Azul’s Chapter 11 Restructuring Plan Wins Court Approval

Azul Linhas Aéreas Brasileiras has received court approval to proceed with its Chapter 11 restructuring, marking a key milestone in its efforts to stabilize operations and reduce debt. The U.S. bankruptcy court granted the Brazilian airline permission to move forward with its financial reorganization, which includes more than $1 billion in debtor-in-possession (DIP) loans.

In a statement, Azul said it expects at least one more court hearing in July to secure final approvals related to its broader restructuring plan. The company emphasized its commitment to long-term financial recovery and operational sustainability.

Azul filed for Chapter 11 protection in late May 2025 in the U.S., aiming to eliminate more than $2 billion in funded debt. The carrier’s restructuring strategy includes cost-cutting, renegotiated aircraft leases, and access to liquidity through DIP financing.

Since the filing, Azul has taken several critical steps, including rejecting leases on a number of aircraft to streamline its fleet. The airline also faced a temporary trading suspension on the New York Stock Exchange and fought to maintain its fuel supply amid creditor challenges.

In parallel, Azul is engaged in legal proceedings with the Portuguese government over an unpaid bond issued in 2016. The dispute remains unresolved.

Despite ongoing challenges, Azul continues to operate flights and serve its domestic and international network. The company views the restructuring process as essential to ensuring long-term competitiveness and returning to profitability in a highly competitive Latin American aviation market.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com