By Gabriel Araujo and Luciana Magalhaes
Sao Paulo (Reuters) -Airline Group Abra has decided to finish the conversations about a potential fusion among the Brazilian carrier goal, who controls, and rival of Azul, a presentation of values showed on Thursday night.
The measure ends the prospects for the creation of a dominant airline in the largest economy in Latin America, which would have maintained approximately 60% of the domestic market, exceeding the local Latam Airlines unit based on Chile.
Abra Group – The majority investor in Gol and Colombia Avianca, and Azul signed for the first time a memorandum of understanding in January destined to combine the two operators, after months of conversations and market speculation.
However, Azul requested the bankruptcy protection of chapter 11 in May, a measure that analysts warned at that time would probably spit the potential fusion with goal, which in June arose from their own bankruptcy procedures.
Blue shares increased 18% in the afternoon negotiation in Sao Paulo, while goal shares increased 5%.
Industry struggles
“The parties have not significantly discussed or progressed a possible transaction of business combination for several months as a result of the blue approach in its chapter 11 procedure,” he opened Blue in a letter, according to the goal presentation.
Both companies sought bankruptcy protection when the industry dealt with debt loads, a strong decrease in traffic during Covid-19 pandemic and delays in the delivery of airplanes.
Abre said that the January memorandum arrived “in another scenario and at another time for companies.”
Goal and Azul also ended their 2024 shared code agreement for cross -sales tickets and integrating their loyalty programs, which had been under intense scrutiny of anti -proteated cade surveillance. Open, however, left the door open for future conversations.
“We continue to believe in the merits of a commercial combination of blue and goal and, as such, Abra is ready, willing and available to interact with the pertinent interested parties,” he said.
In a separate presentation, Blue confirmed that the conversations had ended and reaffirmed their “commitment to strengthen their capital structure.” Azul expects to go out of bankruptcy in early 2026.
Competition concerns
The potential fusion had raised concerns and criticisms of Latam competition, although some experts described him as a “necessary evil” for a financially healthy sector in Brazil, where costs are high and air trips remain restricted.
“We never consider a scenario in which such merger would be approved without mitigation measures. No country in the world would do that,” said the CEO of Latam Brazil, Jerome Cadier, to Reuters in an interview on Friday.
(Tagstotranslate) Latam Airlines (T) Goal
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