Brazil’s Azul Eyes Potential Restructuring

The fundamentals at Brazilian airline Azul look good. Revenues are up significantly from before the pandemic, and so are passenger numbers. New business lines, including air freight and vacations, are producing high margin income.

All of this lifted Azul, which is based outside São Paulo, to a strong 9 percent operating margin in the third quarter, its latest financial data available, despite elevated cost pressure. And its share of the domestic Brazilian market? Up 6 points from 2019 to more than 29 percent last year, data from Brazil's aviation authority, ANAC.

Azul's in a good place to ride the continued travel recovery, right? Maybe not.

The airline engaged advisor Seabury and law firm Weil to advise it on a potential restructuring, Air Finance Journal has reported. The airline, according to the report, hopes to avoid a court-led process but has not ruled out the possibility of a U.S. Chapter 11 filing.