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.”

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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$12.3 billion ($2.1 billion) in debt. 

Gol currently operates nearly 140 jets, Airline Business data show. Azul is currently flying more than 160 aircraft, including ATR turboprops on regional routes. 

Azul says the deal would jump-start growth in the Brazilian domestic market, and also connect more of the country’s air travellers to international destinations.

“We think we can build an airline that is going to be able to compete globally when it comes to fleet, when it comes to engines, when it comes to OEMs, when it comes to access to capital – and those are going to be really, really critical to keep this market growing,” Shah says. “All of this, we think, is our technical case.” 

Executive Chairman David Neeleman said during the same call that Azul is still creating new domestic markets in Brazil and seeking “to access demand that has never been accessed before”.

“Our unique fleet and network combination allows us to be the only carrier in 82% of our routes… many of which are located in the fastest-growing regions of Brazil,” Neeleman says.

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