GOL Linhas Aéreas Inteligentes Files for Chapter 11 Bankruptcy Protection in the US

GOL Linhas Aéreas Inteligentes, a major Brazilian airline operating under the IATA code G3, has voluntarily filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. This announcement, made on January 25, comes amid ongoing commercial flight operations for the airline.

To support its restructuring process, GOL has secured a commitment for new debtor-in-possession financing of USD 950 million from the Ad Hoc Group of Abra bondholders and other bondholders within the Abra Group. This group also owns Avianca airlines, the Colombian carrier that experienced its own Chapter 11 restructuring between 2020 and 2021.

Celso Ferrer, CEO of GOL, emphasized the airline’s commitment to customer service and profitability improvements. He stated that the Chapter 11 process will be utilized to restructure near-term financial obligations and strengthen the airline’s capital structure.

The Chapter 11 filing includes a total of 13 associated companies, among them GOL Linhas Aereas Inteligentes S.A., GOL Linhas Aereas S.A., and Smiles Fidelidade S.A., GOL’s loyalty program. The filing also lists the 30 largest unsecured claims at the time of filing, with The Bank of New York Mellon, Comando da Aeronautica, and Vibra Energia S/A being the top three creditors.

Bloomberg reported that GOL’s short-term debts, including leases and borrowings, had reached BRL 2.9 billion reais (USD 576 million) by September 2023, with cash holdings at BRL 1 billion (USD 203 million). Despite financial challenges, the airline posted a record net operating revenue of BRL 4.7 billion (USD 955 million) in the third quarter of 2023, a 16.4% increase over the same period in the previous year.

In response to its financial challenges, GOL engaged Seabury Capital in December 2023 for a comprehensive review of its capital structure and to facilitate negotiations with aircraft lessors. According to ch-aviation fleets data, 132 of GOL’s 142 aircraft are leased from 24 different lessors.

This Chapter 11 filing by GOL Linhas Aéreas Inteligentes marks a crucial step in the airline’s efforts to navigate its financial difficulties and restructure its debt, aiming to emerge more resilient in the competitive aviation industry.