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Five years ago, Delta Air Lines guaranteed a loan from its Brazilian partner Gol. That could now become a problem.
Delta Air Lines is involved around the world: the US airline has built a global investment network in recent years with shares in Aeroméxico, Republic Airways, Virgin Atlantic, Air France-KLM, Korean Air and China Eastern. It also had 9 percent in Brazil’s low-cost airline Gol.
But after Delta announced its entry into Chile Latam in the fall of 2019, it withdrew from Gol. However, the Brazilian airline could become a drag on Delta, according to the Reuters news agency. According to this, Gol has to repay $ 300 million in loans before Monday (August 31). If the airline can’t do this, Delta would have to step in.
There are no good prospects for Gol
The reason for this can be found in July 2015. At that time, Delta not only invested $ 56 million in new Gol preferred stock. It also endorsed $ 300 million in loans for Brazilians. Delta said at the time that it would deepen the existing partnership and improve Gol’s financial position and liquidity.
It is unclear whether Gol will be able to repay his loan himself. Rating agency Fitch downgraded the airline in mid-August, saying it reflected “the persistent weakness in demand for air travel in Brazil, the high level of uncertainty about when an effective recovery will occur, and Gol’s limited financial flexibility. to raise new funds. “
Delta has no money
But Delta is also affected by the crisis of the crown. In the second quarter, it posted a loss of close to four billion dollars. After state aid and its requirements have prevented layoffs at the airline, 1,900 pilots now have to fear for their jobs.
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