The Wall Street Journal made the aviation market start on a high this Tuesday (24), reporting that Azul is talking to LATAM Group creditors about the possible purchase of part of the operations in Brazil.
The American newspaper reported that sources said that talks between Azul and the creditors of the LATAM Group are taking place, and the Campinas-based airline would be willing to buy the entire operation of the group and then sell them in other countries.
In addition to the purchase, the Wall Street Journal also mentions that Azul could also enter into a joint venture with LATAM, as a way to complement its operations in Brazil. Last week, Azul CEO John Rodgerson said in an interview that his company has a concrete interest in the rival’s operations in the country.
Azul shares rose 2.41% to R$37, LATAM shares in the US also rose 5.96% to $2.31. With the heated market, even GOL, a competitor of the two companies, obtained gains on the stock exchange of 1.70% at R$ 18.51.
On the other hand, LATAM said that it does not intend to sell part of its operations in Brazil and that the company is preparing to present its restructuring plan to leave the judicial recovery process based on Chapter 11 of the USA.
The company’s part in Brazil has taken over routes, aircraft and added new routes as part of the resumption of the sector in the country. LATAM has recently opened job openings in some of its main bases such as Brasília Airport, a hub that connects flights from all parts of the country.
The company’s offer in the country in August 2021 will be almost three times greater (277%) than in August 2020. The South, Southeast and Midwest regions drive the resumption with an increase in flights; in the Northeast, there will be growth in Ceará, Maranhão and Bahia. This represents a 77% resumption of its air network from before the pandemic.
In the fleet, the company definitively removed all its Airbus A350s, which are being gradually returned. To make up for the absence of the aircraft on long flights and consequently reduce its operating costs, LATAM will soon be receiving Boeing 787 aircraft, another ‘change’ in the fleet was the resumption of operations with the Airbus A320neo.
Debate on the purchase of companies and the future of the market
Last Friday (20), the Chamber of Deputies Tourism Committee held a debate on the purchase of LATAM by Azul, and what would be the pros and cons of this possible deal.
“Flight prices will most likely increase because of the lack of competition. We must remember that currently ticket prices are lower than in previous years and this is due to the current situation in the sector due to the pandemic.” said Eduardo Bismarck.
“We are not afraid in the event of an acquisition process in that market, it is clearly against our competitive agenda, but we also understand that it is a solution that has emerged in the market.” said Ronei Glazmann, Secretary of Civil Aviation.
“We are monitoring this process, but it is eminently private, a private negotiation and the government must not interfere, it must not interfere because the freedom of economic activity is enshrined in the Brazilian Constitution.” Finished.
Sources: InfoMoney and Merco Press