Summary
- GOL Linhas Aéreas aiming to exit bankruptcy soon with $1 billion capital injections & 5-year recovery plan.
- By 2026, GOL plans to return to pre-pandemic capacity, expand network, and modernize fleet.
- Codeshare with Azul Linhas Aéreas sparks merger rumors, potential shake-up in Brazilian airline industry.
GOL Linhas Aéreas of Brazil is working on its exit from the Chapter 11 bankruptcy process and earlier today announced a five-year recovery plan.
Five-year plan
GOL Linhas Aéreas is a low-cost carrier in Brazil that operates a fleet of Boeing 737 aircraft, one of several airlines worldwide to do so. It is the second Brazilian airline to enter the Chapter 11 Bankruptcy process in recent years and hopes to exit soon. According to a report today from Reuters, the airline will receive more than $1 billion in capital injections.
Photo: Lukas Souza | Simple Flying
Earlier today, GOL revealed its 5-Year Financial Plan to restructure and put the airline back on its feet. The plan outlines that by 2026, GOL hopes to return to its pre-pandemic capacity. Additionally, the airline aims to expand its network domestically and internationally, something that already happened last week through the announcement of a codeshare with Azul Linhas Aéreas on some routes.
By 2029, GOL expects to have 169 planes in its fleet, a net increase of 31 aircraft based on the current fleet. In the coming years, many aircraft will be retired, and GOL will modernize its fleet. The airline’s order book currently has 88 planes, 63 Boeing 737 MAX 8s and 25 Boeing 737 MAX 10s (which have not been certified).
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A significant portion of GOL’s five-year plan is to inject $1.5 billion in capital by issuing new shares and refinancing nearly $2 billion of its debt. After the new plan was announced, shares in Brazil dropped up to 3.5%, and GOL said there was a significant chance its shares would hit “minimal value upon emergence” from bankruptcy.
“We are pleased to reach another important milestone in our financial restructuring process. Since the beginning of this process, GOL has continued to operate without interruptions, demonstrating solidity in executing our commercial strategy and cost management. We have successfully renegotiated agreements with our lessors for most of our aircraft and are investing in our engines and expanding our operational fleet.” – Celso Ferrer, Chief Executive Officer, GOL Linhas Aéreas
A potential merger?
Last week, GOL and Azul Linhas Aéreas took a step that fed rumors of a merger. The airlines announced a codeshare agreement to expand their domestic networks. Their respective codes will only be placed on routes operated by one of the airlines. According to Azul’s president, Abhi Shah, this creates more than 2,700 one-stop connection opportunities.
Photo: Lukas Souza | Simple Flying
Brazil only has three major players in the domestic market: GOL, Azul, and LATAM Brasil (formerly TAM). Between GOL and Azul, the two have 52% of seats available in May. Two big airlines joining forces in Brazil is not standard and feeds the rumors that Azul is trying to purchase GOL and merge the two airlines. Though neither airline has openly discussed the merger, Azul’s CEO, John Rodgerson, has been straightforward about the airline’s interest in consolidating the Brazilian market. When LATAM went through its Chapter 11 process, there were plenty of rumors that it would merge with Azul.
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