Brazil Backs Azul-GOL Merger, Citing Aviation Sector Growth

Brazil’s Ports and Airports Minister, Silvio Costa Filho, has voiced support for the Azul-GOL merger, stating that it would strengthen the aviation sector and safeguard jobs. Speaking to Reuters, he emphasized that the government’s priority is to ensure industry stability and prevent airline failures.

“The potential GOL-Azul merger is positive for Brazil’s aviation, ensuring capacity growth and job security,” Costa Filho said.

Azul and Abra Group, GOL’s parent company, signed a non-binding Memorandum of Understanding (MoU) earlier this year to explore a business combination.

Despite concerns over potential fare increases, the minister dismissed speculation that the merger would lead to higher ticket prices. “The airlines plan to increase profitability through higher volume, not pricing. Strengthening their operations and expanding capacity could even reduce fares,” he explained.

If approved, the combined entity would control 62% of Brazil’s domestic market by capacity. The deal would require regulatory approval from CADE (Brazil’s antitrust authority) and other agencies.

LATAM Airlines Brasil CEO Jerome Cadier has warned that the merger would require “serious mitigation measures” from CADE to maintain market competition. CADE’s General Superintendent, Alexandre Souza, told CNN Brasil that regulators will thoroughly assess the competitive landscape if the merger moves forward.

With Brazil’s aviation market evolving, the Azul-GOL merger could reshape the industry, pending regulatory scrutiny and final corporate agreements.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com