CADE orders notification of Azul and Gol’s codeshare

On 3 September, the Administrative Council for Economic Defense (CADE) decided that Gol and Azul must submit a notification on their codeshare agreement within 30 days. 

The agency launched an administrative procedure to assess whether the agreement should be submitted. Commissioner Carlos Jacques, rapporteur of the case, highlighted that it is not about a merger review, but rather the verification of a mandatory notification of the transaction. 

According to the rapporteur, codeshare agreements are not automatically exempt of review, being assessed on a case-by-case basis. Mr Jacques proposed criteria for the agreement to have CADE’s pre-merger control: participation in Brazilian airlines, overlap of airline routes, bilateral nature of the agreement, and equivalent effects of a merger, mainly regarding coordinated activities among competitors. 

In his vote, the commissioner recovered the record of CADE’s assessment of codeshare agreements and reinforced that there is no favourable antitrust presumption for this type of legal instrument. The analysis should consider the specificities of each transaction. According to him, transactions involving national airlines on domestic flights raise greater competition concerns than those signed among international companies. Therefore, the decision on TAM/Qatar’s transaction is not applicable to Gol and Azul’s case, given the number of differences between these transactions. 

The Tribunal of CADE agreed with Mr Jacques’ statement and unanimously voted for the mandatory notification of the merger as provided for in Article 88, Paragraph 7 of Law 12529/2011. 

In sum, the companies cannot expand routes under the codeshare agreement until CADE’s final decision. In case of non-compliance with the time limit, the agreement must be stayed immediately, respecting tickets already emitted to the end consumer. 

Access Case no. 08700.003565/2024-49