Azul Linhas Aéreas Brasileiras (AD, Sao Paulo Viracopos) has tendered a fresh bid for Avianca Brasil's assets after having withdrawn its initial proposal last month.

The carrier said in a stock exchange disclosure that it had petitioned the São Paulo Bankruptcy Court to hold a fresh auction involving a new isolated business unit (Unidade Produtiva Isolada - UPI) that contains certain Avianca Brasil slot pairs, including those for its São Paulo-Rio de Janeiro shuttle service. The UPI's bid price has been set at USD145 million.

Azul said its petition would not invalidate an existing asset sale plan, backed by Elliott Management (Avianca Brasil's largest creditor), GOL Linhas Aéreas Inteligentes, and LATAM Airlines Brasil, which was recently suspended by a São Paulo Court at the behest of another creditor, Swissport Brasil. The groundhandling company had argued the asset sale plan discriminated amongst creditors in violation of Brazilian law. The move has cast more doubt about Avianca Brasil's future given a dwindling fleet and reduced revenue inflows.

"The Company believes that the sale of this single new UPI will provide Avianca Brasil’s employees, customers, creditors, and other interested parties, a legal and legitimate alternative to maintain its business as a going concern in light of the rapid deterioration of the company’s activities," it said. "The new UPI also provides for a real competitive alternative to the significant market concentration that exists today in the shuttle service between São Paulo and Rio de Janeiro."

Azul's initial USD105 million non-binding offer included all of Avianca Brasil's AOC, approximately thirty A320 Family aircraft, all of its Sao Paulo Congonhas and Rio de Janeiro Santos Dumont slots and about half of the ones it controls at Sao Paulo Guarulhos. However, the offer was withdrawn in April after Azul accused Gol and LATAM of trying to squeeze out all remaining competition in the São Paulo-Rio de Janeiro market, Brazil's most lucrative market.