Azul Linhas Aéreas Brasileiras (AD, São Paulo Viracopos) is working on submitting within the next three months a proposal to the United States bankruptcy courts to merge with GOL Linhas Aéreas Inteligentes (G3, São Paulo Congonhas), sources have told the Brazilian newspaper Valor Econômico.

Azul is reportedly in discussions with Abra Group, owner of both Chapter 11-encumbered GOL Linhas Aéreas and Colombia’s avianca airlines (AV, Bogotá). The sources claimed the negotiations are advanced and have addressed structural, governance, and transactional terms.

However, the potential merger faces specific challenges, such as reflecting the true value of Azul’s and GOL’s current market prices and the approval of Brazil’s antitrust authority (CADE). The stock price of both carriers at the New York Stock Exchange has sharply declined in 2024, with Azul’s falling 45.82% and GOL’s tumbling 84.69%.

In May, Azul and GOL confirmed in security filings that they were engaged in independent discussions on a merger but had not entered into or formalised any agreement, binding or otherwise. No further announcements have since been made.

ch-aviation reached out to Azul but the Brazilian carrier declined to comment.

GOL Linhas Aéreas entered a Chapter 11 restructuring process in the United States this year. In May, it announced a five-year financial plan as well as a non-overlapping domestic codeshare agreement with Azul Linhas Aéreas.