The current crisis has been particularly hard on South American carriers and their related maintenance networks.
Coronavirus deaths and infections have been extremely high across much of the continent, state support for airlines has been negligible and banks in the region are offering little to no support.
This has led several big airlines to seek Chapter 11 bankruptcy protection in the U.S., although even this has proved challenging, with a New York judge this week rejecting LATAM’s proposal for a fresh $2.5 billion of financing.
One relative bright spot in the region is Brazilian low-cost carrier GOL, which has cleared its debt repayments for the next three years and negotiated deep cost cuts via agreements with staff and suppliers.
As a result, the airline has said its monthly cash burn should halve for the rest of the year, allowing it to fully fund all aircraft capital expenditure and engine overhauls scheduled for 2020.
The airline ended August with a fleet of 130 Boeing 737s, although only 74 are operating in September as GOL gradually ramps up capacity.
All of the fleet are leased, and the airline has won some significant concessions from lessors in its bid to slash costs.
These included the deferrals and discounts taken by many of the world’s airlines, but also some usage-based lease payment plans—a structure that many other operators have sought, but that few observers expected lessors to grant.
“The agreements secured monthly lease payments in-line with the recovery of demand during 2020 and 2021 and won't impair GOL's post-pandemic cost structure with expensive deferral-only agreements,” stated the airline.
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