John Peter Rodgerson, CEO of Azul (AZUL4), discussed the essentiality of consolidation for Latin American airlines in a recent Bloomberg interview. Merging operations is touted as a way to reduce capital costs and enhance customer service. While Rodgerson did not comment on ongoing merger and acquisition activities, reports indicate that Azul is exploring a merger with Gol, with negotiations involving Gol’s controlling shareholder. The discussion gains relevance against the backdrop of the pandemic, which saw many Latin American airlines struggle due to insufficient government support. Prominent companies like Avianca Holdings SA, Latam Airlines Group SA, and Grupo Aeromexico SAB filed for bankruptcy in 2020. More recently, Brazilian airline Gol sought creditor protection. Rodgerson has also engaged with Brazilian President Luiz Incio Lula da Silva to discuss a government-backed financial relief plan for airlines. Despite various challenges, including currency devaluation, rising fuel costs, and devastating floods affecting operations, Rodgerson reaffirmed Azul’s EBITDA forecast. He expects profit to rise to approximately R$6.5 billion ($1.3 billion) in 2024, and the company’s net debt is projected to decrease to about three times EBITDA. Azul plans to pay off a $68 million bond maturing in the fourth quarter with cash.

Aviation, Private Equity, Financial Services,Brazil, Latin America