SAO PAULO (Reuters) -Brazilian airline Gol does not expect its Chapter 11 proceedings to trigger job cuts, its chief executive said on Friday, reiterating that the carrier’s operations will remain as usual while it is under bankruptcy protection.
Gol, Brazil’s second-largest airline in terms of passengers transported, filed for bankruptcy protection in the United States on Thursday as it grapples with high debt seen at around 20 billion reais ($4.07 billion).
CEO Celso Ferrer in an interview with CBN radio said that the carrier’s main goal with the move is to restructure its balance sheet so it can grow again.
“There will not be layoffs related to this process. From now on we want to grow,” Ferrer said, adding that operationally the carrier has been seeing a “significant recovery” after positive results in recent quarters.
Gol is the latest in a series of Latin American carriers to seek bankruptcy protection after the COVID-19 pandemic, following the path of sister company Avianca, Mexico’s Aeromexico and Chile-based LATAM Airlines.
However, Ferrer expects Gol’s proceedings to last “significantly less” than the 20 to 30 months it took for other airlines to exit bankruptcy protection, as it has simpler operations including flying a single type of aircraft.
Sao Paulo-traded shares of Gol were down more than 13.5% in morning trading, making it the biggest loser on Brazil’s benchmark stock index Bovespa, which was trading near flat.
Analysts at Bradesco BBI downgraded their recommendation on Gol to “underperform,” saying that “with or without Chapter 11, all scenarios lead to massive equity dilution.”
Santander analysts said they were placing Gol “under review.” JPMorgan analysts, who already had a “sell” rating on the carrier, said the Chapter 11 move did not come as a surprise as Gol’s financial situation was fragile.
($1 = 4.9095 reais)
(Reporting by Gabriel Araujo; Editing by Steven Grattan and Mark Porter)
