Gol and Azul must cease comments about merger, says president of Cade.
Gustavo Augusto warns that companies should act formally if they wish to pursue a merger, avoiding public speculation.
By Luciana Magalhaes
BRASILIA (Reuters) - Airlines Gol and Azul should stop making public comments about a potential merger unless they are prepared to formally pursue it, the president of the Administrative Council for Economic Defense (Cade) said in an interview with Reuters.
"They should stop talking about mergers if they are not going to do or notify about a merger," said the president of Cade, Gustavo Augusto, in an interview on Friday night.
Last week, Cade (Brazil's antitrust agency) ruled that the companies must formally notify the agency within 30 days about the codeshare agreement from May 2024 and prevented them from extending the partnership to additional routes before the agency evaluates the deal.
This order did not require the two aviation companies to provide information about a potential merger, but Augusto made clear Cade's concern about the market impact of plans announced prematurely and subsequently left unresolved.
"When it's a company that has shares, where you have a dominant position in the market, and you have to be careful with your communication, you shouldn't announce a merger or acquisition operation that isn't ready and hasn't been presented to the regulatory authorities," said Augusto.
Earlier this year, Azul and Abra, the majority investor in Gol and Avianca, signed a non-binding memorandum of understanding.
The proposed combination aims to strengthen operations, with both airlines claiming 90% route complementarity — a situation that CADE (Brazil's antitrust authority) will need to verify if the deal goes ahead. In response to Reuters on Monday, Azul stated that it will analyze CADE's decision on the codeshare agreement and denied any "gun jumping" practices, in which companies engage in pre-merger integration without regulatory approval.
Gol stated that codeshare is a standard practice in the airline industry and added that the company has always respected regulatory decisions.
Both airlines declined to comment on potential merger plans.
Top executives from both companies have indicated in recent months that they are prioritizing their respective restructuring processes before any potential combination. The airlines have not publicly ruled out the possibility of a merger.
Azul filed for bankruptcy protection in the United States in May, just days before Gol exited its own restructuring process.
