Brazilian airline Azul SA (AZUL.N) said on Tuesday it had reached an agreement with its aircraft lessors that would help it save some 3.2 billion reais ($594.61 million) in working capital through 2021 and be repaid beginning in 2023.
The airline has been in negotiations with lessors as the coronavirus crisis derailed Latin America’s air travel industry in March. Azul hired a restructuring firm when the crisis set in and said it was renegotiating its debts out of court to avoid a potential Chapter 11 bankruptcy filing.
The airline now says its new agreements cover 98% of the company’s leasing liabilities and has managed to reduce its rental costs by 77% between April and December of this year.
Azul said it would compensate for these discounts by paying “slightly higher” leasing costs starting in 2023.
Azul is Brazil’s No. 3 airline and is controlled by David Neeleman, the founder of Jet Blue.