By Brazil Stock Guide – Azul S.A. (AZUL), the Brazilian carrier undergoing Chapter 11 proceedings in New York, is seeking court approval to reject several Embraer (EMBR3.SA) aircraft and Pratt & Whitney engines as part of its fleet optimization plan, according to a motion filed on Sept. 17 with the U.S. Bankruptcy Court for the Southern District of New York.
The request, submitted by counsel Davis Polk & Wardwell LLP, would allow the airline to terminate leases tied to five Embraer ERJ190-200 jets powered by General Electric (GE) CF34 engines, along with a leased Pratt & Whitney Canada PW127M engine. Azul argued that these aircraft are no longer essential to its operations and impose unnecessary costs as the company seeks to restructure its balance sheet.
Fleet rationalization at the center
The carrier emphasized that the move is part of a broader effort to streamline its fleet and reduce obligations linked to older equipment. Azul said the rejected leases represent “burdensome obligations” and their elimination would serve the best interests of the airline, its creditors, and stakeholders.
If approved by Judge Sean H. Lane, the rejection would be effective as early as Oct. 2 for the Embraer jets and Oct. 7 for the Pratt & Whitney engine. The lessors include ICBC’s Sky High Leasing units and Willis Lease Finance Corp. (WLFC).
Bankruptcy background
Azul and affiliates filed for Chapter 11 on May 28, 2025, in an effort to restructure billions in debt while maintaining operations. An unsecured creditors’ committee was appointed in June, but no trustee has been requested. The airline continues to operate flights while reorganizing under court supervision.