Azul is a Brazllian carrier company formed in may 2008 by david neeleman with a fleet of 76 Embraer and 195 jets, Recently Azul airlines SA on Monday has increased its bid amount in order to purchase recently bankrupt airline Avianca Brasil’s busiest routes, The company offering $145 million.
Avianca Brasil filed for bankruptcy protection in December, On Monday Avianca Brasil’s pilots and aircraft crew said that they would hold an indefinite general strike on Friday, due to this sudden situation, which is goin to harm hundreds of staff. The bankruptcy has disrupted air travel in Brazil and but made it difficult for the carrier to raise much-needed cash.
Since that day Azul’s CEO david neeleman is interested in buying the routes of Avianca Brasil’s, because it would allow the carrier to break into the profitable route between domestic airports in Sao Paulo and Rio de Janeiro, which is one of the most busiest route in the world.
Azul, is ranked on 3 airline in Brazil, is now intrested in buying slots for some 28 flights a day between the two Brazilian cities. But it is still not sure that Avainaca is going to accept the amount or not.
If this deal is closed Azul will beat, Gol Linhas Aereas Inteligentes SA and Latam Airlines Group, which already dominate flights between Sao Paulo and Rio de Janeiro.
The two airlines bid a combined $140 million last month, with each contributing $70 million. Azul’s new proposal is now $5 million higher than what Gol and Latam offered, that is it is now $145.
Azul beleives that the sale of this single new UPI will provide Avianca Brazil’s employees, customers, creditors, and other interested parties, a legal and legitimate alternative to maintain its business as a going concern in light of the rapid deterioration of the company’s activities, The spokesperson added that “The new UPI also provides for a real competitive alternative to the significant market concentration that exists today in the shuttle service between Sao Paulo and Rio de Janeiro.”
Current Scenerio of Brazil Aviation Industry:
Currently Gol and LATAM Airlines Brazil are two major names in nonstop airlines between Sao Paulo and Rio de Janeiro, Goo is holding a 38% and whereas latam is holding 35% share of the market respectively. When brazilian domestic market is concerned Azul is in third place with a 14% share followed by Avianca Brazil with 12%.
Moreover Azul does not operate to Rio de Janeiro from Sao Paulo Congonhas, an airport popular with premium-paying business passengers due to its proximity to central Sao Paulo. It operates to Rio de Janeiro from Sao Paulo Guarulhos and its hub of Viracopos Campinas.This offer however can improve the scenerio for Azul now.
