Brazil's Azul shifts focus to 'responsible growth,' rules out M&A after Chapter 11

By Gabriel Araujo

SAO PAULO, Feb 23 (Reuters) - Brazilian airline Azul AZUL53.SA has emerged from its Chapter 11 restructuring, shielded from any new potential headwinds, and will now focus on "responsible growth," CEO John Rodgerson told Reuters, while ruling out any merger or acquisition plans.

Azul announced on Friday it had exited U.S. bankruptcy proceedings after about nine months, adding that it had achieved its goals of strengthening its capital structure, increasing liquidity and reducing indebtedness during the process.

"I'm very happy about managing this company now that it is de-leveraged. The best thing is to run a company that did everything it needed to clean up its balance sheet," Rodgerson said.

Azul filed for Chapter 11 in May 2025 to restructure its debt, part of a wave of Latin American airlines seeking bankruptcy protection after the COVID-19 pandemic - including rivals Gol and LATAM Airlines LTM.SN.

The carrier cut debt and lease obligations by about $2.5 billion during the process, which also included raising nearly $1.4 billion through debt and $950 million in equity investments.

"We know that the company with the lowest leverage will win the race. It's as simple as that. We are in a country with many uncertainties, so what we've done now is shield the company to withstand anything," Rodgerson said.

Azul emerged from bankruptcy proceedings with a net leverage ratio of less than 2.5, down from 3.3 during the pandemic, the CEO noted.

UNITED, AMERICAN BACK RESTRUCTURING

As part of Azul's restructuring, American Airlines AAL.O and United Airlines UAL.O have both agreed to invest in the Brazilian carrier.

Azul received $100 million from United and executed a commitment with American for an additional $100 million equity investment, subject to antitrust approval.

"They could have invested in anyone else, but they decided to join us," Rodgerson said. "They want the connectivity we have inside Brazil."

The restructuring also put an end to any merger ideas, he added.

The carrier in 2025 held talks with Abra Group on a potential merger with Gol, which Abra controls, but they ended in September as Azul turned its focus to the Chapter 11 process. It also had a failed attempt to combine with LATAM in 2021.

"Forget about it," Rodgerson said when asked about a potential M&A.

(Reporting by Gabriel Araujo; Editing by Anil D'Silva)

((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))