MIAMI – Azul Brazilian Airlines (AD) has closed today the acquisition details of domestic carrier TwoFlex (2F) for a total purchase price of R$123m.
The transaction was approved on March 27, 2020 by the Brazilian Administrative Council for Economic Defense (CADE) and will consist of 30 monthly tranches and a final injection of R$30m.
The acquisition was announced in mid-January and represents a strategic move for AD to gain market share from one of its principal competitors, GOL (G3), which was the former owner of 2F from 2018 until now.
Trade operation’s overview
Further negotiations mean that payments will be subject to financial and operating conditions and the last payment will be deposited in guarantee in favor of the Company for a certain period. The prior link between AD and 2F remained at just 3 destinations operated by the first.
The purchased company was a merger between Two Táxi Aéreo and Flex Aero Táxi Aéreo in 2013. Until 2019, 2F operated a State project to connect cities and offered passenger and cargo services to 39 destinations.
With G3 and LATAM (LA) as its market competitors, the ownership will allow AD to strengthen and increase its network in the Brazilian regional market.
Other operations in the long-term
While AD has made several financial movements this week, Brazilian airlines are in general waiting for a response of a government bailout agreement that may come next week. The loans would be granted at R$3b for AD, G3, and LA starting in June, according to Brazil Journal.
To face the crisis, the new owner company announced a plan to gain liquidity and save cash that not only includes this purchase but also the deferred delivery of over 50 E2 aircraft from 2020 to 2024.