Azul says it is not engaged in talks to make a bid for Avianca Brazil, following a Brazilian newspaper report that said the airline was studying a potential offer for its financially troubled competitor.
"The company is currently not engaged in any negotiations to make a bid for Avianca Brazil," says Azul in a notice to investors.
A report in Valor Economico had quoted Azul founder David Neeleman as saying that Azul was studying making an offer for Avianca Brazil, and that it could pay for an acquisition with available cash.
However, Azul says that Neeleman was referring to the airline's "fiduciary duty to evaluate potential market opportunities".
Avianca Brazil filed for bankruptcy protection earlier this week, saying it could not come to an agreement with lessors who planned on repossessing their aircraft. The airline has said it will maintain service to all destinations, but the long-term certainty of its future remains unknown.
Industry observers have pointed to a potential partnership between Avianca Brazil and Azul, in the context of a proposed joint venture among Colombia's Avianca, Copa Airlines and United Airlines. Azul has repeatedly expressed its interest in a joint venture with United, and questions have risen over whether Azul or Avianca Brazil could play a part in a larger US-Latin American airline joint venture.
Avianca Brazil is wholly owned by Synergy, which is the majority shareholder of Colombia's Avianca.
Azul chief executive John Rodgerson had noted previously that his airline had less than 7% overlap in its network with Avianca Brazil, when asked if Azul could partner with Avianca Brazil in a more extensive joint venture involving United.
He told FlightGlobal in January that Azul and Avianca are "pretty complementary".