Abra Group has ceased exploring a business combination that would have seen member carrier Gol form Brazil’s largest airline with compatriot Azul after tie-up talks stalled in recent months.
Abra, which counts Gol and Colombian carrier Avianca as members, informed Azul that it was ending those discussions in a 25 September letter.
Azul confirms that it is no longer pursuing a combination with Gol.
In a parallel move, the airlines have terminated the codeshare agreement they established in May 2024 to connect their networks and frequent flyer programmes. Both Azul and Gol say they will honour air fares already purchased through the agreement.
Abra notes that “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”.
Gol and Azul signed a memorandum of understanding (MoU) in January to explore a combination. The airlines saw their networks as complementary, with minimal overlap, and the deal as a chance to achieve greater scale in Brazil and throughout Latin America.
However, the MoU was signed “in another scenario and at another moment of the companies, which is no longer the same”, Abra says.
“As a result, for good order and in accordance with the confidentiality agreement, Abra hereby provides written notice to Azul that Abra is terminating discussions with respect to a possible transaction,” says the airline group.
In June, Abra chief Adrian Neuhauser said that an Azul deal was still in play despite Azul’s Chapter 11 filing.
”We think Gol is fixed, and we’re happy that Azul is ultimately going through a restructuring and we hope that that will ultimately enable consolidation,” he said at the IATA annual general meeting in Delhi.
Abra seems to leave the door open to future talks of combining Gol and Azul, adding that “we continue to believe in the merits” of such a deal.
Sao Paulo-based Azul has said its business operations are holding steady as it works through court-supervised financial restructuring.
”Throughout this process, we are more than ever focused on operational performance, efficiency and financial stability, while keeping safety, customers and our crew members as priorities,” Azul said.
Azul reported encouraging trends on revenue generation and passenger capacity in the second quarter, benefiting from tailwinds such as a stronger Brazilian real and fewer operational disruptions caused by severe weather.
Both Azul and Gol reported surging year-on-year revenue during the April-June period, in context of strong regional growth. Airline Business data show carriers across Latin America posting strong aggregate financial results in the second quarter, with the likes of LATAM Airlines and Copa Airlines leading the pack in terms of profitability.
Azul sought bankruptcy protection from a US Court in May, with backing from major US carriers American Airlines and United Airlines. The process has involved securing new financing and shedding future lease commitments with Irish aircraft lessor AerCap.
The carrier recently filed several motions in the US Bankruptcy Court for the Southern District of New York to extend periods for filing and voting on its reorganisation plan.
“The company is also seeking… to amend, assume or reject certain aircraft and engine lease agreements, as well as to enter into or amend financing agreements with strategic counterparties,” Azul says.
Gol, for its part, has reported encouraging trends since emerging in June from its own Chapter 11 restructuring process. The Rio de Janeiro-based carrier says it is focused on operating its network of 147 domestic and 42 international routes.
