Brazilian airline Azul has received US court approval for motions in its chapter 11 restructuring proceedings, including its agreement with AerCap and the rejection of multiple leases and contracts.
“These approvals mark an important step in Azul's broader transformation plan and reflect continued momentum in its restructuring process,” said Azul in a statement.
The agreement with AerCap covered most of Azul's aircraft and lease liabilities. The deal is expecting to provide the airline with over $1bn in savings in regards to the operation of its fleet, according to the airline's estimates.
“The approval of the fleet-related lease and contract rejections will generate additional savings without impacting the company's overall fleet, routes, or ability to serve customers as these aircraft and engines were not flying,” Azul said.
During AerCap's second quarter earnings call, the lessor said it expects “minimal impact” from the airline's bankruptcy in the third quarter.
“They’ve been making progress in the restructuring plan, we don’t see any impact compared to where we were… We’re fully provisioned there for how this restructuring should play out,” said AerCap CFO Peter Juhas.
Azul said it “remains committed” to finalising its restructuring plan and will continue to support both its crew and customers.
In July, Azul had received final court approval for its $1.6bn debtor-in-possession (DIP) financing. The airline said this will allow it to operate its business as usual, while advancing its transformation plan.