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Azul looking to buy bankrupt LATAM Airlines' Brazil operation, source says

A LATAM spokeswoman said the airline had not received any offer from Azul, that talks were not in progress and that LATAM had no intention of selling any of its parts

The logo of Brazil's airline Azul is seen on the roof of a bus at Viracopos airport in Campinas
Logo of Brazil's airline Azul is seen on the roof of a bus at Viracopos airport in Campinas. Photo: Reuters/Paulo Whitaker
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  • LATAM filed for bankruptcy protection a year ago;
  • A LATAM spokeswoman said the airline had not received any offer from Azul;
  • During the pandemic, Azul and LATAM developed a codeshare program to avoid competing in Brazil as the market shrank;
  • But that program suddenly ended this week, which Azul said was a reaction to its consolidation plans.

Brazilian airline Azul has approached Chile’s bankrupt LATAM Airlines with the aim of buying its Brazilian operation, a source familiar with the situation told Reuters.

Azul’s shares rose more than 5% in Sao Paulo on the news.

LATAM filed for bankruptcy protection a year ago and, while it has secured new liquidity in that process, it has yet to present a formal restructuring plan.

READ ALSO: Brazil’s Gol says domestic air travel outlook improving, aims to raise $563 million

Azul, controlled by JetBlue Airways founder David Neeleman, said in a securities filing on Monday that it was ready to lead a wave of consolidation in the Brazilian airline industry, which has been devastated by the pandemic.

On Wednesday, the newspaper Valor Econômico also said Azul was trying to lure LATAM and talking to its aircraft lessors.

A LATAM spokeswoman said the airline had not received any offer from Azul, that talks were not in progress and that LATAM had no intention of selling any of its parts.

READ ALSO: LATAM to stop codesharing agreement with Azul, resumes growth in Brazil

In addition to extensive international routes, LATAM has domestic operations, not just in Brazil but also in Chile, Peru, Ecuador and Colombia.

During the pandemic, Azul and LATAM developed a codeshare program to avoid competing in Brazil as the market shrank, which was blessed by regulators. But that program suddenly ended this week, which Azul said was a reaction to its consolidation plans.

Industry analysts had said throughout 2020 that Azul might try to buy LATAM in Brazil. The two airlines divide Brazil‘s market with a third carrier, Gol Linhas Aéreas.

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