BRAZIL Trends and Developments Contributed by: Marcelo Mello and Bruna Toniolo, Nantes Mello Advogados
facilities, potentially backed by Chinese development financiers like the China Development Bank (CDB) (AirInsights). Though still in exploratory stages, these deals could challenge Western OEM dominance and introduce layered structuring challenges related to registration, certification, and financing risk. Restructuring and Workouts: Lessons from High- Profile Cases Azul’s Chapter 11: A structured reset On 28 May 2025, Azul initiated voluntary Chapter 11 proceedings in the USA with pre-arranged sup - port from stakeholders, securing approximately USD1.6 billion in debtor-in-possession (DIP) financ - ing comprised of USD670 million in new liquidity and up to USD 950 million in equity commitments from strategic backers such as AerCap, United Airlines, and American Airlines (Azul S.A., Form 6-K). Azul aims to eliminate over USD2 billion in debt and halve its debt-to-EBITDA ratio. The court granted access to USD250 million of the DIP facility on the first day, safeguarding operational continuity. Highlighting operational resilience, Azul continued flights through - out, with its board appointing a special committee to oversee restructuring efforts. Gol’s exit financing: restructuring concluded Following its early-2024 Chapter 11 filing, Gol secured a USD1.9 billion exit financing package in May 2025. It includes USD1.25 billion from anchor investors, USD50 million from an ad hoc group, and USD570 mil - lion from other investors, with interest rates trimmed to 14.38% (Hardee). The US Bankruptcy Court approved Gol’s restructuring plan on 20 May 2025, paving the way for an exit and imminent fleet expansion. Taxi, maintenance concessions, and receivables factor - ing supported a cost-efficient emergence. Gol offi - cially exited Chapter 11 in June 2025, revealing cash reserves of USD900 million, new Boeing 737 MAX deliveries, expansion into regional routes, and open - ness to Embraer aircraft acquisitions. Implications for market practice These high-profile reorganisations offer key lessons: (i) pre-arranged creditor support smooths restructur - ing processes; (ii) multistage recovery plans, blending DIP financing, equity backstopping, and exit notes, can secure operational and financial viability; and (iii)
Chapter 11 is the main vehicle for fleet rationalisation and right-sizing. ESG and sustainable aviation financing In October 2024, Brazil advanced its environmen - tal agenda with the enactment of the “Fuels of the Future” law (Brazil, Lei No. 14.400/2024). The legisla - tion introduced a national SAF mandate, marking a critical step toward decarbonising aviation by requir - ing a minimum percentage of SAF in jet fuel blends. The mandate aims to cut greenhouse gas emissions and align Brazil with global climate goals while rein - forcing its leadership in sustainable aviation. To support SAF adoption and market participation, Brazil implemented mechanisms such as Low Carbon Aviation Fuel (LCAF) credits and the broader Renova - Bio biofuel programme. Launched in 2020, RenovaBio sets carbon intensity reduction targets for producers and distributors, awarding tradable decarbonisation credits for verified reductions. LCAF credits extend this model specifically to aviation fuels, creating finan - cial incentives for increased SAF use (Brazil, EPE). These mechanisms promote environmental responsi - bility while making ESG-focused financing and leasing more attractive and viable. Airlines committing to SAF and carbon reduction can access preferential terms and sustainability-linked loans. For financiers and les - sors, the frameworks offer quantifiable metrics and compliance pathways that reduce risk and support investments in green aircraft and technologies. Together, Brazil’s renewable energy profile, SAF man - date, and incentive programmes are fostering a grow - ing ecosystem where sustainable aviation practices are economically incentivised, supporting the coun - try’s broader climate commitments and creating new opportunities within the aviation finance sector. Foreign Investment and Tax Landscape Influx of international capital Global lessors are deepening their presence in Brazil in multiple ways. Avolon, the world’s second-largest aircraft leasing company, is partnering with Gol and working with ANAC to support the development of eVTOL (electric vertical take-off and landing) opera - tions in Brazil, including regulatory approvals and
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