Avianca Brasil Strikes Deal with Azul, Holds on to Planes For Now

Brazilian airline Azul SA on Monday said it will seek to buy certain assets held by struggling rival Avianca Brasil for $105 million, on the same day a local court allowed the carrier to hold onto its planes despite mounting missed payments, Reuters reported. Under the proposed terms, Azul would buy airport slots and assume some aircraft leases from Avianca Brasil but inherit none of its debts. Azul will also extend an immediate financial lifeline to Avianca Brasil, disbursing as much as $40 million to pay for the carrier’s operating expenses from now until April, two sources familiar with the matter said. Avianca Brasil has continued to miss payments on its airplane leases, and has fallen behind on its payroll, the sources said. At a higher court hearing on Monday, a panel of Brazilian judges postponed ruling for an additional two weeks on an appeal from aircraft lessors, allowing Avianca Brasil to keep operating its planes despite missed payments. Read more

Location