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Azul's Turnaround, Explained: Profit In Bankruptcy And A Leaner Future
(MENAFN- The Rio Times) Azul, Brazil's third-largest airline, is doing something unusual: it is making money while restructuring in U.S. court.
In September, the company posted a preliminary operating profit of R$ 376.7 million ($70.0 million) on a 20.6% margin, with net operating revenue of R$ 1.831 billion ($340.1 million) and adjusted EBITDA of R$ 613.8 million ($114.0 million).
It finished the month with R$ 795.91 million ($147.8 million) in cash and R$ 2.6 billion ($482.9 million) in receivables. These figures are preliminary and unaudited, but they show a core business that is generating cash, not burning it.
What's happening and why it matters to outsiders: Azul filed for Chapter 11 in New York-essentially a rule-of-law process that lets a company renegotiate debts while continuing to operate flights.
For expats and international readers, this signals a market-based fix rather than political rescue. Management aims to exit with net leverage of about 2.5× and near-term goals of R$ 5.7 billion ($1.06 billion) in net operating revenue and R$ 1.99 billion ($369.6 million) in adjusted EBITDA.
Longer-term growth assumptions have been trimmed, favoring dependable cash generation over flashy expansion. The story behind the story is Brazil's operating reality.
Airlines here grapple with expensive fuel priced off the dollar, a volatile currency, and a heavy tax and fee burden. In that environment, balance-sheet discipline matters.
Azul pursues private restructuring to cut costs and boost resilience
Azul's plan leans into private negotiation with lessors and manufacturers, clearer covenants, and tighter costs-tools generally preferred by market -oriented policymakers who want competition and consumer value without shifting corporate losses onto taxpayers.
If it works, financing costs should fall, resilience to fuel and FX shocks should improve, and travelers benefit from a steadier, privately run carrier.
There are still risks-talks could stretch, margins could narrow if oil spikes or the real weakens. But the direction is clear: keep flying, keep earning, and leave court protection lighter and more predictable.
In September, the company posted a preliminary operating profit of R$ 376.7 million ($70.0 million) on a 20.6% margin, with net operating revenue of R$ 1.831 billion ($340.1 million) and adjusted EBITDA of R$ 613.8 million ($114.0 million).
It finished the month with R$ 795.91 million ($147.8 million) in cash and R$ 2.6 billion ($482.9 million) in receivables. These figures are preliminary and unaudited, but they show a core business that is generating cash, not burning it.
What's happening and why it matters to outsiders: Azul filed for Chapter 11 in New York-essentially a rule-of-law process that lets a company renegotiate debts while continuing to operate flights.
For expats and international readers, this signals a market-based fix rather than political rescue. Management aims to exit with net leverage of about 2.5× and near-term goals of R$ 5.7 billion ($1.06 billion) in net operating revenue and R$ 1.99 billion ($369.6 million) in adjusted EBITDA.
Longer-term growth assumptions have been trimmed, favoring dependable cash generation over flashy expansion. The story behind the story is Brazil's operating reality.
Airlines here grapple with expensive fuel priced off the dollar, a volatile currency, and a heavy tax and fee burden. In that environment, balance-sheet discipline matters.
Azul pursues private restructuring to cut costs and boost resilience
Azul's plan leans into private negotiation with lessors and manufacturers, clearer covenants, and tighter costs-tools generally preferred by market -oriented policymakers who want competition and consumer value without shifting corporate losses onto taxpayers.
If it works, financing costs should fall, resilience to fuel and FX shocks should improve, and travelers benefit from a steadier, privately run carrier.
There are still risks-talks could stretch, margins could narrow if oil spikes or the real weakens. But the direction is clear: keep flying, keep earning, and leave court protection lighter and more predictable.
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