Rumors Grow Around Possible Chapter 11 Filing by Azul Linhas Aéreas
Speculation is mounting over a potential Chapter 11 bankruptcy filing by Azul Linhas Aéreas, following the release of the airline's latest financial results.
Azul remains the only major Brazilian airline yet to seek court protection, with competitor GOL currently undergoing Chapter 11 proceedings in U.S. courts, while LATAM has already completed its restructuring and returned to profitability.
In the first quarter of 2025, Azul reported an adjusted net loss of R$ 1.816 billion, despite benefiting from a drop in the U.S. dollar, which helped the airline post an accounting profit of R$ 783 million, largely due to a positive R$ 2.567 billion from “net foreign exchange variations.”
Earlier this month, AV's partner outlet AEROIN reported that Chapter 11 rumors were circulating among the airline’s top executives. Now, sources cited by Bloomberg confirm that Azul is in active talks with creditors to explore its options, with Chapter 11 protection in the U.S. being seriously considered.
Operationally, there is also speculation that Azul may soon revive its LNR (Unpaid Leave) program in an effort to reduce labor costs. The program was first implemented during the COVID-19 pandemic, allowing employees to take on other jobs while still retaining benefits such as health insurance and social security, and maintaining a formal link with the company.
For passengers, major disruptions are not expected. Both GOL and LATAM underwent similar restructuring processes with minimal operational changes, and without significant impact on fares or service quality. If Azul moves forward with Chapter 11, the airline would be temporarily shielded from repaying its current debts, while it works on an internal reorganization plan.
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