Brazil’s Gol filing for Chapter 11 bankruptcy protection in US
Brazilian airline Gol reported Thursday that it is filing for Chapter 11 bankruptcy protection in the United States, with a $950 million financial commitment from its holding company Abra Group.
Abra also controls the airline Avianca, although both operate separately.
The decision was somewhat expected after media reports earlier this month that Gol was considering action, even as the company maintained that it was seeking a “consensual” restructuring in talks with creditors.
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Gol said it will use the bankruptcy protection to “restructure its finances and strengthen long-term business operations, while continuing to operate normally.”
Analysts and rating agencies say Gol has solid operating figures in a context of strong demand for air transport in Brazil, but that high lease and interest expenses have been pressuring its cash flow and negatively affecting its debt profile.
The company has also faced capacity problems due to delays in Boeing aircraft deliveries, which according to Gol’s CEO are preventing it from growing at the pace it would like.
Gol had a 33% market share in Brazil’s aviation sector last year, second only to LATAM Brazil.
With information from Reuters
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