GOL Linhas Aéreas Inteligentes (G3, São Paulo Congonhas) has updated its Chapter 11 five-year financial restructuring plan, which foresees fleet growth, an improving financial performance and "strong profitability", and a capital raise. It adjusts a version it proposed last month.

The plan projects the company’s fleet to grow to 167 aircraft by 2029, from 138 now. It also plots an increase in recurring (adjusted) EBITDA to BRL11.6 billion reais (USD1.92 billion), and the completion of a planned USD330 million equity capital raise combined with a USD1.54 billion new five-year debt financing raise.

“Since commencing this process last year, we have secured lessor concessions, addressed maintenance and past-due liabilities, launched a profit improvement plan, and reached agreements with key stakeholders which, when implemented through the Plan of Reorganisation, will deleverage GOL’s balance sheet,” the company’s chief executive officer, Celso Ferrer, said in a securities filing.

GOL used a foreign exchange rate of USD1 to BRL6.04 in its updated plan, reflecting the current macro environment. It also assumed:

  • approval of the Plan of Reorganisation filed in December 2024;
  • conversion of a significant portion of financial debt into equity, reducing GOL’s total debt and lease liabilities from USD6.5 billion pre-exit to an estimated USD4.7 billion by 2027;
  • completion of the USD330 million equity capital raise and USD1.54 billion exit debt financing, enabling repayment of USD1.32 billion in debtor-in-possession financing and adding approximately USD500 million in liquidity.

The exit debt financing will be secured by GOL’s Smiles Frequent Flyer Program, brand and intellectual property, takeoff and landing slots at key Brazilian airports, and an unencumbered pool of spare parts. The airline aims to exit Chapter 11 by May 2025.

As of January 2024, the Brazilian carrier operates a fleet of 138 aircraft, namely thirteen B737-700s, sixty-six B737-800s, fifty-two B737-8s, and seven B737-800(BCF)s, with eighty-two additional B737 MAX on order. By 2029, 63% of its 167-strong fleet will comprise B737 MAX models with the remainder split among B737-700s (5%), B737-800s (25%), and B737-800(BCF)s (7%).

In a separate note, GOL recently clarified that the company is currently focused on conducting a “competitive process to evaluate exit financing proposals from the Chapter 11 procedure." The update preceded the signing of a long-touted non-binding MoU by GOL's parent, Abra Group, concerning a potential merger with Azul Linhas Aéreas Brasileiras.