Azul issued a note to the market on Monday night (24), confirming the end of the partnership with Latam and saying that the company is in a position of strength to lead a consolidation process in the Brazilian airline industry.
The consolidation plan the company refers to was not disclosed, but it is clear that the first step of that plan includes concluding the codeshare with the Brazilian subsidiary of the Latin American holding company.
According to what is published by our partner site AEROIN, LATAM Brazil indicated that continuing with the agreement in this context of recovery «doesn´t make any sense»:
“This codeshare agreement was an alternative identified by the two companies to face the drop in sales and the reduction of the air network during the height of the pandemic. With the prospect of improvement, it doesn’t make any more sense. Furthermore, both the expansion and the volume of passengers that benefit from this agreement did not meet LATAM’s initial expectations during 2021,” said Jerome Cadier, CEO of the subsidiary.
Azul’s statement indicates the following:
Azul has updated the market on its codeshare with LATAM and a possible industry consolidation move. Azul believes that consolidation is an important part of the post-pandemic industry response and the Company is in a strong position to drive that consolidation. The Company has hired advisors and is actively exploring industry consolidation opportunities in the region.
“The codeshare with LATAM was a unique solution in our pandemic response. We also realized that industry consolidation would be important for the post-pandemic recovery and Azul would be a key part of any such activity. At the end of the first quarter of 2021 we hired financial advisors and are actively exploring consolidation opportunities. We believe the cancelation of the codeshare by LATAM is a reaction to that process,” says John Rodgerson, CEO of Azul.
“Azul is emerging from this crisis in a leadership position in terms of liquidity, network recovery and competitive advantages. Our plans are unchanged and I am confident that we are in the best position to pursue strategic alternatives at this point in time,” Rodgerson added.
Azul will keep the market update of any developments.
