Azul ends merger talks with GOL; codeshare agreement discontinued

Azul said it is focusing on strengthening its capital structure after entering Chapter 11 bankruptcy protection in May 2025. “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,” GOL stated. Abra Group indicated that it remained open to continuing discussions alongside Azul’s restructuring process.

With the end of the codeshare agreement, travelers will no longer be able to book single tickets combining flights from both airlines. The termination is expected to increase competition between Azul and GOL on overlapping routes. LATAM Airlines may benefit by attracting passengers seeking more seamless connectivity.

Both carriers reported net losses for fiscal year 2024. Since emerging from Chapter 11 proceedings in June 2025, GOL has improved its financial position but still posted a net loss of $280 million (BRL 1.5 billion) in Q2 2025—an improvement compared to previous quarters.

Azul continues efforts to simplify its fleet and network as part of its restructuring plan, aiming to exit Chapter 11 by early 2026. The company plans to return additional aircraft—primarily first-generation Embraer E195s—that are already out of service, reducing its fleet by around 35%. This move is intended to lower leasing and maintenance costs while increasing average aircraft utilization and limiting customer impact due to the targeted aircraft being inactive.

A smaller and simpler fleet should help Azul shift towards higher-margin services with less exposure to low-margin markets, resulting in reduced operating costs and improved reliability.