2560px Embraer 195 PR AXN of Azul Linhas Aereas Brasileiras at Santos Dumont Airport
Negotiations for a potential merger between Azul Linhas Aéreas and GOL Linhas Aéreas have ended, halting the creation of an aviation giant in Brazil. Simultaneously, GOL has requested the termination of the codeshare agreement it had with Azul, effective as of May 2024.
The decision to stop the business combination talks was announced by Abra Group Limited, the holding company that controls GOL. In a letter sent to Azul, the group attributed the breakdown to a lack of progress, stemming from Azul’s focus on its own restructuring process under Chapter 11, which it entered in late May.
According to the statement, Azul itself acknowledged that the initial agreement was signed in “a different scenario and at a different time for the companies, which is no longer the same.” This situation stalled progress on the merger, which had been explored under a non-binding Memorandum of Understanding (MoU) signed in January of this year.
Despite the cancellation, Abra Group left the door open for the future. The holding company stated that it “continues to believe in the merit of a business combination between Azul and GOL” and is therefore “ready, willing, and able to engage with applicable stakeholders” later.
End of the Codeshare Agreement
In a separate but simultaneous action, GOL formally requested the termination of the commercial cooperation agreements with Azul. The airline committed to honoring all tickets already issued under this alliance to avoid affecting customers.
This dual development marks a turning point in the Brazilian air market, putting on hold not only the creation of a dominant carrier but also one of the country’s most significant commercial alliances. Formal talks began on January 15, 2025, when Abra Group and Azul signed the MoU. The plan was to merge both airlines under a single corporate structure while keeping the brands independent.
The scenario became complicated when Azul filed for Chapter 11 protection in late May 2025, almost at the same time as GOL was successfully exiting the same restructuring process in early June. Although Abra Group initially stated its intention to proceed, Azul’s focus on its financial reorganization ultimately halted the deal.
The collapsed merger adds a layer of pressure on Azul, whose network strategy has historically focused on dominating the regional domestic market with its fleet of Embraer 195 aircraft. This niche, serving secondary cities with less competition, has been a cornerstone of its profitability. An entry by competitors like LATAM into these markets with smaller-capacity aircraft could directly erode Azul’s business model, exposing a significant vulnerability precisely at a time when the company is undergoing financial restructuring.
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