GOL Linhas Aéreas Inteligentes (G3, São Paulo Congonhas) faces significant near-term liabilities coming due in the next 12 months worth USD2.7 billion, the airline confirmed in a presentation during the first-day hearing of its Chapter 11 process in the United States Bankruptcy Court of the Southern District of New York.
These are the Brazilian carrier’s main obligations coming due in the next 12 months:
- Air Traffic Liabilities worth USD647 million;
- Suppliers worth USD413 million;
- GOL’s loyalty program, Smiles, obligations worth USD365 million;
- Lease obligations worth USD359 million;
- Funded debt worth USD292 million;
- Airport taxes and fees worth USD210 million;
- Provisions worth USD154 million;
- Other obligations worth USD143 million and;
- Labour obligations worth USD134 million.
GOL filed for a Chapter 11 bankruptcy process on January 25, 2024, looking to restructure its near-term financial obligations and strengthen its capital structure.
It entered the reorganisation process with USD950 million in new debtor-in-possession financing (DIP Financing) from members of the Ad Hoc Group of Abra bondholders and other Abra Group bondholders. Of this amount, the Brazilian airline is looking to secure USD350 million in financing immediately, followed by USD600 million for the duration of the proceedings.
The airline stated that the DIP Financing “is the best source of [...] financing currently available to the Debtors. Given their current financial condition, financing arrangements, capital structure, and the circumstances of these Chapter 11 Cases, the Debtors have been and continue to be unable to obtain financing from sources on terms more favorable than the DIP Financing.”
The Brazilian carrier is the fourth Latin American airline to file for Chapter 11 bankruptcy since 2020. That year, at the height of the Covid-19 pandemic, avianca airlines, LATAM Airlines Group, and Aeroméxico all went into Chapter 11 in a matter of weeks.
The Abra Group, owner of GOL and avianca airlines, said it fully supports GOL’s decision, “understanding that this process represents an opportunity to strengthen the company and make it a more successful and sustainable business going forward.”
