Azul Airline Seeks $30 Million Engine Financing Deal With AerCap

Brazilian airline Azul SA is seeking court approval to borrow $30 million from AerCap Ireland Ltd. to fund the overhaul of its aircraft engines.

Azul’s proposed deal would give AerCap, the airline’s largest aircraft lessor, an unsecured priority position within its bankruptcy, according to a stipulation filed on Nov. 29 in the US Bankruptcy Court for the Southern District of New York.

The proposal is part of a larger settlement approved in August between Azul and AerCap, a subsidiary of AerCap Holdings, to restructure its aircraft and lease portfolio to help the airline emerge from Chapter 11.

The deal allows ...