Brazil’s Azul Linhas Aereas has ended commercial discussions regarding the merger with Abra Group’s GOL Linhas Aéreas Inteligentes (GOL), according to a securities filing on September 25, 2025. The discussions were based on a non-binding agreement signed on January 15, 2025, that outlined possible terms for a merger.
Additionally, both airlines announced the end of the codeshare agreement disclosed on May 23, 2024, further signaling a clear strategic split between them. They also stated that all tickets already issued under the agreement will be honored.
Azul And GOL Drop Ambitious To Create A Mega-Carrier In Brazil
Azul Linhas Aereas, Brazil’s largest airline by number of flights and cities served, and GOL have abandoned their ambitious plans to create a mega-carrier in Latin America. If merged, the two Brazilian carriers would operate a combined fleet of 330 aircraft and serve nearly 300 domestic and international destinations.
The merger would not only have created the country’s largest domestic airline but also concentrated 75% of capacity in the hands of just two carriers, an outcome certain to draw regulatory scrutiny. In its filing regarding the termination of merger talks, Azul stated that it remains focused on strengthening its capital structure following its Chapter 11 bankruptcy proceedings. The airline has been under Chapter 11 protection since May 2025.
Meanwhile, GOL said in a statement that Abra Group, the indirect controlling shareholder of GOL, “has been available to continue advancing the discussions towards a business combination” and has indicated that discussions could happen in parallel to Azul’s Chapter 11 case. However, GOL added that:
“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 proceeding.”
Impact Of The Codeshare Termination
The end of codeshare termination between Azul and GOL has several impacts, including competition and market dynamics. First, travelers will no longer be able to book a single ticket that combines Azul and GOL flights.
Additionally, without a codeshare, Azul and GOL will compete more aggressively on overlapping domestic routes. Meanwhile, LATAM Airlines, Brazil’s other major carrier, could benefit by capturing passengers who need more seamless connectivity. Indeed, the end of the codeshare deal marks a clear strategic split between the two carriers, with Azul focusing on its financial restructuring and signaling no plans to resume such talks in the future.
It is also worth noting that both airlines reported a net loss for the fiscal year of 2024. However, since emerging from Chapter 11 proceedings on June 6, 2025, GOL has been in a stronger financial position. According to the financial report, GOL posted a net loss of $280 million (BRL 1.5 billion) in Q2 2025. While a negative number, it represents an increase from $728 million (BRL 3.9 billion). Meanwhile,
Azul To Simplify Its Fleet Lineup Amid Chapter 11
Azul has been in Chapter 11 bankruptcy protection since May, and will be accelerating its fleet and network simplification efforts in order to exit restructuring by the time early 2026 comes around. The Brazilian airline is looking to simplify its network by returning additional aircraft (mostly first-generation Embraer E195s) on top of the company’s prior requests, which will see it reduce its fleet by around 35%.
Azul has a total of 189 aircraft, with all units slated for return being models that were previously out of service, ultimately limiting the impact on customers. This will help the airline slash its leasing and maintenance costs while lifting average aircraft utilization. Targeted aircraft are already out of service, so the revenue impact will be limited while the company will see costs fall.
Having a smaller and simpler fleet helps the airline pivot its network towards higher-margin services, with less capacity allocated to thin-margin markets. The benefits of this are fairly clear, with lower cost per available seat mile (CASM), better reliability, and improved capital expense relief.
