Brazilian low-cost carrier Gol Linhas Aereas Inteligentes has ended merger discussions with peer airline Azul, both parties shared on Wednesday (September 25). Gol's controlling shareholder, Abra Group, notified Azul of the termination.
“The parties have not meaningfully discussed or progressed a possible business combination transaction for several months as a result of Azul's focus on its Chapter 11,” Abra said in a securities filing.
Both parties signed a non-binding memorandum of understanding (MoU) in January, which had outlined a potential combination between Azul and Gol.
Azul also said the two airlines' codeshare agreement, announced in May, is now terminated.
“Azul reaffirms its commitment to the process of strengthening its capital structure and informs that it will keep its shareholders and the market in general informed of any relevant developments related to the termination of the commercial discussions regarding the potential business combination,” the company said in a statement.
Azul filed for Chapter 11 bankruptcy in May, with it later receiving court approval for $1.6bn in debtor-in-possession (DIP) financing and its agreement with AerCap, including the rejection of multiple lease and contracts. Azul aims to reduce its debt by over $2bn.