a330 900 msn1876 azul taking off
Brazilian carrier Azul Linhas Aéreas has taken a critical step in its financial restructuring process by obtaining final, unopposed approval from the U.S. Bankruptcy Court for the Southern District of New York for its Debtor-in-Possession (DIP) financing totaling USD 1.6 billion.
This judicial decision, confirmed in the final days of July, provides the company with the necessary capital to maintain its full operations and service quality while it advances its transformation plan under the protection of Chapter 11 of the U.S. Bankruptcy Code, which it voluntarily entered in May 2025.
The financing package is intended to refinance existing obligations and strengthen the company’s working capital. According to reports from Airfinance Global, a portion of the funds will be used to pay off super-priority notes and other bridge debts, as well as to meet secured obligations with lessors.
John Rodgerson, CEO of Azul, stated in previous communications that with this approval and the backing of its financial partners, “Azul is well-positioned to execute our transformation plan and emerge as a stronger, more competitive airline.”
DIP (Debtor-in-Possession) financing is a special type of loan for companies under Chapter 11. It grants new lenders priority for repayment over other existing creditors, which encourages the injection of fresh capital so the company can continue to operate during its reorganization.
In parallel, Azul is making progress in renegotiating its liabilities. The company has submitted an agreement with AerCap, its largest aircraft leasing creditor, to the court. This deal, which awaits approval at a hearing scheduled for mid-August 2025, could generate savings of over USD 1 billion in fleet costs, according to the airline’s own estimates reported by Aeroflap.
Azul’s restructuring plan, according to analysis from CAPA – Centre for Aviation, also includes a fleet optimization, with a projected reduction in the number of aircraft in the coming years. This strategy aims to reduce capital expenditures and exposure to currency fluctuations.
Azul’s situation is set against a backdrop of recovery in the Brazilian aviation market. Official data from the Brazilian government shows that the sector transported a record 61.8 million passengers in the first half of 2025. This dynamism in the local market is a key factor that favors the long-term viability of the airline, which maintains one of the most extensive route networks in the country, connecting cities not served by other competitors.
With this financing secured, Azul Linhas Aéreas gains time and resources to negotiate with its creditors from a stronger position, with the goal of presenting a definitive reorganization plan and exiting Chapter 11 by early 2026.
Views: 0
