Azul-Gol combination would create Brazilian airline able to ‘compete globally’

Azul’s leadership team is “really confident” that its proposed business combination with Brazilian competitor Gol will deliver long-term growth. That is according to Azul president Abhi Shah, who explained why Azul believes the combination makes sense during the company’s recent year-end earnings call. “We have very low overlap between Azul’s network and Gol’s network,” he says. “And we think that the low overlap is a key driver to future growth.” Azul wants to grow its domestic network to 200 cities, Shah says, and the company believes it can hit that target ”when we have these networks that are not overlapping, that are very complementary”. The carrier currently flies to more than 150 domestic destinations. Under a memorandum of understanding signed in January by Azul and Abra Group – parent of Gol and Colombia’s Avianca – the companies are exploring the feasibility of creating Brazil’s largest airline. Azul and Gol would both maintain separate customer-facing brands and operating certificates. Gol is currently undergoing a Chapter 11 restructuring process in US bankruptcy court, while Azul recently completed a financial restructuring by eliminating R$12.3b ($2.1b) in debt. <br/>