Azul S.A. Successfully Emerges from Chapter 11

Rhea-AI Summary

Azul (B3: AZUL53; OTC: AZULQ) announced it has emerged from Chapter 11 effective Feb 25, 2026, after a court-confirmed Plan of Reorganization.

The company secured US$850 million of new equity, raised US$1.375 billion in exit notes, and reduced debt and lease obligations by about US$2.5 billion, achieving pro-forma net leverage under 2.5x.

Positive

• Raised US$850 million in new equity at emergence
• Reduced debt and lease liabilities by US$2.5 billion
• Pro-forma net leverage reduced to less than 2.5x
• Fleet debt cut by 36% and leasing costs down ~33%
• Secured US$1.375 billion of new exit notes

Negative

• Exit financing includes US$1.375 billion of new debt
• American Airlines US$100 million equity commitment is subject to antitrust approval
• Debt restructuring required court-supervised Chapter 11 process

Key Figures

New equity investments: US$850 million United equity: US$100 million American commitment: US$100 million +5 more

8 metrics

New equity investments US$850 million Equity received at emergence from Chapter 11

United equity US$100 million Portion of new equity from United Airlines

American commitment US$100 million Incremental equity investment subject to antitrust approval

Exit notes raised US$1.375 billion New exit notes issued at emergence

Debt and leases cut US$2.5 billion Reduction in loans, financing debt and lease liabilities vs pre-petition

Interest reduction over 50% Reduction in annual interest paid on loans and financing

Pro-forma net leverage less than 2.5x Net leverage at emergence from Chapter 11

Customers served 32 million Customers served in 2025 during restructuring

Market Reality Check

Price: $0.5000 Vol: Volume 2,918,692 is below...

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$0.5000 Last Close

Volume Volume 2,918,692 is below 20-day average 8,657,573, suggesting limited pre-news positioning. low

Technical Shares at 0.50 are trading below the 200-day MA of 2.24 and remain far under the 6.29 52-week high.

Peers on Argus

No peer stocks in the listed industry appeared in the momentum scanner; recent p...

No peer stocks in the listed industry appeared in the momentum scanner; recent price action appears stock-specific rather than sector-driven.

Market Pulse Summary

This announcement details Azul’s emergence from Chapter 11 with a markedly reshaped capital structur...

Analysis

This announcement details Azul’s emergence from Chapter 11 with a markedly reshaped capital structure, including US$850 million of new equity, US$1.375 billion in exit notes, and US$2.5 billion in debt and lease reductions, leading to net leverage below 2.5x. Operationally, the airline served 32 million customers in 2025 and maintained high on-time performance. Investors may watch future filings and traffic trends to assess how these changes translate into sustained profitability and balance-sheet resilience.

Key Terms

chapter 11, plan of reorganization, equity investment, net leverage, +1 more

5 terms

chapter 11 regulatory

"announced the successful completion of its voluntary financial restructuring process and emergence from Chapter 11."

Chapter 11 is a U.S. bankruptcy process that lets a financially distressed company keep operating while it reorganizes its debts and business plan under court supervision. Think of it as a formal pause that allows the company to renegotiate payments, shed contracts or assets, and seek a path to profitability instead of being liquidated; investors watch it because it can change the value and priority of claims, equity dilution, or the likelihood of recovery.

plan of reorganization regulatory

"The Company's Plan of Reorganization, previously confirmed by the U.S. Bankruptcy Court on December 19, 2025, is now effective."

A plan of reorganization is a formal blueprint used during bankruptcy to rearrange a company’s debts, assets and ownership so it can keep operating. It lays out who gets paid, what creditors and shareholders receive, and how the business will change going forward; think of it as a court-approved debt and recovery roadmap that decides whether investors keep value, receive new securities or cash, or lose their stake.

equity investment financial

"Executed a commitment with American Airlines for an incremental US$100 million equity investment, subject to antitrust approval"

An equity investment is buying ownership in a company by purchasing its shares, which gives you a claim on future profits and a portion of the company's value. It matters to investors because returns depend on the company’s growth and performance—like owning a slice of a pie that can grow or shrink—so you can gain through rising share prices or dividends but also risk losing value if the business falters.

net leverage financial

"Achieved pro-forma net leverage of less than 2.5x at emergence"

Net leverage measures how many years it would take for a company to pay off its outstanding debt using its annual operating cash flow, after subtracting cash on hand from total debt. Think of it like a household’s mortgage balance minus savings divided by yearly income; a lower number means the company is in a safer position to handle debt, while a higher number signals greater financial risk and potential pressure on profits or growth.

antitrust approval regulatory

"Executed a commitment with American Airlines for an incremental US$100 million equity investment, subject to antitrust approval"

A government sign-off that a merger, acquisition, or business practice does not unfairly reduce competition or create a monopoly. It matters to investors because approval clears a path for expected cost savings, market share gains, or strategic plans to proceed, while rejection or conditions can delay deals, force changes, reduce projected value, or trigger fines — like a referee deciding whether a play is legal and can stand.

AI-generated analysis. Not financial advice.

Emerges with a significantly strengthened balance sheet, positioned for long-term stability and sustained growth

Received US$850MM of new equity investments, reduced debt and lease obligations by approximately US$2.5B and achieved the lowest leverage in the Company's history

SÃO PAULO, Feb. 25, 2026 /PRNewswire/ -- AZUL S.A. (B3: AZUL53; OTC: AZULQ) ("Azul" or "Company"), the largest airline in Brazil in number of cities served and direct domestic routes, announced the successful completion of its voluntary financial restructuring process and emergence from Chapter 11. The Company's Plan of Reorganization, previously confirmed by the U.S. Bankruptcy Court on December 19, 2025, is now effective.

Through this process, Azul achieved a comprehensive balance sheet and operational transformation and emerges from Chapter 11 having achieved its key objectives for this process, including strengthening its balance sheet, enhancing liquidity, reducing lease expense and liabilities, and improving every aspect of its operations to support long-term sustainability and sustainable growth. The restructuring was supported by key financial stakeholders, including its existing bondholders, its largest lessor, AerCap, representing the majority of the Company's aircraft lease liability, and other lessors, OEM and suppliers counterparties, and its strategic partners, United Airlines and American Airlines.

Key Achievements of Restructuring

• Significantly Strengthened Financial Position
  • Received US$850 million of new equity investments at emergence, including from existing bondholders and US$100 million from United Airlines
  • Executed a commitment with American Airlines for an incremental US$100 million equity investment, subject to antitrust approval
  • Raised US$1.375 billion of new exit notes
  • Reduced loans and financing debt and lease liabilities by US$2.5 billion, compared with pre-petition amounts
  • Reduced annual interest paid on loans and financing by over 50%
  • Reduced fleet debt by 36% and aircraft leasing costs by approximately one-third, without reducing operating capacity
  • Achieved pro-forma net leverage of less than 2.5x at emergence

• Swift and Efficient Court-Supervised Process
  • Successfully completed restructuring in less than nine months
  • Maintained 85.1% performance on time
  • Operated approximately 800 flights per day, without disruption

• Strong Operational Performance
  • Achieved 2025 performance targets despite ongoing restructuring
  • Served 32 million customers in 2025 – the largest in Azul's history
  • Ranked the 4^th most on-time airline in the world
  • Served over 130 cities across 250 routes
  • Operated a fleet of approximately 175 aircraft

"This is a defining milestone for Azul," said John Rodgerson, Chief Executive Officer of Azul. "In just under nine months, we completed a comprehensive restructuring that has materially strengthened our balance sheet and positioned Azul for long-term stability. We are emerging from Chapter 11 with the support of some of the most respected financial and strategic partners in global aviation."

"I am especially proud of our Crewmembers, whose dedication and resilience allowed us to continue operating at a high level throughout this process. Their unwavering commitment to our Customers ensured Azul never lost focus on what matters most: connecting Brazil with excellence and reliability."

With a significantly improved capital structure, Azul's emergence from Chapter 11 marks a pivotal moment in the Company's transformational journey. With a strengthened financial position and the continued support of its stakeholders, Azul is entering its next phase from a position of strength, and remains focused on connecting Brazil like no other airline while delivering industry-leading service, reliability and value to Customers.

The Company's competitive advantages are greater than ever, supported by:

• The largest network in Brazil
• A uniquely diversified business model, including its Azul Cargo and Azul Viagens businesses and the Azul Fidelidade loyalty program
• A modern, efficient fleet comprised of approximately 80% next-generation aircraft
• Strong brand recognition and strategic international partnerships

Looking ahead, Azul remains focused on disciplined and sustainable growth, continued operational excellence and delivering long-term value to Customers, Crewmembers, and our partners worldwide.

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 and MassMedia as strategic communications advisors.

About Azul

Azul S.A. (B3: AZUL53; OTC: AZULQ), the largest airline in Brazil in terms of cities served, offers more than 800 daily flights to 137 destinations. With an operational fleet of around 200 aircraft and over 15,000 crew members, the company operates a network of 250 direct routes. Azul was ranked by Cirium (a leading aviation data analytics company) as the 2nd most punctual airline in the world in 2023. In 2020, Azul was awarded as the best airline in the world by TripAdvisor, marking the first time a Brazilian airline achieved first place in the Traveler's Choice Awards. For more information, visit Azul's website, www.voeazul.com.br/imprensa. 

View original content:https://www.prnewswire.com/news-releases/azul-sa-successfully-emerges-from-chapter-11-302697164.html

SOURCE Azul S.A.

FAQ

What did Azul (AZUL) announce about emerging from Chapter 11 on Feb 25, 2026?

Azul announced it has emerged from Chapter 11 after a court-confirmed Plan of Reorganization effective Feb 25, 2026. According to the company, the restructuring strengthened the balance sheet and reduced debt and lease obligations by about US$2.5 billion.

How much new equity did Azul (AZUL) receive at emergence and who invested?

Azul received US$850 million of new equity at emergence, including US$100 million from United Airlines. According to the company, existing bondholders and strategic partners participated in the equity raise.

What debt and financing changes did Azul (AZUL) achieve through restructuring?

Azul reduced loans, financing debt and lease liabilities by approximately US$2.5 billion and cut fleet debt 36%. According to the company, annual interest paid on loans and financing fell by over 50%.

What is Azul's (AZUL) post-restructuring leverage and liquidity position?

Azul reports pro-forma net leverage of less than 2.5x at emergence and raised US$1.375 billion in exit notes. According to the company, these moves materially strengthen liquidity and capital structure.

Will Azul (AZUL) continue normal operations after emerging from Chapter 11?

Yes. Azul continued operating about 800 flights per day and served 32 million customers in 2025. According to the company, operational performance remained strong during restructuring with 85.1% on-time performance.

What investor risks remain after Azul's (AZUL) restructuring completed in February 2026?

Material risks include the new exit notes and remaining debt service obligations and the conditional US$100 million American Airlines commitment pending antitrust approval. According to the company, these are part of the completed reorganization.