization plan to the bankruptcy court before the end of the year and complete the process in April 2025. Although the financial challenges have been significant, Ferrer noted that this process will allow GOL to position itself for sustainable growth in the coming years.

During the third quarter of 2024, GOL experienced a slight increase in revenue by 6%, reaching 4.9 billion, driven by a recovery in its capacity measured in available seat kilometers, which grew 6% compared to the same quarter last year and 21% compared to the second quarter of this year.

Despite a decrease in operating profit, which stood at 3 million R$ compared to 825 million the previous year, and a net loss of R$ 830 million, the company managed to avoid an increase in losses. Additionally, GOL renegotiated the lease terms of 139 aircraft and 58 engines, adjusting payment flows to ensure its long-term financial viability.