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Yahoo
20-05-2025
- Business
- Yahoo
GOL Receives U.S. Court Approval for Plan of Reorganization
Company to Emerge from United States Chapter 11 Process with Strengthened Competitive Position, Balance Sheet and Operational Performance New US$ 1.9 Billion Exit Financing Facility Provides Ample Cash to Support Strategic Execution Following Emergence Expects to Complete Chapter 11 Process in June 2025 SíO PAULO, May 20, 2025 /PRNewswire/ -- GOL Linhas Aéreas Inteligentes S.A. (B3: GOLL4) ("Company" or "GOL"), one of the leading airlines in Brazil, today announced that the U.S. Bankruptcy Court has decided to confirm GOL's Chapter 11 Plan of Reorganization (the "Plan"). With confirmation secured, GOL remains on track to emerge from its restructuring process in early June 2025. Throughout the course of its United States Chapter 11 process, GOL has made significant strides forward in improving its competitive position, financial foundation and operational performance. Key milestones of the process included: Securing US$ 1 billion in debtor-in-possession ("DIP") financing, which bolstered liquidity and allowed GOL to re-invest in its aircraft fleet; Negotiating concession packages totaling US$ 1.1 billion from lessors covering all aircraft in GOL's fleet, including financial support to clear its maintenance backlog while also providing permanent savings on rent and end of lease obligations; Obtaining support from Brazilian banks, including restructuring approximately US$ 150 million of local debentures and access to approximately US$ 340 million of receivables factoring, a critical working capital tool for Brazilian companies; Identifying and beginning implementation of a US$ 181 million annual profit improvement program to solidify GOL as one of the most cost competitive airlines in South America; Negotiating a Plan Support Agreement with Abra Group Limited ("Abra") and the Unsecured Creditors Committee to deleverage GOL through a reduction of up to approximately US$ 1.6 billion of prepetition funded debt and up to US$ 0.8 billion of other obligations; Finalizing an agreement with the Brazilian governmental authorities to reduce unpaid government taxes, contingencies, and other liabilities by approximately US$ 750 million and to generate approximately US$ 184 million of liquidity through 2029; Reaching an agreement with The Boeing Company on modifications of the purchase contracts to provide US$ 262 million of concessions and incremental liquidity through 2029 and over US$ 0.7 billion of total relief; and Securing US$ 1.9 billion in exit financing which provides ample liquidity to repay the Company's DIP maturity in full upon emergence, while also providing additional liquidity to support GOL's execution of its business plan. The Company is now positioned to emerge from the process with: Meaningfully strengthened balance sheet: Upon emergence, GOL will move forward with a strong liquidity position of approximately US$ 900M and significantly reduced leverage of 5.4x at exit, and projected net leverage of 2.9x by year-end 2027. Overhauled all-Boeing 737 fleet on track to return to pre-pandemic domestic capacity: In 2024, GOL overhauled over 50 engines and remains on track to have all aircraft in the air by the first quarter of 2026. The Company also continues to strengthen its fleet, with expected delivery of five additional Boeing 737 MAX in 2025. Positive business momentum built on recent outperformance: As a result of the fleet overhaul, in the fourth quarter of 2024 and first quarter of 2025, GOL's operational and financial performance has exceeded the expectations previously outlined in its 5-Year Plan, with strong and growing demand translating to 17.4% year-over-year recurring EBITDA growth and 19.4% year-over-year net revenue growth in the first quarter. GOL is entering its next phase with a strong market position and best-in-class customer offering as it continues to rebuild its network in key markets, serving 30 million passengers across 65 domestic destinations and 16 international destinations in 2024. Driven by its mission of being "First for All," GOL offers passengers the largest number of seats, more space between seats and the greatest onboard experience including internet, movies and live TV. Through its Smiles loyalty program, which is the largest loyalty program in Brazil and the second largest program in Latin America, GOL offers customers access to over 50 partner airlines, three co-branded credit card options and over 550,000 product options to redeem on non-travel partners. As the Company continues to execute its proven network expansion strategy, GOL is well-positioned to deploy its rebuilt capacity both domestically and internationally by leveraging its significant presence in key Brazilian hubs. In particular, its strategic global partnerships allow for adding new service profitably to new or underserved domestic and international routes. Next StepsHaving secured confirmation of its Plan, GOL is now focused on completing the final steps necessary to complete its exit from the Chapter 11 process, including its shareholders' meeting to approve the capital increase contemplated under the Plan, which will take place on May 30, 2025. Following implementation of the Plan, Abra will remain GOL's largest indirect shareholder. GOL reiterates that, under the terms of the Plan, it will significantly reduce its indebtedness by converting into equity or extinguishing up to approximately US$ 1.6 billion of its pre-Chapter 11 funded debt and up to approximately US$ 850 million of other obligations. As such, considering that the conversion will be carried out based on the economic value of GOL's shares prior to the conversion, in accordance with applicable law, a substantial dilution of GOL's currently outstanding shares is expected (subject to shareholders' preemptive rights as provided under Brazilian law). AdvisorsIn the context of its restructuring efforts, GOL is working with Milbank LLP as legal advisor, Seabury Securities, LLC as investment banker, lead placement agent for the US$ 1.9 billion exit notes, financial advisor and sole restructuring advisor, BNP Paribas Securities Corp. as bookrunner (B&D) and placement agent for the exit notes, and AlixPartners, LLP as financial advisor. In addition, Lefosse Advogados acts as GOL's Brazilian legal advisor. Special note regarding forward-looking statementsThis material fact contains certain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. The words "will," "maintain", "plans" and "intends" and similar expressions, as they relate to GOL, are intended to identify forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. Undue reliance should not be placed on such statements. Forward-looking statements speak only for the date they are made. About GOL Linhas Aéreas Inteligentes is one of Brazil's leading airlines and is part of the Abra Group. Since it was founded in 2001, the company has had the lowest unit cost in Latin America, democratizing air transport with the aim of "Being the First for All". GOL has alliances with American Airlines and Air France-KLM and offers customers more than 60 codeshare and interline agreements, making connections to any place served by these partnerships more convenient and easier. GOL also has the Smiles loyalty program and GOLLOG for cargo transportation, which serves various regions in Brazil and abroad. The company has 14,5 thousand highly qualified professionals focused on safety, GOL's number one value, and operates a standardized fleet of 139 Boeing 737 aircraft. The Company's shares are traded on B3 (GOLL4). For further information, visit GOL Media Contacts U.S. Joele Frank, Wilkinson Brimmer Katcher: Leigh Parrish / Jed Repko lparrish@ / jrepko@ South America In Press Porter Novelli gol@ GOL Investor Relations ir@ View original content to download multimedia: SOURCE GOL Linhas Aéreas Inteligentes S.A. Sign in to access your portfolio
Yahoo
20-05-2025
- Business
- Yahoo
GOL Receives U.S. Court Approval for Plan of Reorganization
Company to Emerge from United States Chapter 11 Process with Strengthened Competitive Position, Balance Sheet and Operational Performance New US$ 1.9 Billion Exit Financing Facility Provides Ample Cash to Support Strategic Execution Following Emergence Expects to Complete Chapter 11 Process in June 2025 SíO PAULO, May 20, 2025 /PRNewswire/ -- GOL Linhas Aéreas Inteligentes S.A. (B3: GOLL4) ("Company" or "GOL"), one of the leading airlines in Brazil, today announced that the U.S. Bankruptcy Court has decided to confirm GOL's Chapter 11 Plan of Reorganization (the "Plan"). With confirmation secured, GOL remains on track to emerge from its restructuring process in early June 2025. Throughout the course of its United States Chapter 11 process, GOL has made significant strides forward in improving its competitive position, financial foundation and operational performance. Key milestones of the process included: Securing US$ 1 billion in debtor-in-possession ("DIP") financing, which bolstered liquidity and allowed GOL to re-invest in its aircraft fleet; Negotiating concession packages totaling US$ 1.1 billion from lessors covering all aircraft in GOL's fleet, including financial support to clear its maintenance backlog while also providing permanent savings on rent and end of lease obligations; Obtaining support from Brazilian banks, including restructuring approximately US$ 150 million of local debentures and access to approximately US$ 340 million of receivables factoring, a critical working capital tool for Brazilian companies; Identifying and beginning implementation of a US$ 181 million annual profit improvement program to solidify GOL as one of the most cost competitive airlines in South America; Negotiating a Plan Support Agreement with Abra Group Limited ("Abra") and the Unsecured Creditors Committee to deleverage GOL through a reduction of up to approximately US$ 1.6 billion of prepetition funded debt and up to US$ 0.8 billion of other obligations; Finalizing an agreement with the Brazilian governmental authorities to reduce unpaid government taxes, contingencies, and other liabilities by approximately US$ 750 million and to generate approximately US$ 184 million of liquidity through 2029; Reaching an agreement with The Boeing Company on modifications of the purchase contracts to provide US$ 262 million of concessions and incremental liquidity through 2029 and over US$ 0.7 billion of total relief; and Securing US$ 1.9 billion in exit financing which provides ample liquidity to repay the Company's DIP maturity in full upon emergence, while also providing additional liquidity to support GOL's execution of its business plan. The Company is now positioned to emerge from the process with: Meaningfully strengthened balance sheet: Upon emergence, GOL will move forward with a strong liquidity position of approximately US$ 900M and significantly reduced leverage of 5.4x at exit, and projected net leverage of 2.9x by year-end 2027. Overhauled all-Boeing 737 fleet on track to return to pre-pandemic domestic capacity: In 2024, GOL overhauled over 50 engines and remains on track to have all aircraft in the air by the first quarter of 2026. The Company also continues to strengthen its fleet, with expected delivery of five additional Boeing 737 MAX in 2025. Positive business momentum built on recent outperformance: As a result of the fleet overhaul, in the fourth quarter of 2024 and first quarter of 2025, GOL's operational and financial performance has exceeded the expectations previously outlined in its 5-Year Plan, with strong and growing demand translating to 17.4% year-over-year recurring EBITDA growth and 19.4% year-over-year net revenue growth in the first quarter. GOL is entering its next phase with a strong market position and best-in-class customer offering as it continues to rebuild its network in key markets, serving 30 million passengers across 65 domestic destinations and 16 international destinations in 2024. Driven by its mission of being "First for All," GOL offers passengers the largest number of seats, more space between seats and the greatest onboard experience including internet, movies and live TV. Through its Smiles loyalty program, which is the largest loyalty program in Brazil and the second largest program in Latin America, GOL offers customers access to over 50 partner airlines, three co-branded credit card options and over 550,000 product options to redeem on non-travel partners. As the Company continues to execute its proven network expansion strategy, GOL is well-positioned to deploy its rebuilt capacity both domestically and internationally by leveraging its significant presence in key Brazilian hubs. In particular, its strategic global partnerships allow for adding new service profitably to new or underserved domestic and international routes. Next StepsHaving secured confirmation of its Plan, GOL is now focused on completing the final steps necessary to complete its exit from the Chapter 11 process, including its shareholders' meeting to approve the capital increase contemplated under the Plan, which will take place on May 30, 2025. Following implementation of the Plan, Abra will remain GOL's largest indirect shareholder. GOL reiterates that, under the terms of the Plan, it will significantly reduce its indebtedness by converting into equity or extinguishing up to approximately US$ 1.6 billion of its pre-Chapter 11 funded debt and up to approximately US$ 850 million of other obligations. As such, considering that the conversion will be carried out based on the economic value of GOL's shares prior to the conversion, in accordance with applicable law, a substantial dilution of GOL's currently outstanding shares is expected (subject to shareholders' preemptive rights as provided under Brazilian law). AdvisorsIn the context of its restructuring efforts, GOL is working with Milbank LLP as legal advisor, Seabury Securities, LLC as investment banker, lead placement agent for the US$ 1.9 billion exit notes, financial advisor and sole restructuring advisor, BNP Paribas Securities Corp. as bookrunner (B&D) and placement agent for the exit notes, and AlixPartners, LLP as financial advisor. In addition, Lefosse Advogados acts as GOL's Brazilian legal advisor. Special note regarding forward-looking statementsThis material fact contains certain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. The words "will," "maintain", "plans" and "intends" and similar expressions, as they relate to GOL, are intended to identify forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. Undue reliance should not be placed on such statements. Forward-looking statements speak only for the date they are made. About GOL Linhas Aéreas Inteligentes is one of Brazil's leading airlines and is part of the Abra Group. Since it was founded in 2001, the company has had the lowest unit cost in Latin America, democratizing air transport with the aim of "Being the First for All". GOL has alliances with American Airlines and Air France-KLM and offers customers more than 60 codeshare and interline agreements, making connections to any place served by these partnerships more convenient and easier. GOL also has the Smiles loyalty program and GOLLOG for cargo transportation, which serves various regions in Brazil and abroad. The company has 14,5 thousand highly qualified professionals focused on safety, GOL's number one value, and operates a standardized fleet of 139 Boeing 737 aircraft. The Company's shares are traded on B3 (GOLL4). For further information, visit GOL Media Contacts U.S. Joele Frank, Wilkinson Brimmer Katcher: Leigh Parrish / Jed Repko lparrish@ / jrepko@ South America In Press Porter Novelli gol@ GOL Investor Relations ir@ View original content to download multimedia: SOURCE GOL Linhas Aéreas Inteligentes S.A. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
19-05-2025
- Business
- Business Times
Ryanair says tariff war top threat to growth; plans buyback
[LONDON] Ryanair Holdings said profit growth this year will depend on working through the risk of tariff wars, geopolitical conflicts and macroeconomic blows. The airline said it was too early to provide guidance for this year and has no visibility into the second half of fiscal 2026. Profit after tax for the year ended Mar 31 was 1.6 billion euros (S$2.3 billion), falling at the high end of the company's predicted range of 1.55 billion euros to 1.61 billion euros, the Irish budget carrier said on Monday (May 19). A 7 per cent drop in ticket prices led to passenger traffic rising to just over 200 million, up from 183.7 million in 2024. Tariffs imposed by the US have sewn uncertainty in the aviation industry, disrupting the free flow of aircraft required for growth and weakening a US economy that feeds travel to Europe. Still, Ryanair has signalled bookings are robust for the high season and ticket pricing is strong. The carrier also said it plans to buy back 750 million euros of shares over the next six to 12 months. Like other airlines, Ryanair is awaiting the outcome of trade talks between the US and the European Union, after EU officials threatened to target Boeing jets with retaliatory tariffs in response to US levies imposed in April. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Ryanair, which operates an all-Boeing fleet and is the US manufacturer's biggest customer in Europe, has said it would consider scrapping its US$33 billion plane order and switching to an alternate manufacturer if the added fees took effect. For their part, US carriers including Delta Air Lines have refused to pay surcharges on aircraft from Boeing's European rival Airbus. A new commercial jetliner can cost tens of millions after industry discounts, and range into several hundred of millions. Manufacturing issues at Boeing had already slowed deliveries for Ryanair. Europe's dominant low-cost carrier has twice lowered its forecast for passenger growth for the current fiscal year. However, the company said in January that capacity constraints would offset the financial impact by driving up ticket prices during the all-important summer season. Ryanair originally targeted traffic hitting 215 million passengers in fiscal 2026, but slashed the goal in November and then again in January because of delays with Boeing jets. The forecast currently stands at 206 million, up from 200.2 million passengers in fiscal 2025. Bookings this summer are looking strong as Ryanair expands its network into holiday destinations including Italy, Malta and Turkey. Summer is the most profitable time of year for carriers, when many passengers book flights for vacations abroad. Ryanair shares have gained around 18 per cent this year, compared with a 14 per cent increase at Wizz Air Holdings and a 2 per cent drop at EasyJet. Ryanair is the first major low-cost carrier in Europe to report earnings for the quarter. EasyJet will post its results on Thursday, followed by Wizz on Jun 5. BLOOMBERG
Forbes
02-05-2025
- Business
- Forbes
Boeing 737 MAX Tariffs Push Ryanair To Toy With Aircraft It Can't Fly
Ryanair's CEO, Michael O'Leary, has warned that the airline will reassess its orders for up to 329 Boeing 737 MAX aircraft due to the added costs of tariffs imposed by the Trump administration. O'Leary toyed with the notion that the airline might acquire China's COMAC C919 planes, though these are neither certified for the airline to fly nor available in the quantities necessary. Responding to O'Leary's speculative claim, U.S. representative Raja Krishnamoorthi warned that COMAC presents a security risk. Krishnamoorthi cited COMAC's close ties to the Chinese military and speculated the manufacturer may have acquired intellectual property illegally to build its aircraft. Ryanair's CEO responded to Krishnamoorthi in a letter on Thursday, Ryanair pointing the finger directly at the cost-impact of President Donald Trump's trade war. 'If the US government proceeds with its ill-judged plan to impose tariffs and if these tariffs materially affect the price of Boeing aircraft exports to Europe, then we would certainly reassess [Ryanair orders] Ryanair operates an all-Boeing fleet of Boeing 737s, including 205 Boeing 737-800s and 119 Boeing 737 MAX 8s. The airline has ordered additional aircraft, including 29 737 MAX 8s, with the last delivery scheduled for March next year. Ryanair has also ordered 150 737 MAX 10s, with options for an additional 150 and deliveries planned over the next decade. COMAC's planes have not yet passed the European Union Aviation Safety Agency certification. While the manufacturer has been attempting to win over carriers in Southeast Asia, its current production rate is too low for COMAC to pose any serious threat to the Airbus and Boeing duopoly. Even if China can follow through on its promise to help COMAC reach a production rate of 150 aircraft per year by 2028, it will still lag far behind. However, Boeing's 737 MAX 10 is still pending FAA certification, so Ryanair could face delayed deliveries of its future aircraft regardless. Ryanair's main issue is to avoid an unsustainable price increase on the 737 MAX 8s it is due to take delivery of over the coming year. In the letter to the Congressman, O'Leary said keeping these costs low 'is vital to our business model.' Boeing delivered 105 737s during the first quarter of this year, representing a significant share of its 130 aircraft delivered in total and an improvement over the 67 units delivered in the first quarter of last year. The company is on the path to recovery from numerous complications and delays that followed the Alaska Airlines 737 MAX mid-exit door plug blowout last year. In its first quarter results, Boeing said it still plans to reach a 737 production rate of 38 units per month this year. The U.S. manufacturer's commercial aircraft division is still operating at a loss of $537 million for the quarter. However, this is better than the $1.14 billion loss reported through March of last year. Its current commercial aircraft order backlog is $460 billion. A postponement of deliveries while the tariff dispute plays out would affect the airline's capacity and Boeing's revenue but might prove inevitable unless the Trump administration rethinks its current strategy to remove tariffs on new aircraft. 'It is up to Boeing and the U.S. government to ensure that its great aircraft are competitively priced,' O'Leary said. These tariffs are impacting airlines and aircraft manufacturers on both sides of the pond, with U.S. airlines looking for creative ways to avoid the added costs and Airbus blankly stating it will not take on the burden.
Yahoo
20-03-2025
- Business
- Yahoo
Inside Akasa Air's struggles with Boeing delivery delays and idle pilots
By Aditya Kalra and Abhijith Ganapavaram NEW DELHI (Reuters) - Frustration is building inside India's newest airline, Akasa Air, with top executives privately criticising Boeing for delayed plane deliveries and scrambling to assuage hundreds of anxious pilots who remain idle without work. Troubles at Akasa, backed by an Indian billionaire's family, are among the starkest examples of how Boeing's woes are crippling airlines globally and having a ripple effect on their planned expansions. The Mumbai-based low-cost airline, which started operations about three years ago, has a fleet of 27 planes, but has 226 jets - all Boeing 737 MAXs - on order. Deliveries have been delayed as Boeing's 737 programme faced regulatory scrutiny after a mid-air cabin panel blowout last year and suffered from the effects of a seven-week workers' strike. Just as Akasa has expressed confidence in Boeing publicly, its executives voiced optimism about U.S. planemaker's turnaround in a private February town hall with pilots, but top executives did not shy away from candidly revealing the operational stress they face, according to an audio recording reviewed by Reuters. During the previously unreported meeting, Akasa's chief of strategic acquisitions, Priya Mehra, described Boeing as the "elephant in the room" whose workers' strike caused "sleepless nights". Co-founder Aditya Ghosh referred to the company as "Boeing bloody ... retarding our speed". "We just don't have enough aircraft to fly ... nobody wants to sit at home and twiddle their thumbs," CEO Vinay Dube told the gathering of pilots. Akasa did not comment on queries about the remarks made in the town hall, but said it is in "continuous discussions with Boeing" and is "fully aligned with the steps they are taking to enhance quality and streamline resources." Boeing's woes have hit airlines globally. U.S. budget carrier Southwest Airlines, which operates an all-Boeing fleet, had to lay off workers company-wide for the first time in its history, in part due to delivery delays. However, most airline executives have avoided direct public criticism of Boeing since a closed-door revolt by major U.S. carriers led to the resignation of CEO David Calhoun last year. Campbell Wilson, the CEO of Akasa's larger rival Air India, which ordered 220 Boeing planes in 2023, this week said global aircraft shortage will persist for four to five years and "we are victims of circumstance." But as a far smaller player, the stakes are higher for Akasa, a loss-making carrier on an expansion spree in the world's fastest-growing aviation market. Compared to Air India and market leader IndiGo's combined 90%-plus market dominance, Akasa, the country's third-largest airline, has just a 4.7% domestic market share. Akasa's revenue quadrupled to $356 million last year, but its loss widened to $194 million from $86 million. In a sign of tension between the airline and the planemaker, Mehra informed pilots during the town hall that Akasa CEO Dube had told Boeing to stop holding "big events and parties" and "focus on the production." It was unclear which events Dube was referring to. Boeing did not have an official presence at China's biggest air show in November after its management ordered reduced participation in industry events when the strike began in September, though it attended the Aero India show last month. Boeing did not respond to Reuters' queries. Akasa's co-founder Ghosh, previously IndiGo's president, told the town hall that it would take 16 to 20 months to double its fleet size. That would mean Akasa will have roughly 54 planes by October 2026, though the airline had earlier estimated it would have 72 by March 2027. PILOTS NOT FLYING Akasa, started with the backing of late Rakesh Jhunjhunwala, dubbed India's Warren Buffett, went on a hiring spree and launched international routes to Qatar and Saudi Arabia within two years of its launch. Despite challenges, Akasa in February raised an undisclosed amount of new capital from Indian billionaire tycoon Azim Premji's investment arm and Jhunjhunwala's family. Of its 775 pilots hired for flying, 60%, or 465, "are able to log flying hours", Akasa said. That means 310 pilots are currently grounded due to the lack of planes. Akasa said "most of the remaining 300 pilots will also be able to fly by 2025-end", without explaining how. Three pilots said on condition of anonymity there was widespread frustration among those who joined the company months ago and still are not flying. "I am making peanuts sitting at home," said one pilot who cannot clock incentives and has lost out on career progression, both of which come with flying hours. Quitting would also force repayment of training bond of $41,700. Pilots earn basic annual pay of $35,000 to $111,000, depending on rank, for flying 40 hours a month. Employee costs at Akasa more than tripled to $90 million last year. "Akasa should take a hard look at (pilot) numbers and if necessary, they should trim the number," said Harsh Vardhan, chairman of Starair Consulting. In December, Akasa sent an email to pilots, seen by Reuters, which said those waiting for their training had a "unique opportunity" to diversify their skills into "information technology" and "maintenance and engineering". But in return, they would receive no more pay than they get sitting at home. "This initiative is not a stop-gap arrangement but rather a strategic effort to offer broader career development," Akasa told Reuters. "There is no other airline in India or the world that can offer better career advancement opportunities to their pilots." Sign in to access your portfolio
