Azul Airlines Exits Chapter 11 Bankruptcy

• Azul cut debt and lease obligations by approximately $2.5 billion during the restructuring process that began when it filed for Chapter 11 in May 2025
• The airline raised nearly $1.4 billion through debt and $950 million in equity investments to strengthen its capital structure and increase liquidity
• Azul joins a wave of Latin American carriers that filed for bankruptcy since 2020, including Aeromexico, Avianca, Gol, and LATAM Airlines, all impacted by the COVID-19 pandemic

Azul Airlines Exits Chapter 11 Bankruptcy

Key Development:

Brazilian carrier Azul formally emerged from Chapter 11 bankruptcy proceedings in the United States on February 20, successfully completing its financial restructuring process initiated in May 2025.

Financial Highlights:

• Debt reduction: Cut debt and lease obligations by approximately $2.5 billion
• Capital raised: Secured nearly $1.4 billion through debt financing
• Equity investment: Raised $950 million in new equity investments

The airline confirmed it achieved its primary restructuring objectives, including strengthening its capital structure, increasing liquidity, and significantly reducing overall indebtedness.

Industry Context:

Azul's bankruptcy filing was part of a broader trend affecting Latin American aviation following COVID-19's devastating impact on the sector. The company joins several regional competitors in seeking bankruptcy protection since 2020, including:

• Aeromexico
• Avianca (Colombia-based)
• Gol (Brazilian rival)
• LATAM Airlines (Brazilian rival)

Market Implications:

The successful exit from bankruptcy represents a significant turnaround for Azul and provides a positive signal for the Latin American aviation sector's recovery. The substantial debt reduction of $2.5 billion should improve the airline's operational flexibility and competitive position going forward. However, the fact that most major Latin American carriers required bankruptcy protection underscores the severe financial strain the pandemic placed on regional aviation, raising questions about long-term industry consolidation and profitability in the sector.

The restructuring positions Azul to compete more effectively in Brazil's domestic market against recovering rivals Gol and LATAM.