By Rodrigo Viga Gaier
RIO DE JANEIRO (Reuters) – Government loans for Brazilian airlines battered by the coronavirus crisis would only be ready in May, and not later this month as some had hoped, two sources familiar with the matter told Reuters on Friday.
The loans have been publicly announced and are being coordinated by Brazil’s state development bank BNDES. Gol Linhas Aereas Inteligentes <GOLL4.SA> and Azul SA <AZUL.N> have confirmed the talks and suggested loans of around 3 billion reais ($569.10 million) per carrier.
The sources, speaking on condition of anonymity, said LATAM Airlines <LTM.SN> has also asked for help from BNDES. Gol, Azul and LATAM control virtually all of Brazil’s commercial passenger flights.
Gol Chief Executive Paulo Kakinoff said earlier this month that any aid from BNDES would take up to two weeks to sort out. But the sources said the timeline has been pushed back until May.
The sources added that the amounts requested by the airlines were higher than expected. BNDES has decided it will not rescue the airlines alone, the sources said, and is bringing private banks, debtholders and aircraft leasing companies to the table.
“We have received positive signs from the banks to renegotiate debts,” one of the sources said.
Airlines around Latin America are increasing pressure on their governments for state aid to weather the coronavirus crisis after the United States approved a $25 billion package for its national carriers, much of which is money that will not have to be repaid.
In order to receive the aid in Brazil, BNDES is requesting that airlines cut executive bonuses and investments as well as suspend dividends, the sources said.
The carriers “cannot assume that they will come out with no scratches or without some sacrifices from a crisis like this,” the second source said.
(Reporting by Rodrigo Viga Gaier; Editing by Paul Simao)