Azul has received court approval for its Chapter 11 reorganisation plan, the Brazilian airline said on Friday (December 12).
“The plan received overwhelming support from all voting creditors, and in a hearing held today, the court approved the company's reorganisation plan, marking the successful completion of a key procedural milestone in the Chapter 11 process,” said Azul in a statement.
“This decision reinforces the overall consistency of the proposed restructuring, enabling the company to advance to the next phases of implementation.”
The airline entered Chapter 11 restructuring in May 2025 after struggling financially in the years that followed the pandemic. The impact of COVID, along with macroeconomic volatility and rising industry costs drove it to higher debt.
With the court approval, Azul will eliminate over $2bn in debt, as well as renegotiate its lease terms and streamline its fleet to improve long-term financial and operational sustainability.
The restructuring is backed by agreements with key stakeholders, including debt holders, aircraft lessor AerCap and strategic partners United Airlines and American Airlines. Those agreements provide approximately $1.6 billion in debtor-in-possession financing during the proceedings and up to $950 million in new capital when the airline emerges from Chapter 11. United and American have each committed $100 million in equity investments, subject to regulatory approvals and completion of the restructuring.
Under this plan, the majority of Azul's existing debt will be converted into equity through a series of public offerings and capitalisation steps. These are expected to be launched by the end of the year. Roughly 97% of the share capital is expected to be held by first-lien creditors and 3% by second-lien creditors, before any new capital raising.