GOL Linhas Aéreas Inteligentes (G3, São Paulo Congonhas) has announced its new Chapter 11 five-year financial plan, which includes exit financing process of over USD3.5 billion, the issuance of new shares, and the uninterrupted delivery of new B737 MAX aircraft during the restructuring process.

The airline’s financing will involve the offering of new shares in a capital raise of around USD1.5 billion. Additionally, GOL will refinance an estimated USD2 billion worth of secured debt obligations over a long-term basis, it outlined in a securities filing.

It intends to conduct “a competitive process” in which it will evaluate exit financing proposals “and any viable, competitive alternative transactions, including opportunities presented by potential sources of equity and debt capital.” This process will start in early June and is expected to extend at least until late in the third quarter of 2024 and possibly into the fourth quarter.

Additionally, the company projects increasing the size of its fleet to 169 aircraft by 2029, up from an estimated 142 at the end of this year. The ch-aviation fleets module shows that GOL currently operates 138 aircraft - fourteen B737-700s, forty-six B737-8s, seventy-two B737-800s, and six B737-800(BCF)s. GOL has eighty-eight aircraft on order, including sixty-three B737-8s and twenty-five B737-10s.

The GOL five-year plan “addresses many of the pre-filing challenges which hindered GOL’s ability to return its operations to pre-pandemic levels,” the company said in its business plan presentation. “Notably engine capex financing from lessors supports rebuilding GOL’s operational fleet, thereby increasing GOL’s leading presence in key domestic markets.”

The US Bankruptcy Court approved new agreements between the airline and lessors for 113 aircraft and 48 spare engines, including early redeliveries and significant engine maintenance support.

“We have successfully renegotiated agreements for a substantial majority of our aircraft with our lessors and are following our strategic plan to invest in our engines and increase the size of the operating fleet and capacity while maintaining high productivity and operational efficiency,” said Celso Ferrer, the carrier’s chief executive officer.

The company is forecasting an increase in total revenues from BRL18.7 billion reais (USD3.6 billion) expected in 2024 (and a 23% EBITDA margin) to BRL30.3 billion (USD5.8 billion) in 2029 (and a 34% EBITDA margin).

Azul, GOL announce codeshare

In related news, Azul Linhas Aéreas Brasileiras (AD, São Paulo Viracopos) and GOL Linhas Aéreas have announced a domestic codeshare agreement. “With Azul's highly connected network serving most cities in Brazil, and GOL's strong presence in the main Brazilian markets, our significantly non-overlap service offerings will bring our customers the broadest range of travel options in the market,” said Abhi Shah, president of Azul.

Both companies had recently been linked in merger talks, as GOL evaluated "capitalisation alternatives".

In 2020, Azul Linhas Aéreas partnered with LATAM Airlines Brasil (JJ, São Paulo Congonhas), announcing a codeshare agreement covering 50 non-overlapping domestic routes in Brazil. At the time, LATAM Airlines Group was also in a Chapter 11 bankruptcy process, Azul had proposed acquiring the company’s Brazilian subsidiary with no success, and GOL filed a complaint alleging unfair market concentration resulting from the partnership.