By Brazil Stock Guide – Brazil’s state development bank BNDES approved on Thursday, July 30, access to about $ 1.56 billion (R$ 8 bilion) in working-capital financing for four domestic airlines hit by a sharp increase in jet-fuel costs linked to the war in the Middle East.
Azul SA (B3: AZUL54), Gol Linhas Aéreas, Latam Airlines Brasil and regional carrier Ata Aerotáxi Abaeté will be eligible to apply for the funds through December 2026. The limit applies to the facility as a whole and does not represent an immediate disbursement or an allocation of BRL 8 billion to each company.
Azul’s preferred shares trade under the AZUL54 ticker following its 2026 equity offering, while Latam Airlines Brasil is a unit of Latam Airlines Group SA (NYSE: LTM). B3 lists Azul’s current share codes, and NYSE identifies Latam’s US-listed depositary shares.
The financing will be funded by the National Civil Aviation Fund, known as FNAC, which is overseen by Brazil’s Ports and Airports Ministry. Each loan will remain subject to credit analysis, approval of guarantees and the risk terms assigned to the individual borrower.
Jet-fuel acquisition costs almost doubled between April and May as the conflict in the Middle East escalated. Fuel is one of the largest operating expenses for airlines, making sudden price increases a threat to cash generation, route economics and flight capacity.
The program carries a fixed base rate of 4% a year, as set by FNAC’s management committee. BNDES will add an annual fee of 1.3%, while an additional credit-risk charge will vary according to the guarantees provided for each transaction. Maturities may extend to 60 months.
The proceeds are intended to cover day-to-day operating expenses and help carriers maintain financial stability as energy costs rise. The government also aims to limit reductions in flight capacity, route suspensions and job losses.
“The funds will support companies that play an important role in the economy, contributing to the continuity of operations and the supply of air transportation to the public, the preservation of jobs and the mitigation of flight-network reductions or route discontinuations,” BNDES President Aloizio Mercadante said.
“These companies were already heavily affected by the pandemic and are now facing higher aviation-fuel costs because of the war in the Middle East,” he added.
Brazil authorized FNAC to provide financial support to airlines under Law 14,978, enacted on Sept. 18, 2024, as the industry continued to deal with the financial impact of the Covid-19 pandemic.
Provisional Measure 1,349, issued on April 7, 2026, subsequently established the rules for working-capital lending. The measure was designed to cushion airlines from sudden operating-cost shocks, particularly those caused by rising fuel prices.
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