Brazilian Carrier Azul Will Turn Profit in 2026 After Bankruptcy
(Bloomberg) — Currently United Airlines Holdings Inc. and American Airlines Group Inc. Azul SA, the Brazilian budget carrier backed by , expects a bankruptcy-triggered debt reduction and the renegotiation of a number of aircraft leases to help it turn a profit over the next two years.
The airline will refocus its growth plans on the domestic market but increase flights to the United States to meet strong demand for World Cup football matches next summer, Chief Executive John Rodgerson said in an interview. Azul will continue to accept deliveries of new aircraft from Airbus SE and Embraer SA.
“The cash flow of the business has improved significantly,” Rodgerson said. “We will generate cash in 2026. We will generate cash in 2027. That is the plan.”
Azul received permission from a U.S. court on Friday to emerge from Chapter 11 bankruptcy in a deal that reduced more than $2.6 billion in debt and aircraft lease obligations. It also raised about $950 million from new equity investments including United and American.
Rodgerson said the reduction in debt would save Azul $200 million a year in interest payments.
Founded in 2008 with a handful of Embraer jets, Azul took on piles of debt to add new planes and expand rapidly. After struggling with exchange rate pressures and the lingering effects of the pandemic, Azul followed larger rivals in the region and sought protection from Chapter 11 in May.
“This airline will be much stronger on the back end,” Rodgerson, 49, said. “This is a much more moderate growth plan.”
United and American invested $100 million in Azul, allowing them to separately own 8.5% of Azul’s new equity when it leaves Chapter 11, according to Bloomberg Intelligence. Azul plans to offer codeshare flights with U.S. carriers, giving them access to more than 100 Brazilian destinations, Rodgerson said.
Azul does not expect the recent increase in immigration enforcement in the U.S. to dampen demand. Rodgerson says Brazilians love traveling to the country.
–With help from Rachel Gamarski.
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