Welcome to the 143rd Pari Passu newsletter.

In one of our most-read articles, we explored the case of Spirit Airlines and the company’s proposed triple dip strategy. Spirit, like the company we will be exploring today, is also a low-cost carrier airline. Since the pandemic, several other airlines have fallen into a similar path of bankruptcy – including Azul, another Latin American airline that just filed for Chapter 11 as well. 

While many airline bankruptcies are driven primarily by shifting consumer preferences, our case study today on GOL Airlines explores the operational disruptions beyond the company’s control that led to its ultimate downfall. From the grounding of a crucial segment of its fleet to a brutal combination of pandemic-induced demand collapse and fx volatility, GOL presents a different, and arguably more complicated, narrative for us to explore.

AMC’s LME scorecard — 9fin unpacks one of the market's most complex LMEs

AMC Entertainment has closed another chapter in its complex liability management saga, settling with a litigious group of 7.5% first lien noteholders who were previously left out of a major 2024 debt deal.

This new deal grants them improved security and new notes, while rewarding early-consenting term loan holders and the Wachtell-led convert group with outsized gains. Meanwhile, holdouts and uninvolved creditors see reduced recoveries or none at all. This analysis outlines the winners and losers of the deal, highlighting how litigation pressure and strategic timing influenced outcomes. Retail shareholders continue to be heavily diluted, having funded much of the debt maneuvering.

9fin’s team unpacks the legal nuance, capital structure shifts, and deal dynamics — backed by exclusive buyside sourcing — to decode one of the market’s most complex LMEs.

Airline Industry Overview

The global airline industry operates on thin margins and high fixed costs, with the average profit per passenger globally reaching only $7. This industry exists within a uniquely technical and capital-intensive framework shaped by cyclical demand and high regulatory restrictions. Volatile costs such as fuel and recurring costs like aircraft maintenance expenses, especially as the global fleet of planes grows older, consume large portions of revenue [2]. Intense competition driven by cost-conscious passengers also makes maintaining a sustainable margin exceedingly difficult. 

The airline sector is comprised of a variety of business models. Below are a few examples of passenger (non-cargo) carriers [3]: 

• Full-service network carriers (FSNC) serve all passenger market segments and often carry cargo as well. These models use hub-and-spoke networks, a flight routing system where traffic flows through a central airport (hub) that connects multiple destinations (spokes). Examples include Emirates and Singapore Airlines, which place a higher priority on network breadth and service quality rather than offering lower fares.

• Low-cost carriers (LCC) target price-sensitive passengers and utilize point-to-point networks, another type of routing system that connects destinations directly without requiring transfers through a central hub. Examples include Southwest and JetBlue Airways, which, as the name of this category suggests, focus on low prices as the main differentiating feature. Ultra low-cost carriers (ULCC), like Frontier and Spirit Airlines, operate the same business model as LCCs but target the most price-conscious passengers; ULCCs drive prices even lower than LCCs. 

• Regional carriers primarily operate short-haul flights between smaller cities and major hubs, often under capacity purchase agreements (CPAs) with larger network airlines. This means that regional carriers fly on behalf of their major airline partners with smaller aircraft and lower seat counts, utilizing the major airline’s branding and flight codes. An example is Eurowings, which operates under Lufthansa. 

Given their operational efficiency and appeal to price-sensitive travelers, LCCs in particular have become more popular in global aviation, particularly in emerging markets [3]. Their simplified model offers a stark contrast to traditional FSNCs and plays a central role in shaping competitive dynamics, especially in regions like Latin America. Unlike FSNCs that often operate a mix of wide-body and narrow-body aircraft, LCCs usually standardize their fleets around a single aircraft family, such as the Boeing 737 or Airbus, since narrow-body aircraft are easier to maintain. By operating fleets of one or two types of planes, LCCs can lower training costs for pilots and crews, simplify inventory management for spare parts, and increase efficiency for maintenance. As a result, LCCs routinely achieve daily aircraft utilization rates exceeding twelve block hours, compared to roughly eight hours for FSNCs. Block hours are a standard industry measure that represents the total time from when an aircraft leaves the gate at departure to when it arrives at the gate upon landing. Higher block hour utilization indicates more efficient use of aircraft, which helps spread fixed costs over more revenue-generating flights and supports the low-cost structure that defines the LCC model.  

As we briefly mentioned above, LCCs also rely on point-to-point routing systems. Compared to the hub-and-spoke model for FSNCs, this network design reduces the complexity of scheduling and minimizes turnaround times between flights. The point-to-point system also requires fewer ground personnel. All of this contributes to higher cost savings for LCCs, with the tradeoff being fewer route combinations and limited service to smaller markets [4].

GOL: Brazil’s First LCC

Founded in 2000, GOL Linhas Aéreas Inteligentes SA (GOL) was the first LCC Brazilian airline after its founder, Constantino de Oliveira Junior, introduced the business model to the country. GOL was largely responsible for the tripling of Brazil’s domestic air travel market, which tripled from 30mm passengers in 2001 to nearly 100mm in 2019 [1]; for context, the US domestic air travel market comprised around 800mm passengers in 2019, up from 600mm in 2001 [26] [27]. GOL rapidly captured over one-third of Brazil’s domestic airline market, following closely behind LATAM Brasil and Azul, and has since grown into one of the largest LCCs both in South America and internationally. By the end of 2024, GOL’s network spanned over sixty domestic routes and thirteen destinations in nine foreign countries [1].

Below is GOL’s corporate structure. GOL functions as a holding company that controls a network of nine subsidiaries, both domestic and offshore. Its key Brazilian subsidiaries include GLA, the airline’s main operating arm responsible for flight operations; Smiles Fidelidade, which runs GOL’s loyalty program; and GTX S.A., a holding company. Other Brazil-based entities like Smiles Viagens e Turismo S.A. and its affiliate Smiles Viajes y Turismo S.A. serve as travel agencies. GOL also operates through a number of offshore subsidiaries, including GAC Inc. (Cayman Islands), GOL Finance (Luxembourg), and GOL Finance Inc. (Cayman Islands), which are primarily used for international financing. Smiles Fidelidade Argentina S.A. and Smiles Viajes y Turismo S.A. (Argentina) are international counterparts of GOL’s loyalty and travel businesses. Additionally, GOL Equity Finance (GEF), a Dutch foundation-owned SPV which will become relevant later, issues certain convertible bonds [14]. 

GOL operates an all-Boeing 737 fleet with an average of over eleven block hours per day (meaning each plane is flying, on average, for more than eleven hours daily), which is among the highest utilization rates in the global airline industry. GOL’s high utilization allows the company to spread its fixed costs across more revenue-generating flight hours; the more an aircraft flies, the lower the cost per flight or per passenger becomes. This also helps GOL keep its load factor, the percentage of seats occupied by paying passengers divided by total seat capacity, in the mid 80% range [5]. 

In 2019, the year before distress, GOL was generating around $2.4bn in annual revenue, $600mm gross profit (25% gross margin), $390mm operating income (16% operating margin), and free cash flow of $270mm in 2019 [9]. Net margin has historically been low, with the company only flipping a positive net income after 2016 [7]. The reason why we do not use EBITDA as a metric to assess financial performance here is that it excludes the effect of aircraft lease expenses, a significant operating expense that, when ignored, overstates profitability. In 2019, GOL’s market cap was around $14bn [6], and the company operated a fleet of around 140 Boeing 737 airplanes [9].  

GOL’s core financial performance is supported by two operating segments: flight transportation and loyalty program. The flight transportation segment is made of passenger and cargo revenue, and the company’s overall revenue is driven primarily by its passenger sales. Prior to 2021, GOL’s passenger sales made up around 97% of total revenue; the remaining 3% came from cargo and other sources [11]. Though cargo did not historically, and still does not, make up a significant portion of the company’s revenue, it’s still worth noting that GOL's cargo arm, GOLLOG, is Brazil’s largest air cargo provider. In 2023, GOLLOG led the domestic cargo market with a 36% market share by volume. Revenues from cargo nearly doubled from 2022 to 2023 and continued to rise throughout 2024, accounting for around 7% of GOL’s total revenue by the end of 2024 [1]

In addition to passenger and cargo revenue, GOL recently added a third revenue stream: Smiles, GOL’s GOL’s loyalty program. Smiles was originally a separate publicly-listed entity and was not consolidated into GOL’s core financials until 2021. By the end of 2021, Smiles was generating $150mm in revenue, accounting for just over 10% of total revenues [11]. Bookings made using Smiles rewards accounted for around 20% of total ticket sales by the end of 2024. However, while Smiles made up a larger portion of revenue since its integration into GOL’s core business, passenger revenues continued to make up 90% of total revenue through 2023 [1]. 

International Grounding of Boeing 737 MAX 8

A downside of the LCC model is that its profitability depends heavily on high aircraft utilization and limited revenue. Recall from our summary of passenger carrier types that LCCs are reliant on high volumes of passenger ticket sales and short-haul operations due to the low cost of fares; LCCs cannot charge high prices, so their success depends on the volume of sales. This means that while FSNCs can rely on cargo services and international routes to cushion demand shocks, LCCs are more susceptible to periods of volatility because they have fewer avenues for profitability.  

When LCCs experience financial struggles, these challenges typically stem from some sort of consumer preference change. For example, Spirit’s lack of customer service deterred travelers from choosing it over other low-cost airlines; consumers’ preference for a better experience played a significant role in Spirit’s downfall. 

However, in GOL’s case, the company’s initial challenges were not rooted in consumer preferences. Instead, disruptions to GOL’s fundamental tools of business – its airplanes – were the catalyst for the company’s financial distress. 

Back in 2018, when the company was financially healthy, GOL introduced the first six Boeing 737 MAX 8 aircraft to its fleet of around 120 total planes [8]. Recall that GOL’s entire fleet consists of one aircraft family, the Boeing 737, which is a family of narrow-body jets used by many LCCs for short and medium-haul flights. At the time, the MAX 8 was developed to improve the 737’s fuel efficiency by incorporating a larger and more advanced engine:

The MAX 8 was a natural addition to GOL’s existing fleet of Boeing 737 Next Generation planes because Boeing advertised the aircraft as one requiring no additional training for pilots who could fly 737s. Instead, Boeing recommended a brief computer-based training module, which would allow LCCs like GOL to save money and time through purchasing the MAX 8. However, pilots were not made aware of the inclusion of a system called the Maneuvering Characteristics Augmentation System (MCAS), an automated feature designed to push the nose of the aircraft downward if it detected a dangerously high angle of attack. A high angle of attack means the plane’s nose is pointed too far upward compared to the direction the air is flowing. When this happens, air can no longer flow smoothly over the wings, and the plane may lose lift and start to fall (a dangerous situation called a stall). MCAS was designed to prevent this by automatically lowering the nose, but it sometimes activated when it shouldn’t have [15]. The lack of this critical piece of training information directly led to two fatal crashes in 2018 and 2019, which resulted in nearly 350 passenger deaths in Indonesia and Ethiopia. These incidents resulted in the global grounding of the 737 MAX 8 in March 2019 [17].

When GOL first acquired its shipment of MAX 8 aircraft, the company had estimated these new planes would increase total distance flown and fuel efficiency by 15%, increase the number of international routes to the US by nearly 40 connections, decrease the average age of aircraft from 9.5 years to 7 years by 2022, and lower operating costs (though exact estimates of margin impact were not provided) [8]. While the grounding of the 737 MAX 8 did not immediately present significant liquidity challenges in 2019, GOL’s inability to deploy this new aircraft prevented the company from realizing its benefits, which would start to have a negative impact on the company’s financial health following the pandemic. The company ended 2019 with $300mm in cash, $2.6bn in total debt, and $270mm in free cash flow [9]. 

External Shocks Triggering Distress

Following the grounding of the Boeing 737 MAX 8, airlines across the world faced a sudden drop in demand due to the COVID-19 pandemic. GOL also incurred losses on its financial investments due to foreign exchange volatility involving the Brazilian Real, the details of which we will explore in-depth shortly.

Recall that LCCs are particularly sensitive to external shocks due to their lack of diversified revenue streams and reliance on discretionary spending by consumers who were already price-sensitive to begin with. The effects of COVID and foreign exchange variations, along with the lingering impact of the grounding of the Boeing 737 MAX 8 aircraft, led to a significant deterioration in the company’s performance in 2020, marking the onset of a period of financial distress. 

COVID-19

Following the grounding of the Boeing 737 MAX 8, LCCs across the world faced a sudden drop in demand due to the COVID-19 pandemic. GOL was no exception, with the number of departures more than halving, falling from 260k in 2019 to 120k in 2020. Decreased demand led to a 55% decrease in passenger revenue, which fell from $2.4bn in 2019 to $1bn in 2020. At the same time, GOL’s operating expenses did not decrease proportionally; total opex fell less than 40% from 2019 to 2020. Together, these factors caused operating margin to swing from 15% in 2019 to (15%) in 2020 [10]. 

Unlike US airlines, which quickly received $60bn in monetary relief from the American government to support operations during the pandemic [18], the Brazilian government did little to provide direct financial assistance to its domestic carriers [1]. Instead, airlines like GOL were forced to absorb the full brunt of pandemic-related costs, relying solely on internal cash flows that, as we’ll see shortly, were also becoming less valuable. 

FX Volatility and the Weakening Real 

In addition to the pandemic’s widespread impact on demand, GOL also faced a sharp depreciation of the Brazilian Real (BRL) against the US dollar (USD). While almost all passenger revenue is collected in BRL, nearly 40% of GOL’s operating costs were denominated in, or linked to, the USD in 2020. Additionally, GOL held various financial investments that were also denominated or connected to the USD through hedging strategies. Because much of GOL’s costs were USD-denominated while the company earned revenue in BRL, this mismatch created foreign exchange (FX) risk: when the BRL weakened, GOL’s USD obligations became more expensive in local currency. 

To manage this FX risk, GOL employed a suite of derivatives (primarily foreign currency forwards and swaps) designed to hedge future dollar-denominated cash flows. As a quick reminder, forward contracts lock in exchange rates for future USD purchases, and swaps exchange BRL cash flows for fixed USD obligations over time. Essentially, GOL was employing a risk management strategy to lock in future costs or revenues by protecting against fluctuations in cash flows caused by changes in exchange rates [10]. 

GOL only partially hedged its exposure, leaving a significant portion of its USD obligations unprotected. However, the global rush for liquidity following the COVID pandemic caused the USD to surge against most emerging market currencies as investors and companies raced to secure US Dollars for safety and to meet dollar-denominated obligations. As a result, the BRL depreciated from an average exchange rate of 4.03 BRL / USD in 2019 to 5.15 BRL / USD in 2020, reflecting a depreciation of nearly 30%. 

When the BRL instead weakened sharply, GOL faced substantial losses on both unhedged positions and ineffective or derecognized hedges. For example, one of GOL’s USD-denominated costs was fuel prices. In 2019, the company had only hedged 60% of its expected 2020 fuel needs, meaning the remaining 40% of GOL’s jet fuel exposure was left vulnerable to currency fluctuations. As a result of underhedged positions like this one, GOL recorded nearly $600mm in expenses relating to the effects of exchange rate variation in 2020 [10]. 

At the same time, Figure 5 shows that most of GOL’s debt was denominated in USD. This means that the depreciation of the BRL caused the revenues that the company did generate to be worth less USD, the currency GOL needed to use to repay its debt. Weak demand from the pandemic, scant aid provided by the Brazilian government, and adverse exchange rate impacts caused the company’s free cash flow to drop from $270mm in 2019 to $20mm in 2020. It may seem surprising that GOL’s free cash flow was positive in 2020. However, the company received credit from its suppliers, resulting in $110mm of working capital benefit. A combination of stretching vendor payments, halving capex from $180mm to $90mm, and $40mm of working capital benefits from GOL’s mileage program allowed them to stay afloat. During the year, GOL also raised $200mm in new debt and engaged in a series of refinancings, ending 2020 with $3.2bn of debt and $120mm in cash [10].

The setbacks GOL experienced in 2019 and 2020 continued into 2021. Even though GOL was able to secure agreements with labor unions and suppliers to temporarily decrease salaries and defer some cash payments, these measures were not enough to help the company return to pre-pandemic levels of operation. Despite recovering to its pre-pandemic load factor of 80% by the end of 2021, GOL’s overall passenger demand for the year ($1.2bn in passenger sales) still remained well below pre-COVID levels ($2.4bn); revenues from Smile and cargo were also lower in 2021 than in 2020. At the same time, the BRL continued to depreciate against the USD, reaching a rate of 5.58 BRL / USD by the end of 2021. 95% of GOL’s debt was USD-denominated, so the weakening BRL continued to put heavy pressure on the company’s debt burden in local currency terms. 

In addition to adverse changes in macroeconomic conditions, GOL’s operating costs also increased by over 50% from $1.3bn in 2020 to $2bn in 2021. This was caused by an increase in nearly every category of the company’s operating costs, but we will focus on three major factors. First, fuel costs (around 25% of total operating costs for 2021) increased 30% from $360mm to $480mm due to the average per-liter price of fuel increasing from 46c to 64c. Second, GOL’s accelerated fleet transformation plan of adopting more 737 MAX aircraft and returning old NG aircraft significantly drove up maintenance expenses (around 20% of 2021 operating costs) from $60mm to $400mm. Third, GOL’s other income fell from $95mm to ($130mm), partially due to the effects of the grounding of the 737 MAX two years before and the depreciation of the BRL against the USD. GOL’s free cash flow fell to ($15mm) [11]. 

Out-of-Court Initiatives 

Following the company’s continued struggles in 2021, GOL spent two years trying to resize its capital stack out of court through two main events: the issuance of new senior secured notes and a two-part transaction with a strategic platform. Below is the company’s capital structure at the end of 2021:

Issuance of Glide Notes

Recall that, as part of negotiations with lessors during the pandemic, GOL was able to temporarily defer some lease payments. However, the company’s backlog of these obligations began piling up as GOL continued to defer payments throughout 2021 and 2022. By the end of 2022, GOL’s total lease liabilities stood at around $2bn, with nearly $350mm due within 12 months and only $30mm in cash. At this point, GOL’s cash balance had decreased by over 50% year-over-year since 2019 and the company ended 2022 with $4.2bn in total debt (including leases) [12]. 

It was clear that the company needed to pursue a solution to address this challenge, as GOL didn’t even have enough cash to cover the near-term portion of its lease liabilities. GOL ultimately reached an agreement with a group of lessors to restructure a portion of its deferred obligations. In December 2022, the company issued $220mm of new secured amortizing notes in exchange for a full release of a portion of overdue lease liabilities. These newly issued “Glide Notes” were issued at 100% face value, meaning lessors accepted the notes as a replacement for the unpaid lease amounts. In doing so, GOL effectively converted its overdue obligations into formal long-term debt and temporarily increased liquidity by deferring cash outflows and spreading repayment obligations over a three-year period [1]. 

Debt Exchange and Capital Raise with Abra 

Following the issuance of the Glide Notes, GOL also pursued a strategic platform with Abra, a newly established airline holding entity that also owns Avianca (Colombia’s national airline) and holds a majority economic interest in GOL. This was not a merger but rather a partnership that brought together the two complementary airlines; GOL and Avianca shared similar market presence and operating models, and through Abra, were able to integrate route networks. The Abra transaction aimed to increase GOL’s presence and opportunities within the Latin American aviation sector [1]. 

As part of this broader partnership, GOL leveraged Abra to execute a debt exchange and raise new capital in March 2023. Abra issued new senior secured and senior secured exchangeable notes to international investors, most of whom were a group of existing GOL creditors. In return, these investors exchanged around $1.1bn of existing debt (consisting of 2024 Exchangeable Notes, 2025 Senior Notes, 2026 Senior Secured Notes, and Perpetual Notes) for $1.2bn of new 2028 Senior Secured Notes issued by GOL’s affiliate GFL (“Gol Finance” in Figure 2) at an average discount of 71 cents on the dollar. This transaction allowed GOL to capture a discount on the exchanged debt, increasing liquidity by $400mm ($1.2bn of new proceeds and retired the old debt for $800mm, $1.1bn x 71c) while only adding around $100mm in net new debt. [14]. 

Bankruptcy in Brazil vs. in the US 

While the Abra transaction generated some liquidity for the company, it was still not enough to pull the company out of distress. A few months after the Abra transaction closed, GOL sought $600mm in new capital through an out-of-court restructuring process [1]. By the end of 2023, GOL had around $3.8bn in total debt and less than $60mm in cash [13]. The company’s initial ask for $600m was later increased to $950mm in December 2023 due to worsening liquidity and a reduced fleet size, and GOL also reached out to all 27 lessors in attempts to modify its lease obligations. Ultimately, an out-of-court solution could not be agreed upon, leaving GOL with a heavily overleveraged capital structure [1]. 

Before we dive into the Chapter 11 filing of GOL, it’s important to first understand what makes the US bankruptcy process a preferred method of relief compared to the Brazilian system. For the past few decades, Brazil operated under a 1945 bankruptcy code focused on liquidation, offering debtors two options. First, a Concordata was a court-supervised reorganization plan that treated all creditors equally without negotiation; creditors could not vote for different plans, even if they were in different situations. Second, Falencia was effectively a full liquidation. This old system rarely saved companies, and Concordatas often also resulted in liquidation, job losses, and poor creditor recoveries [20]. In 2005, Brazil replaced this framework with Law 11.101, modeled after U.S. Chapter 11. The new law gave distressed companies more flexibility through three paths: judicial reorganization (court-supervised process with creditor being grouped by their place in the cap stack), extrajudicial reorganization (pre-negotiated out-of-court plans), and liquidation (similar to Chapter 7, with a court-appointed trustee selling assets) [21]. 

In contrast, the US bankruptcy process allows for more negotiations between debtors and creditors and is preferred by many international companies entering corporate bankruptcy. The American system allows for a transparent, court-supervised process that enables the debtor to access tools such as DIP financing, contract rejection, lien-free asset sales, and the protection of automatic stay, all of which increase the chances of rehabilitation for a distressed company while still ensuring adequate creditor protection. 

The key difference between US and Brazilian bankruptcy law is the absence of an absolute priority rule in Brazil. In the US, recoveries follow a strict order: equity holders recover only after all creditor claims are satisfied, and creditor recoveries are determined by their position in the capital structure. Brazil, however, allows equity to retain value even when senior creditors are not fully repaid. The Oi S.A. restructuring in 2016, the largest bankruptcy in Latin American history, is the most prominent example of this dynamic, where shareholders retained ownership in the company after the restructuring, even though creditor claims had not been fully repaid. While US bankruptcy law is impartial toward debtors or creditors, Brazilian bankruptcy law is known to be more debtor-friendly: only debtors can propose plans, and creditors cannot submit competing ones [22]. 

Another major distinction is in the use of cramdowns. In the US, a plan can be confirmed over dissent if one impaired class accepts it and the plan is fair and equitable. Brazil also permits cramdowns, but only under stricter conditions: approval by 3 of 4 creditor classes (or 1 of 2, if there are 2 classes or fewer), at least one-third support within any dissenting class, and a finding that the plan is feasible and not disproportionately harmful. These additional hurdles limit judicial discretion and make cramdowns harder to execute in Brazil due to stricter guidelines, giving more leverage to dissenting creditors that otherwise would not have power in the US system [22]. 

These advantages are relevant since foreign companies can readily access U.S. bankruptcy protection. Section 109 of the Bankruptcy Code defines an eligible debtor as “a person that resides or has a domicile, a place of business or property in the U.S., or a municipality,” yet it sets no minimum property or activity threshold. Consequently, even foreign entities with only limited U.S. assets or operations may qualify for Chapter 11 relief [24].

Chapter 11 Filing

The company ended 2023 with $60mm in cash and filed for a Chapter 11 in the US in January 2024 [1] [13]. At the time of filing, GOL had over $4.5bn in total liabilities. Below is GOL’s prepetition cap stack [1]:

The company was able to secure a $950mm DIP facility from Abra. Abra was essentially the company’s only creditor, given that they held almost $3bn in prepetition debt and obligations. Abra also agreed to convert its nearly $3bn of claims (Abra held all of the 2028 Senior Secured Notes and 2028 Senior Secured Exchangeable Notes, as well as other positions spread across the company’s cap stack) into at least $950mm of reorg equity and $850mm take-back debt, of which $250mm could be exchanged into additional equity following certain requirements. As a reminder, take-back debt is newly issued debt given to existing creditors in exchange for extinguishing their prior claims [1]. Abra’s willingness to provide the DIP ultimately resulted in roughly one-third of its prepetition position being equitized, but it positioned them for a potentially strong recovery.

As part of the Chapter 11 process, GOL also underwent changes in corporate governance; the reorganized company will operate under a new parent entity with a Brazilian intermediate holding company. This new corporate structure was implemented for capital gains exemptions, potential future dividend payments, and tax efficiency. In terms of leases, GOL was able to reduce its total liabilities for aircraft and engine leases by $700mm from around $1.9bn to around $1.2bn and secure $350mm in new capital from lessors for engine maintenance and deliveries via new sale-leaseback financing. Among these new deliveries were additional Boeing 737 MAX aircraft and spare engines, which boosted fleet capacity [1]. 

GOL successfully emerged from bankruptcy in June 2025 after extinguishing nearly $2bn of prepetition debt and $850mm in other obligations; the company entered with over $4.5bn in total debt and debt-like obligations and exited with just under $2bn. Abra’s $950mm DIP was repaid in full, and Abra received around 65% recovery on their $2.8bn of prepetition debt through $850mm take-back debt and $950mm of reorg equity. The fact that Abra received the highest recovery is expected as they were the most senior (and essentially sole) creditor in GOL’s capital structure. The 2026 Senior Secured Notes recovered around 40%, and unsecured creditors recovered from a pool of around $300mm, with around 6% of reorg equity. As a reminder, Abra received most of the reorg equity ($950mm) [1] [23]. 

After emerging from Chapter 11, GOL plans to continue growing its fleet and exploring a possible merger with Azul, another one of Brazil’s largest LCCs and a competitor to GOL. As part of the company’s broader reorg strategy, Abra signed a non-binding memorandum of understanding with Azul in January 2025. Discussions of the merger were driven by the fact that the two airlines have 90% complementary flying routes. However, Azul filed for bankruptcy in May 2025, which may delay or complicate merger discussions as both airlines focus on navigating their respective restructuring processes [25]. 

GOL’s restructuring demonstrates the challenges faced by LCCs in general, and especially those in emerging markets with USD-denominated debt and limited access to government aid. Azul’s filing shortly after GOL’s shows that the pressures faced by, and that ultimately pushed GOL into Chapter 11, are not entirely unique to the company itself. Instead, GOL’s hurdles reflect broader, structural vulnerabilities in the low-cost airline model and its reliance on high utilization, while facing heightened exposure to macroeconomic shocks. 

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