Azul and Abra sign non-binding Memorandum of Understanding with intent to combine operations in Brazil By Investing.com

Azul and Gola customers will have access to more destinations, routes, products and services. The companies have almost 90% complementary routes, will retain their independent operating certificates and brands

SÃO PAULO, January 15, 2025 /PRNewswire/ — Azul and Abra, majority investor Gol and Aviancaannounced today that they have signed a non-binding Memorandum of Understanding (MoU) with the intention of merging their businesses in Brazil. The intended structure, the result of the combination of Azul and Gol, will be set up Brazil on the increased level of global power in a highly globalized sector. The purpose of the business combination is to promote growth in the Brazilian aviation industry, through more destinations, routes, connections and customer services, while increasing the offer of domestic and international flights. The two companies have approximately 90% complementary routes that do not overlap. Although the MoU envisages unifying the strategy, the airlines are expected to keep their operating certificates, and thus their brands and operations, separate.

The memorandum of understanding, which includes governance and capital structure agreements, formalizes the intention of Azul and Abra to move forward with the next steps in combining their businesses and marks the beginning of the process for regulatory approvals. The intention to materialize the synergies between the airline networks and the use of the Azula and Gol fleets results in advantages for consumers, such as more options and products; and for Brazilwith an increase in the number of new destinations served by the Brazilian airline.

“Azul was created with the aim of expanding the Brazilian airline market, seeking to increase the access of Brazilians to air travel, regardless of where they are in the country, through expanded connectivity. This combination of forces would provide an opportunity to strengthen the sector, increase the number of flights on offer, reaching more than 200 cities served Brazil and the ability to compete in a highly globalized sector,” says Azul CEO, John Rodgerson. “Increased connectivity and job creation are some of the many positive outcomes expected from this agreement, while simultaneously delivering a high quality service and seeking the best value for money for the consumer,” he adds.

The proposed combination represents a major development for the national aviation industry and all economic activities facilitated by a mode of transportation of such importance to a continental country. With more than 220 million inhabitants and around 110 million air trips per year, the Brazilian market is less developed than that of several neighboring countries and has enormous potential for expansion. The MoU announced today aims to rapidly develop the industry.

The parties have agreed on the business principle that any combination will result in net financials of the merged entity that will be at least comparable to Gol’s net financials at the time Transaction (JO:) and after the completion of its reorganization plan.

The closing of the transaction is subject to agreement by Abra and Azul on the economic terms of the transaction, satisfactory completion of due diligence, execution of definitive agreements, receipt of corporate and regulatory approvals (including from Brazilian antitrust authorities), satisfaction of customary closing conditions, completion of Gol’s Chapter 11 plan of reorganization and receipt of compensation by Abre accordingly.

About Azul
Azul SA (B3: AZUL4, NYSE: AZUL) is Brazil the largest airline by number of flights and destinations, with more than 1,000 daily flights to more than 160 cities. With an operational fleet of more than 160 aircraft and more than 14,000 crew members, Azul flies more than 300 direct regional, domestic and international routes. In 2022, Azul was named the world’s most on-time airline, according to Cirium’s OnTime Performance-OTP Review – the world’s leading reference for operational data in the airline industry. In addition, in 2020 Azul was voted the World’s Best Airline by TripAdvisor (NASDAQ:) Travelers (NYSE:)’ Choice, the only Brazilian carrier to be awarded both prestigious industry accolades.

For more information, visit www.voeazul.com.br/imprensa.