Struggling airline quietly explores Chapter 11 bankruptcy

Winning awards and having a good on-time arrival track record does not guarantee success.

May 16, 2025 - 16:54

Struggling airline quietly explores Chapter 11 bankruptcy

For about 16 months, few people had any reason to fly anywhere, and global travel shrank to nearly zero. In many cases, it literally wasn't legal to fly between certain countries and even when you could, few people wanted to.

Planes felt risky before Covid vaccines became common. It simply wasn't comfortable sitting next to someone who may or not be infected when masks were required, but sort of optional when eating or drinking.

This created a huge problem for airlines. Planes cost money in upkeep and parking, even when not being flown.

If you lay off staff to save money, you don't have the people needed to operate when the world recovered. It was a period where cash was being spent but not coming in.

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Those days led to massive problems for many airlines. Spirit filed Chapter 11 bankruptcy, and a number of global carriers either filed bankruptcies of their own or simply went out of business.

Now, another key airline is at least considering a Chapter 11 bankruptcy filing.

Some airlines have struggled to recover.
Image source: Getty Images

Huge airline teeters on the edge

Airlines can't cut corners like other businesses. A retail store can skimp on merchandise and hire less labor. An airline cannot cut back without putting lives in danger.

That makes it very hard to dig out of a financial hole. Azul Airlines has fallen into a hole and appears to need cooperation from vendors, airports, and maybe its staff to get out from under it.

The airline has reportedly been considering a Chapter 11 bankruptcy filing.

"Azul, the largest airline in Brazil in terms of number of departures and cities served, offers 1,000 daily flights to more than 160 destinations. With an operational fleet of over 180 aircraft and over 16,000 crew members, the company has a network of 300 direct routes," it shared on its website.

Retail closings:

The airline has not fully decided yet.

"Options including a potential Chapter 11 bankruptcy filing as the struggling Brazilian airline works to secure additional funding and reduce its debt levels," Bloomberg Law reported. "The company has been prioritizing its customers and partners, and will continue operating regardless of the outcome of its balance sheet discussions."

Market conditions have hurt Azul

The airline has seen its problems compounded as the depreciation of its native currency, the Brazilian real, has inflated Azul’s expenses, including dollar-denominated lease payments and fuel costs tied to American money.

And while Azul is having financial troubles, it has been a well-regarded airline.

"Azul was elected by Cirium (a leading aviation data analytics company) as the 2nd most punctual airline in the world in 2023. In 2020, Azul was awarded the best airline in the world by TripAdvisor, marking the first time that a Brazilian airline won first place in the Traveler's Choice Awards," the airline shared on its website.

The airline also has an affiliate cargo company and a popular tour operator.

"Azul Viagens is Azul's tour operator. With a strong presence in Brazil, it offers a wide variety of tourist itineraries and its packages benefit from the extensive reach of Azul's air network: more than 160 domestic and international destinations. Azul Viagens currently has more than 100 stores throughout Brazil and abroad," it posted on its website.

All of its global affiliates, which operate under a variety of names, follow "Azul's premises of low cost and high quality of services; the operator offers very attractive prices and operates in the main tourist destinations in Brazil and the world," it added.

It remains unclear whether a bankruptcy filing would impact these related businesses.