By Luciana Magalhaes
SAO PAULO (Reuters) – A Brazilian government-backed credit line for struggling airlines should be ready by early 2025, helping the industry ride out a bumpy stretch for big carriers, Ports and Airports Minister Silvio Costa Filho told Reuters.
Gol Linhas Aereas, which is negotiating its exit from bankruptcy protection, and Azul, which recently renegotiated debts to raise fresh capital, are both in talks with the government about the credit, Costa Filho said.
“Our expectation is to have these operations no later than in the first three or four months,” the minister said, adding that the final details of the program may clear the lower house of Congress as soon as next week.
The aid package, currently set at 4 billion reais ($690 million), would use resources from the National Civil Aviation Fund, for loans issued by state development bank BNDES.
Azul confirmed it is in talks with the government about the credit line. Gol did not immediately comment.
Gol reached a restructuring agreement this month that will likely get the company out of Chapter 11 next year. Azul struck a deal with creditors to raise as much as $500 million, making it the only major Brazilian carrier to avoid Chapter 11 since the coronavirus pandemic.
Costa Filho said the government support has been needed since the pandemic. “Unlike other countries, Brazil did not immediately help the airlines.”
Regarding rumors of a potential tie-up between Gol and Azul, the minister said he saw nothing underway.
“Today I don’t feel there’s anything concrete regarding the merger of these two companies,” he said.
Azul said discussion of a possible business combination are ongoing. Gol did not immediately comment.
(Reporting by Luciana Magalhaes; Editing by Brad Haynes and Bill Berkrot)
