GOL Linhas Aéreas Inteligentes S.A.(GOL), a Brazilian low-cost airline based in Rio de Janeiro, that competes in Brazil and other South American countries primarily with LATAM Brasil, and Azul and also owns the brand Varig, announced that it has made the decision to file for Chapter 11 in the United States Bankruptcy Court for the Southern District of New York.

This voluntary filing allows GOL and its subsidiaries to utilize the US legal process to obtain capital, reorganize their financial situation, and enhance their business operations for the future, all while maintaining regular operations.

GOL commences the legal process in the US with a financial commitment of US$950 million in new debtor-in-possession financing from the Ad Hoc Group of Abra Bondholders and other Abra bondholders. The Company will request access to this funding during its First Day hearing in the upcoming days. The funding is contingent on court approval and, combined with cash flow from ongoing operations, will offer significant liquidity to sustain normal operations throughout the Chapter 11 proceedings.

GOL’s passenger and cargo flights, Smiles Loyalty program, and other operations are continuing as usual with the support of the court-supervised process and additional liquidity from DIP financing. The Company remains committed to delivering safe and cost-effective air travel services, ensuring the best travel experience for its customers. Travel arrangements, including ticket and voucher usage, as well as the accrual, purchase, and redemption of Smiles miles will remain unaffected. GOL’s codeshare and interline agreements will also remain available to customers.

Celso Ferrer, the Chief Executive Officer, stated that GOL has made considerable endeavors to enhance the travel experience for customers and simultaneously improve the company’s profitability and financial standing.

GOL will employ this procedure to reorganize its immediate monetary responsibilities and enhance its long-term financial framework for sustainable operation. The Company anticipates emerging from this process with a substantial infusion of fresh funds, including the newly secured US$950 million in DIP financing, which will facilitate GOL’s growth as a prominent carrier in Latin America.

Despite facing challenges to its capital structure and a decrease in aircraft availability, GOL maintains a strong operating performance. In the third quarter of 2023, GOL achieved exceptional operating results, outperforming other Latin American airlines. This marked the fourth consecutive quarter of consistently high operating margins. Notably, GOL achieved a historic record of R$4.7 billion in net operating revenue, reflecting a 16.4% growth compared to the same period last year. This growth was primarily driven by the significant contributions from the Smiles and GOLLOG cargo operations, which saw a combined growth of 65.1% in the third quarter of 2023 compared to the third quarter of 2022, resulting in a total revenue of R$412.6 million. Additionally, in December 2023, GOL’s occupancy rate increased by 4.8% to reach 82.7% compared to the same period the previous year. GOL’s operational indicators, including punctuality, regularity, occupancy rates, and fleet utilization, highlight the company’s commitment to efficiency and productivity, even in challenging circumstances.

GOL’s operations will remain unaffected during the supervision process overseen by the US Court. Employee salaries and benefits will be paid as usual throughout this period, with no disruptions to their regular duties.

GOL’s operations will proceed without disruption throughout the US Court supervision, and the company will uphold its obligations to business associates and suppliers for products and services rendered on or after the Chapter 11 declaration date.

GOL customers should proceed with their travel arrangements and continue flying as they usually do, utilizing tickets and vouchers as required. While flying with GOL, customers will still earn miles and can purchase and redeem miles through Smiles. GOL intends to uphold its obligations to customers, including refunds for tickets, travel coupons, and payments or credits relating to baggage or service claims, following the Company’s existing policies.