Merger Talks Between Brazil’s Azul and GOL Accelerate, Eyeing Creation of Country’s Largest Airline

Discussions regarding a potential merger between Azul Linhas Aéreas Brasileiras and GOL Linhas Aéreas Inteligentes are picking up pace, with significant developments suggesting a closer integration of the two airlines. A report from Bloomberg, citing sources familiar with the negotiations, indicates that Azul is exploring a scenario where Abra Group, which owns GOL and Avianca, would merge GOL into Azul in exchange for a stake in the newly formed entity.

GOL, which is currently navigating Chapter 11 bankruptcy proceedings, has announced its openness to various capitalization strategies to stabilize its operations. Concurrently, Azul has been proactive in preparing for the merger, enlisting the advisory services of Citigroup and Guggenheim Partners to formulate a viable merger proposal.

Both airlines, along with Abra Group, have refrained from commenting on the ongoing discussions as reported by ch-aviation.

The proposed merger would potentially create Brazil’s largest airline, boasting a combined fleet of 329 aircraft. GOL’s current fleet includes 139 jets, with an additional 86 aircraft on order from Boeing, though some older models are being negotiated for return to lessors as part of the Chapter 11 restructuring.

Azul’s fleet, on the other hand, comprises 166 aircraft, with models ranging from Airbus A320s to Embraer E195s, and includes regional operations through its subsidiary Azul Conecta, which operates 24 Cessna 208B Grand Caravan turboprops. Azul also has ambitious expansion plans with 55 aircraft on order and several leasing agreements to further enhance its fleet capabilities.

The potential merger is under scrutiny by Brazilian and regional antitrust regulators, whose approval is crucial for the consolidation to proceed. This merger could significantly alter the competitive landscape of the Brazilian aviation market, offering enhanced connectivity and operational efficiencies.