Azul receives Court approvals to move forward with accelerated transformation process for the future, together with its strategic partners

Rhea-AI Summary

Azul (NYSE: AZUL), Brazil's largest airline by flight departures and destinations, has received court approvals for its First Day motions following its voluntary Chapter 11 filing on May 28, 2025. The company secured immediate access to $250 million of a $1.6 billion debtor-in-possession financing package. The restructuring process, supported by strategic partners including United Airlines, American Airlines, and AerCap, aims to significantly reduce Azul's leverage while maintaining normal operations. The airline confirms all tickets, loyalty points, and customer benefits will be honored. The Second Day hearing is scheduled for July 9, 2025. CEO John Rodgerson emphasized that these approvals represent a crucial step toward the company's long-term success and financial transformation.

Positive

• Secured immediate access to $250 million DIP financing with total package of $1.6 billion
• Court approved all First Day motions, enabling continued normal operations
• Strong support from key partners including United Airlines, American Airlines, and AerCap
• Company will continue honoring all tickets, loyalty points, and customer benefits

Negative

• Company filed for Chapter 11 bankruptcy protection
• Significant leverage issues requiring restructuring
• Financial distress potentially affecting long-term stability
• Restructuring process may take considerable time with Second Day hearing scheduled for July

Insights

Bankruptcy Restructuring Specialist

Azul's Chapter 11 filing shows strong stakeholder support and initial court approvals, positioning for reduced leverage while maintaining operations.

Azul has successfully navigated the critical first phase of its Chapter 11 bankruptcy process, receiving court approval for all initial motions just two days after filing on May 28, 2025. The court has granted immediate access to $250 million of a larger $1.6 billion debtor-in-possession (DIP) financing package, which is a significant positive indicator for the restructuring process.

The company has secured substantial backing from major industry partners including United Airlines, American Airlines, and AerCap - support that dramatically increases the likelihood of a successful reorganization. This level of strategic partner involvement is uncommon in airline bankruptcies and suggests confidence in Azul's underlying business model despite its current financial challenges.

The primary restructuring goal appears focused on deleveraging rather than operational overhauls, with CEO John Rodgerson explicitly stating the process will "significantly reduce leverage" while continuing to generate cash. This indicates the core business remains viable but was hampered by unsustainable debt levels.

From an operational perspective, the airline has emphasized business continuity with all customer-facing elements including tickets, loyalty points, and travel packages being honored during the restructuring. This approach helps preserve brand equity and revenue streams during the bankruptcy process.

The scheduled "Second Day" hearing on July 9, 2025, will be the next critical milestone, where temporary approvals will be considered on a final basis. With Davis Polk & Wardwell and other top-tier restructuring advisors guiding the process, Azul appears well-positioned to achieve its financial transformation goals while maintaining operational integrity.

Company operations and sales continue as usual, honoring all tickets, loyalty points, travel packages and Customer benefits

Secures approval to access debtor-in-possession financing to bolster liquidity during restructuring

Reaffirms commitment to safely connecting Brazil with Customer service of excellence  

SÃO PAULO, May 30, 2025 /PRNewswire/ -- AZUL S.A. (B3: AZUL4; NYSE: AZUL) ("Azul" or "Company"), the largest airline in Brazil by number of flight departures and destinations, announced today that following a successful First Day Hearing, it received interim court approvals for all of its "First Day" motions related to the Company's voluntary Chapter 11 petitions filed in the United States on May 28, 2025.

Among other relief, the Court granted approval for the Company to immediately access US$250 million of its US$1.6 billion debtor-in-possession ("DIP") financing. This financing, combined with other Court approvals and revenue generated from Azul's ongoing operations, will provide sufficient liquidity to support the continued, uninterrupted operations as the Company works to transform its financial future.

"The Court's approval of all of our first day motions marks a pivotal milestone in positioning Azul for long-term success," said John Rodgerson, Chief Executive Officer of Azul. "These approvals, along with the strong support of our key financial stakeholders, including United Airlines, American Airlines, and AerCap, enable us to continue our accelerated transformation plan for the future. This process will allow Azul to significantly reduce its leverage and continue to generate cash, putting it on par with its global partners."

The "Second Day" hearing to consider the Company's requested relief on a final basis is currently scheduled for July 9, 2025 at 2:00 pm ET.

Additional Information

Stakeholders seeking specific information about Azul's Chapter 11 case can visit its dedicated website at www.azulmaisforte.com.br. For case and claims information, please visit https://cases.stretto.com/Azul or call (833) 888-8055 (toll-free) or (949) 556-3896 (international).

The Company is supported by Davis Polk & Wardwell LLP, White & Case LLP, and Pinheiro Neto Advogados as legal counsel; FTI Consulting as financial advisor; Guggenheim Securities, LLC as investment banker; SkyWorks Capital LLC as fleet advisor; and FTI Consulting, C Street Advisory Group, and MassMedia as strategic communications advisors. The Participating Lenders are supported by Cleary Gottlieb Steen & Hamilton LLP and Mattos Filho as legal counsel and PJT Partners as investment banker. United Airlines is supported by Hughes Hubbard & Reed LLP and Sidley Austin LLP as legal counsel and Barclays Investment Bank as investment banker. American Airlines is supported by Latham & Watkins LLP as legal counsel. AerCap is supported by Pillsbury Winthrop Shaw Pittman LLP as legal counsel.

About Azul

Azul S.A. (B3: AZUL4, NYSE: AZUL), the largest airline in Brazil by number of flight departures and cities served, offers 900 daily flights to over 150 destinations. With an operating fleet of over 200 aircrafts and more than 15,000 Crewmembers, the Company has a network of 300 non-stop routes. Azul was named by Cirium (leading aviation data analysis company) as the most on-time airline in the world in 2023. In 2020 Azul was awarded best airline in the world by TripAdvisor, the first time a Brazilian flag carrier earned the number one ranking in the Traveler's Choice Awards. For more information, access www.voeazul.com.br/imprensa.

View original content:https://www.prnewswire.com/news-releases/azul-receives-court-approvals-to-move-forward-with-accelerated-transformation-process-for-the-future-together-with-its-strategic-partners-302469597.html

SOURCE Azul S.A.

FAQ

Why did Azul Airlines (AZUL) file for Chapter 11 bankruptcy?

Azul filed for Chapter 11 to transform its financial future and reduce its leverage while maintaining normal operations, supported by $1.6 billion in DIP financing and strategic partners including United Airlines and American Airlines.

Will Azul Airlines continue operating during Chapter 11 restructuring?

Yes, Azul will continue normal operations, honoring all tickets, loyalty points, travel packages, and customer benefits during the restructuring process.

How much DIP financing did Azul secure in its bankruptcy process?

Azul secured $1.6 billion in total DIP financing, with immediate access to $250 million following First Day motion approvals.

What happens to Azul Airlines loyalty points during bankruptcy?

Azul has confirmed that all loyalty points will be honored and remain valid during the restructuring process.

When is Azul's Second Day bankruptcy hearing scheduled?

Azul's Second Day hearing is scheduled for July 9, 2025, at 2:00 pm ET.