Azul S.A., a leading Brazilian airline, has filed for voluntary protection under the U.S. Chapter 11 financial reorganization process. As a result, Moody's Ratings has downgraded Azul's corporate family rating to Ca from Caa2, with a negative outlook. The airline is undergoing a restructuring process that involves a secured commitment for debtor-in-possession financing of approximately $1.6 billion, which aims to eliminate over $2.0 billion in debt and contemplate further equity financing of up to $950 million upon emergence. The restructuring plan includes an equity rights offering backstopped by financial partners and additional equity investment from United Airlines and American Airlines. The process highlights Azul's efforts to enhance liquidity and emerge from bankruptcy, although the recovery period is expected to be prolonged due to limited financial flexibility.