DALLAS — Brazil’s GOL Linhas Aereas (G3) Inteligentes has filed for Chapter 11 bankruptcy in New York. As part of the bankruptcy process, G3 has secured US$950 million in debtor-in-possession financing from bondholders, including its parent company, Abra Group, pending approval. This financing will provide substantial liquidity to support the low-cost carrier’s (LCC) operations, which are expected to continue as normal throughout the bankruptcy process.
GOL has faced financial difficulties due to the pandemic and the resulting decrease in air travel demand. Unlike the U.S. government’s financial aid to its airline industry, Brazilian carriers did not receive similar assistance during COVID-19.
The airline’s decision to file for Chapter 11 bankruptcy comes after the airline hired Seabury Capital in December to evaluate its capital structure. The Brazilian LCC, based in Rio de Janeiro, has gone through several rounds of restructuring and capital-raising to navigate these challenges.
GOL’s CEO, Celso Ferrer, expressed confidence that the bankruptcy process will help the airline address the challenges caused by the pandemic while maintaining high standards of service for its clients. The company believes that the measures being taken will allow G3 to continue offering competitive fares.
The bankruptcy filing will allow G3 to restructure its short-term financial obligations and strengthen its long-term capital structure Despite the bankruptcy filing, the Brazilian LCC remains committed to providing its services and aims to emerge from this process in a stronger position.
Featured image: GOL Boeing 737-8 (PS-GPN). Photo: Rohan Ramalingam/Airways