A councilor at the Brazilian competition authority has asked to review the codeshare agreement between the airlines Gol and Azul, two of leading companies in the sector in the country.
Councilor Gustavo Augusto Freitas de Lima made a formal request for review Tuesday, a process known as avocation, two weeks after the Superintendence of the Administrative Council for the Economic Defense, or CADE, closed a gun-jumping probe into the companies.
In his avocation request, de Lima expressed concerns over the alleged negative impact for competition and consumers.
“Given the relevance of the analysis conducted by the Superintendence, the specificities of the case at hand, the potential impacts on the aviation sector, and in order to standardize the guidance regarding the mandatory notification of codeshare agreements, I believe it’s necessary to bring this gun-jumping probe before this Tribunal for a more thorough examination,”
he said.
Members of CADE's Tribunal will now have to decide whether to accept de Lima's avocation.
— Superintendence's decision —
On April 1, the Superintendence ruled that the codeshare agreement is considered an associative act that doesn’t require prior notification to the authority. But a notification will become mandatory if the agreement extends beyond two years.
However, the investigative arm highlighted that the codeshare agreement isn't a typical one and raised competition concerns.
“I also consider it inappropriate to wait for the two-year period following the completion of the operation to require its notification, given the potential harm that may be caused to the aviation market and consumers during this interim,”
said de Lima.
Gol and Azul formally announced their codeshare agreement on May 23, 2024. Ticket sales began nearly two months later, on July 11, offering 40 non-overlapping domestic destinations.
Overall, it allows for code-sharing between the companies, enabling certain flights to be marketed through both companies' sales channels. The partnership aims to create new routes by interconnecting the flight networks of the parties involved.
Apart from the gun-jumping probe, Gol and Azul are in discussions about merging their businesses to create a stronger airline in Brazil. The country has only three major players in this industry, with Latam Airlines being the third.
Source: MLex
