Brazilian airline merger would boost aviation sector, says Azul boss

The boss of Brazilian airline Azul has argued that its planned merger with rival Gol to create the country’s largest carrier will strengthen Brazil’s aviation industry and expand the number of routes on offer. CE John Rodgerson defended the tie-up as bolstering a sector still grappling with the financial fallout of the Covid-19 crisis, saying it would drive efficiencies and benefit consumers. Azul-Gol would control about 60% of the domestic market, giving rise to concerns about the potential impact on competition and ticket prices. But Rodgerson described it as a “merger of growth” that could increase the number of destinations served by Azul from 150 to 200. “We can strengthen our balance sheet and connect a lot more people,” the American businessman told the Financial Times. “[It is an] opportunity to grow and to add more cities to the map, add more [flight] frequencies. He added that the deal, which will require regulatory approval, could even lower ticket prices in certain markets, “because we’re going to get more capacity up in the air”. The proposed tie-up follows a difficult period for Latin America’s airlines. They received little direct financial assistance from governments during the pandemic, in contrast to the billions of dollars showered on US and European peers, leading many to skirt or fall into bankruptcy. Brazilian carriers also complain that the country’s expensive jet fuel prices and widespread passenger lawsuits push up costs and fares. Gol filed for bankruptcy last year, and is seeking $1.9bn of financing in order to exit Chapter 11 proceedings in the US, while Azul has struck out-of-court agreements with creditors to reduce its liabilities and unlock new funds. Latam Airlines, the region’s largest group, emerged from bankruptcy protection in late-2022.<br/>