Azul, Gol inch closer to potential tie-up to form major Brazil airline

Azul and Golb, two of Brazil's largest airlines, are moving a step closer to a sweeping merger that would create a dominant carrier in Latin America's No. 1 economy, a securities filing showed on Wednesday. The union of the two companies, which follows months of talks and market speculation, would hold roughly 60% of the domestic market, far surpassing the local unit of Chile-based LATAM Airlines. Azul CE John Rodgerson said in an interview that the combined carrier, which would continue operating two separate brands despite the combined ownership, would be "a national champion." Seeking to rebuff potential competition concerns, Rodgerson pointed to other national carriers with dominant shares in their home markets, including LATAM in Chile, Lufthansa in Germany and IAG in the UK. "So these other countries understand the importance of having a strong airline that can grow," he told Reuters. "Especially a strong company which buys local aircraft." Azul's fleet includes regional jets from Brazil's Embraer as well as Airbus single- and twin-aisle planes, while Gol flies only Boeing 737 aircraft. He added that the move would allow for larger connectivity and lower cost of capital.<br/>