GOL-Azul Negotiations Collapse: Merger and Codeshare Deals Are Off
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GOL Linhas Aéreas informed its shareholders and the market of a double breakup in its relationship with Azul Linhas Aéreas.
On one hand, Abra Group Limited, its indirect controlling company, has terminated negotiations for a possible business combination with Azul. On the other hand, GOL itself requested the termination of its codeshare agreement.
In the letter sent to Azul, Abra Group argued that, following the signing of the memorandum of understanding, "the parties have not meaningfully discussed or progressed a possible business combination transaction for several months as a result of Azul's focus on its Chapter 11 proceeding". The communication also notes Azul's own position, which reportedly stated that the initial agreement occurred in "another scenario and at another moment of the companies, which is no longer the same".
Despite the termination, Abra Group was clear about its future stance: "We continue to believe in the merits of a business combination of Azul and GOL" and, as such, "Abra is ready, willing and available to engage with the relevant stakeholders".
In a parallel move, GOL reported that it requested from Azul "the termination of the agreements signed in May 2024, which aimed to establish commercial cooperation via codeshare." As part of its commitment to customers, the airline assured that it will honor the tickets already sold under this partnership.
This double breakup marks a turning point in the Brazilian air market, putting on hold not only the creation of a regional aviation giant but also one of the country's most important commercial alliances.
Abra Group and Azul had signed a non-binding Memorandum of Understanding (MoU) to explore a potential business combination on January 15 of this year. The MoU outlined the intention to merge Azul and Gol under a single corporate structure, creating a "Combined Company," while keeping the brands independent.
This occurred as Gol was in the final steps of concluding its exit from Chapter 11, which it had entered into after the pandemic, a process that was finalized in early June. However, almost in parallel, Azul Linhas Aéreas filed to enter the same restructuring process in late May.
And while Abra had initially stated its intention to move forward with negotiations despite this situation, as stated in the Material Fact published today, Azul's focus on the Chapter 11 process stalled the path.
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