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Brazilian airline Azul plans to exit Chapter 11 by early 2026

Fabio Campos said in a Friday press conference that the Brazilian airline Azul hopes to end Chapter 11 proceedings by early next year.

Campos responded that Azul would now concentrate on its financial restructuring. Azul filed for Chapter 11 in the United States this week.

Abra, Gol's majority shareholder, and Colombian Avianca announced to Azul in January that they had signed an non-binding Memorandum of Understanding with the intention of merging their businesses in Brazil.

Campos noted also that the MoU between Azul and Gol remains valid, even though it is not Azul's priority at this time.

Azul finished this week its first Chapter 11 hearing. The court approved the carrier's access to $250 million from its $1.6 billion in debtor-in possession financing.

The company stated that the amount combined with other judicial approbations and revenue generated by ongoing operations will provide sufficient liquidity to sustain uninterrupted operations.

Campos said that Azul does not plan to lay off massive numbers of employees in light of its financial restructuring. Sales and operations will remain unaffected.

Before filing for Chapter 11 protection Azul had agreements with key stakeholders including existing bondholders and aircraft lessor AerCap. It also entered into agreements United Airlines and American Airlines. The executive also noted that other lessors are in talks, besides AerCap.

Azul is the latest Latin American airline to declare bankruptcy. It joins a long list of airlines that have been affected by the COVID-19 epidemic.

(source: Reuters)