Brazilian low-cost carrier GOL could be considering filing for Chapter 11 bankruptcy protection in the United States as early as February 2024, according to Brazilian newspaper, Folha de Sao Paulo.
The news triggered a stock market sell off, with shares in the airline down by as much as 13% at times during trading hours on January 15, 2024.
Although its operational result is positive, with the carrier reporting a 17.7% operational margin in Q3 2023, its last reported financial period, GOL is reportedly struggling with debt and lease payments. The airline has built up 20 billion reais (around US$4.1 billion) in debt, of which 3 billion reais (US$600 million approximately) is due within 12 months.
Latin American airlines such as LATAM and Avianca have sought Chapter 11 protection in the past even if, as is the case with GOL, they have had a limited presence in the US. This is because that jurisdiction is often seen as a more favorable legal framework for debtors to restructure their obligations.
On December 1, 2023, GOL announced via a stock market filing that it had hired Seabury Capital, a consultancy firm specializing in the aviation industry, to review its capital and debit structure and improve its cash position.