Azul & GOL Want To Merge, Form Brazilian Mega-Airline

Brazil’s second and third largest airlines are working toward a merger, which would see them potentially become the biggest airline in the country (well, sort of).

Azul & GOL want to merge, maintain separate brands

Azul and GOL are working toward a merger, as the companies have signed a non-binding memorandum to explore this. If this were to happen, it would create Brazil’s largest airline, with nearly 60% domestic market share, surpassing LATAM Brazil. If this deal gets approved, Azul and GOL would maintain their separate branding, despite the combined ownership.

For context on the two airlines:

• Azul has a fleet of around 160 aircraft, with another 80 or so aircraft on order; the carrier’s fleet consists of Airbus A320neos and A321neos, Airbus A330-200s and A330-900neos, ATR 72-600s, and Embraer E195s and E195-E2s
• GOL has a fleet of around 130 aircraft, with another 100 or so on order; the carrier’s fleet consists exclusively of Boeing 737s, including 737-700s, 737-800s, and 737 MAX 8s

The argument in favor of the merger would be to allow for better connectivity and lower cost of capital, including more leverage when negotiating with aircraft manufacturers. Obviously there are some competition concerns, but the companies claim that plenty of countries have dominant airlines, and do just fine. Lufthansa in Germany is cited as an example, and I’m not sure that really demonstrates the point in a good way.