Azul Airlines has started the Chapter 11 bankruptcy process in the United States as part of its financial restructuring plans. The airline confirmed this decision on May 28, 2025, while assuring that its flight operations and employee payments will continue as usual throughout the process. This move aims to reduce the heavy debt Azul accumulated in recent years, especially during the COVID-19 pandemic, when the airline focused on keeping its services running despite falling revenue.
As part of this restructuring, the São Paulo-based airline entered into “restructuring support agreements” with major stakeholders. These include bondholders, aircraft leasing firm AerCap, and airline partners American Airlines and United Airlines. These agreements form a large part of Azul’s plan to stabilize its financial position. The restructuring includes $1.6 billion in financing and the removal of approximately $2 billion in debt. In addition, the plan provides for equity financing of up to $950 million once Azul exits the bankruptcy process.
Azul Airlines confirmed that the $950 million in equity financing includes $300 million in investments from American Airlines and United Airlines. However, these investments depend on the satisfaction of certain conditions. With these contributions, Azul Airlines aims to strengthen its long-term stability and support its recovery efforts after years of financial difficulties.
Financial performance and ongoing challenges
Despite the bankruptcy filing, Azul Airlines has shown improvement in its recent financial performance. The company posted a profit of R$783 million (approximately $139 million) in the first quarter of 2025, a turnaround from a loss of R$1.1 billion during the same period in 2024. This positive result came during the airline’s strongest seasonal quarter, which usually sees higher demand for travel.
However, Azul Airlines still faces many obstacles. The airline ended 2024 with a loss of R$8.3 billion, reflecting ongoing financial stress. Azul cited “macroeconomic headwinds and aviation supply chain issues” as major causes of the difficult year. These included limited availability of aircraft and engines, disruptions caused by severe weather, and the weakening of the Brazilian real. These challenges have made it harder for the airline to recover fully despite its recent profitability.
Ongoing operations and long-term recovery plans
Through this restructuring process, Azul plans to create a more stable financial foundation and return to sustainable growth. The company assured customers and staff that it would maintain its regular flight schedule and continue paying employees during the restructuring. The goal is to emerge from Chapter 11 with reduced debt, stronger financial backing, and improved long-term prospects.
Azul’s filing does not affect its day-to-day operations. Flights will continue, and the airline will work with its partners and financial backers to complete the process successfully. By addressing its financial pressures while keeping services running, Azul aims to move forward with greater stability in a competitive travel market.
Azul Airlines has taken the next step in managing its debt while keeping its focus on long-term recovery. With support from its partners and careful planning, the airline expects to come out of Chapter 11 with a stronger financial position.
