Azul has secured court approval from the US Bankruptcy Court for the Southern District of New York on September 22, allowing the airline to restructure aircraft and engine leases amid its Chapter 11 reorganisation.
In separate orders filed to the company’s restructuring docket, the company will assume leases, while returning select aircraft on lease with lessors.
The airline will assume its leases with Avolon for one A320neo and four A330-900s. The airline will return two A330-900s, one A330-200, and one E190-200 to the lessor. The court’s rejection orders are effective September 22, 2025.
Azul will also return two E190-200s to ICBC Leasing. The rejection order will be effective September 25 and September 27, respectively.
The company was also ordered to return one Pratt & Whitney PT6A-140 engine — used on Cessna aircraft — to engine lessor Willis Lease. This return was effective September 3, 2025. Azul had 23 Cessna aircraft as of the end of June 2025.
Another court document showed that Azul amended and topped-up senior secured term loan secured by three CFM LEAP-1A engines financed by PK AirFinance, as well as refinancing two additional LEAP-1A engines leased to Azul. The airline secured new financing with PK AirFinance for up to two GTF PW1923G engines.
Azul filed its Chapter 11 restructuring plan with a US Bankruptcy Court on September 16, 2025.
In a disclosure statement filing with the US Bankruptcy Court for the Southern District of New York, the airline detailed that it would conduct an equity rights offering, raising up to $950 million of new equity interests — backed by $650 million in commitments from major creditors and strategic partners such as American Airlines and United Airlines. Strategic investors may participate in the equity rights offering up to $300 million.
Azul said in a court filing in June it intended to return around 20 aircraft and eight engines. As of the end of June, the airline had an operating fleet of 186 aircraft.
The airline added that it will emerge from its restructuring with a “streamlined and cost-effective fleet”.
In August, the airline received court approval for its agreement with AerCap. The agreement 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. In addition, a court filing stated that Azul agreed to purchase two A330 airframes and lease two Trent 700 engines, which power the A330, from AerCap.
In June, the airline secured $1.6bn of debtor-in-possession (DIP) financing. Of that, around $670 million is new money liquidity.
Davis Polk & Wardwell is advising Azul on its restructuring.