The airlines Azul and Gol signed this Wednesday (15) a memorandum of understanding to begin negotiations for a merger. If the union comes to fruition, the new company will concentrate 60% of the airline market in the country.
According to the memorandum, released to the financial market on Wednesday night, the merger depends on the end of Gol’s judicial recovery in the United States, scheduled for April. The new company will have three advisors from Abra, the holding company that controls Gol and Avianca, three from Azul and three independent directors.
The chairman of the board of the future company (chairman in English) will be appointed by Abra and the executive director (CEO) will be appointed by Azul. Thus, Azul’s CEO, John Rodgerson, will assume the presidency of the new group after the Administrative Council for Economic Defense (Cade) and the National Civil Aviation Agency (Anac) approve the merger, which is scheduled for 2026.
The memorandum provides that the new company will follow the “corporation” model, a company without a defined controller, with Abra being the largest shareholder. However, the definition of the exact percentages of participation of each airline depends on the end of Gol’s debt renegotiation in the United States.
Azul airline plane. Photo: Marcelo Camargo/Agência Brasil
Brands
The Gol and Azul brands will continue to exist independently, but the two airlines will be able to share aircraft, with one company flying the other, in order to increase connections between large cities and regional destinations.
Neither company will make new financial investments for the merger, which will only involve assets already available. Azul will also continue to buy planes from Embraer and seek synergies on international flights.
According to the memorandum, the combined leverage of the two companies cannot exceed that of Gol after the end of the judicial recovery. If this parameter is not reached, the merger will not materialize.
Leverage represents the use of third-party resources to multiply a company’s investment capacity.
At the end of the third quarter, Gol announced that its leverage was at 5.5 times and, in this Wednesday’s statement, it stated that it intends to reach the end of the judicial recovery in April, with the indicator at around 4.5 times.
