Facing challenges on both the cash and debt fronts, Brazilian airline GOL has had to be creative to finance its upcoming engine overhauls.

The low-cost carrier has received access to a new credit insurance policy developed by Brazil’s foreign trade and export credit institutions, which will allow it to pay for maintenance at Rio de Janeiro-based GE-Celma.

The policy will allow GOL to seek third-party credit line of up to $209 million to finance maintenance of its CFM56-7B engines. Roughly two-thirds—about 180 units—of GOL’s in-service engines are the CFM56 model, according to Aviation Week Network's 2024 Commercial Aviation Fleet & MRO Forecast.

Due to the age profile of these engines, the data also predicts that GOL's CFM56 maintenance will cost around $90 million this year, but rise to a peak of almost $250 million in 2025.

By that point the airline will hope to be reaping the benefits of certain restructurings and a recently launched review of its capital structure.

In 2023, it concluded a debt restructuring but it is also looking at adjusting its near- and medium-term fleet obligations and the restructuring of its lease obligations.

Despite a big jump in pre-tax profit for the three months to Sept. 30, 2023, interest and exchange rate headwinds meant GOL posted a BRL1.3 billion ($260 million) loss for the quarter, versus a BRL1.5 loss a year earlier.

The new engine maintenance financing structure was needed, therefore, although it is interesting that maintenance performed in Brazil for a Brazilian airline is being guaranteed within the ambit of export credit, which would normally be expected to support sales from Brazil to foreign customers.

“This credit insurance policy can be used to enable maintenance services provided exclusively in Brazil by the GE-Celma MRO maintenance unit, supporting the local economy of Petrópolis, in the metropolitan region of Rio de Janeiro,” stated GOL.