Brazil’s Azul Gets Up to US$397M Fuel Loan

BRAZIL · AZUL · AIRLINES AND FUEL

Brazilian airline Azul has arranged a loan of up to R$2 billion (about US$397 million) with federal credit-risk cover, and the money can be used only to buy jet fuel for flights inside Brazil.

Azul, the Brazilian airline that left US bankruptcy protection in February 2026, has arranged a loan of up to R$2 billion (about US$397 million) that carries credit-risk cover from the federal government, according to a notice dated Saturday 24 October 2026. The money can be spent only on jet fuel for regular domestic flights, which ties the deal to the fuel-price squeeze that Azul’s finance chief blames for a slower recovery.

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American Airlines, a US carrier, exercised all of its Azul warrants in a filing dated Tuesday 20 October 2026 and received 31.8 million new shares, about 7.9% of the 400.8 million now in issue, so the loan matters to a US shareholder as well as to Brazilian passengers. Dollar values in this article use the Banco Central do Brasil’s PTAX rate of R$5.0377 per US dollar for Friday 23 October 2026.

What Azul Announced

Azul told the market that the financing is aligned with its long-term strategy and was contemplated as part of its restructuring plan, according to Money Times and InfoMoney. The operation went through ABGF with money from the Export Guarantee Fund, and the credit-risk cover comes from the Union, Money Times reports.

“The funds will be used exclusively to pay for aviation fuel purchased for regular domestic operations.”
Azul notice of Saturday 24 October 2026, as quoted by InfoMoney (translated from Portuguese)

The Export Guarantee Fund was created by Law 9,818 of 23 August 1999 as an accounting fund tied to the Finance Ministry, to cover guarantees the Union gives on export credit insurance. A 2009 amendment already counted domestic credit insurance for civil aviation as covered, and a provisional measure issued on Tuesday 30 June 2026, MP 1,374, added that this includes financing for aviation fuel and other inputs, according to the texts on the Presidency’s website.

The company added that the operation strengthens its liquidity and gives it more financial flexibility in the current scenario of fuel-price volatility. Together with existing cash and other financing obtained recently, the amount reinforces management’s confidence in its strategy and liquidity position, the notice says as quoted.

Why Fuel Is the Problem

Azul’s chief financial officer, Antonio Carlos Garcia, told Reuters on Monday 19 October 2026 that the recovery will take longer than first expected because high jet-fuel prices keep squeezing margins, even after the airline left Chapter 11 earlier this year. “We see a recovery at a later stage than before,” he said, adding that the timetable could slip by a year or more if fuel prices stay high.

Azul cut capacity by more than 10% in the second quarter from a year earlier and still expects to end 2026 with about 5% less capacity than in 2025, Garcia said. It has passed 60% to 65% of the fuel-price increases on to customers through fares, he added.

Garcia said the airline is nearing positive operating free cash flow, but restructuring payments, both from before and after Chapter 11, still weigh on cash generation. Azul reported in August that its total debt had fallen to R$21.4 billion (about US$4.25 billion).

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Azul

SA: AZUL4AZULIndustrialsAirlines15,367 employees

R$749M

Market cap

Valuation & profitability

Market capR$749M

Revenue (TTM)R$21.62B

Profit margin-12.3%

Return on equity0.0%

Price & risk

52-wk low
$0.7452-wk high
$3,400.00

Beta (volatility)1.31

200-day average$85.72

Revenue trend · 6y

20192024

Latest R$19.53B

Ownership

Institutions11.4%

Shares outstanding896M

Dividend

No regular dividend — earnings reinvested for growth.

What Azul does. Azul S.A., together with its subsidiaries, provides air transportation services in Brazil and internationally. It is also involved in the cargo or mail; passenger charter; development of frequent-flyer programs; intellectual property owner; travel packages; funding: aircraft financing; and provision of maintenance and hangarage services for aircraft, engines, parts and pieces, aircraft acquisition,…

Three Financing Steps in 25 Days

Under the BNDES deal a second tranche of about R$1.3 billion (about US$258 million) is due to become available in the fourth quarter of 2026, and Azul is prepaying about R$400 million (about US$79 million) of a costlier existing obligation as part of that deal, Money Times reported on 30 September. The BNDES loan has a term of up to five years.

At its investor day on Thursday 9 July 2026, Azul set a target for net debt to fall below 1.5 times EBITDA by 2029, and for its market value to be 150% above its then-current level by that year, Money Times reports. Net debt is debt minus cash, and EBITDA is a measure of operating earnings before interest, taxes, depreciation and amortisation.

What It Means for You

For US investors, the names that matter are American Airlines, now a shareholder in Azul, and Azul’s American depositary receipt programme, into which the shares delivered to American are being deposited, Money Times reports. The new loan adds liquidity but also debt, and none of the reports gives its price, term or repayment schedule.

For travellers in Brazil, the figures that matter are the roughly 5% capacity cut expected for 2026 and the 60% to 65% of fuel-price rises already passed on in fares, both from Azul’s finance chief. For taxpayers, the guarantee puts public money behind a private airline’s borrowing, and the notice as quoted does not say how large that exposure is.

Azul’s investor presentation of Thursday 9 July 2026 put fuel at about 30% of total expenses, with consumption projected at about 1.4 billion litres in 2026 and an expected fuel price rise of about 30% for the year, according to CNN Brasil. That is the cost the new loan is meant to pay for, though the reports do not say how much of the fuel bill the R$2 billion (about US$397 million) would cover.

What Is Not Known

The wording of Azul’s notice comes from InfoMoney, Money Times and CNN Brasil, which agree on the amount, the guarantor and the use of the funds. None of them names the lender, the interest rate, the term or the fee for the guarantee.

It is also not known how much of the loan the guarantee covers, when the money will be paid out, or whether the loan rests on the 2026 provisional measure described above, which none of the three reports cites. None of them quotes a statement from the Finance Ministry or ABGF.

Frequently Asked Questions

What did Azul announce?

Azul arranged a loan of up to R$2 billion (about US$397 million) with federal credit-risk cover, in a notice dated Saturday 24 October 2026. The money can be used only for jet fuel on regular domestic flights.

Who backs the loan?

The federal government, called the Union, provides the credit-risk cover through ABGF, which manages guarantee funds, using money from the Export Guarantee Fund. None of the reports names the lender.

Is Azul still in bankruptcy?

No, Azul left US Chapter 11 bankruptcy protection in February 2026, InfoMoney reports. Its total debt had fallen to R$21.4 billion (about US$4.25 billion) by August.

What is American Airlines’ stake in Azul?

American exercised all its warrants and received 31.8 million new shares in a filing dated Tuesday 20 October 2026. That is about 7.9% of the 400.8 million ordinary shares now in issue.

Sources: Presidency of Brazil, Law 9,818 of 23 August 1999 (Export Guarantee Fund), Presidency of Brazil, Provisional Measure 1,374 of 30 June 2026, Money Times, Azul loan with federal guarantee, 24 October 2026, InfoMoney (Reuters text), Azul fuel financing, 24 October 2026, CNN Brasil (Estadão Conteúdo), 24 October 2026, InfoMoney (Reuters text), interview with Azul’s finance chief, 20 October 2026, Money Times, American Airlines warrants, 20 October 2026, CNN Brasil, Azul investor day, 9 July 2026, Money Times, BNDES loan, 30 September 2026, Banco Central do Brasil, PTAX rate of 23 October 2026. Retrieved 25 October 2026.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief

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