SAO PAULO (Reuters) – Brazilian airline Azul is expected to sign a memorandum of understanding with rival carrier Gol’s parent Abra for a potential merger between Azul and Gol, according to a report by newspaper Valor Economico. The report, citing sources involved in the talks, stated that the memorandum would outline intentions to merge and establish details on governance, capital structure, and different options to structure the deal.
Azul has been in talks with Abra Group to “explore opportunities” amid speculation about a potential tie-up with Gol. The two carriers announced a codeshare deal last May. A key variable for the potential merger is the conclusion of Gol’s Chapter 11 bankruptcy proceeding, which is expected in April, according to Valor.