Azul and Abra, the majority investor of Gol and Avianca, have announced today they have signed a non-binding Memorandum of Understanding (MoU) with the intent to combine their businesses in Brazil.
The intended structure, the result of a combination of Azul and Gol, will position Brazil at an increased level of global strength in a highly globalized sector.
The purpose of the business combination is to promote growth in the Brazilian aviation industry, through more destinations, routes, connectivity and services to consumers, with an increase in the supply of domestic and international flights.
The two companies have approximately 90% complementary and non-overlapping routes.
Although the MoU provides for the unification of strategy, the airlines are expected to keep their operating certificates, and therefore their brands and operations, separate.
The MoU, which includes governance and capital structure agreements, formalizes Azul and Abra’s intention to move forward with the next steps in a combination of their businesses and marks the beginning of the process for regulatory approvals.
The intention to materialize synergies between the airline networks and the use of the Azul and Gol´s fleets result in benefits for the consumer, such as more options and products; and for Brazil, with the increase of new destinations served by Brazilian aviation.
John Rodgerson, Azul’s CEO, says: “Azul was created with the aim of expanding the Brazilian airline market, seeking to increase Brazilians’ access to air travel, regardless of where they are in the country, through expanded connectivity.
“This combination of forces would provide the opportunity to strengthen the sector, increasing the number of flights on offer, reaching more than 200 cities served in Brazil and the ability to compete in a highly globalized sector.
“Increased connectivity and job creation are some of the many positive results expected from this agreement, while also delivering high quality service and the search for the best value for money for the consumer”.
