In May 2024, Gol and Azul announced their codeshare agreement. Earlier this year, they also opened talks on a potential merger. Back in April, CADE’s technical division, the Superintendence-General (SG), had argued that the codeshare deal should have been reported to the antitrust authority and amounted in practice to an “associative contract” between rivals. Although the SG archived the case, the CADE Tribunal later reopened it. If CADE’s commissioners find that the agreement was improperly executed without prior notification, the airlines could face fines.

One of the commissioner’s main questions was whether Gol or Azul had discontinued any overlapping routes after the codeshare agreement took effect.

Gol responded that changes in flight networks—including frequencies, connections, and schedules—are routine in the airline industry and were not influenced by the codeshare deal. The company stated that, based on routes with overlapping services at the time of the codeshare signing and flight schedules published by Brazil’s civil aviation regulator (ANAC), two regular overlapping routes were discontinued. However, Gol did not specify which routes.

Gol further argued that labeling the codeshare as an associative contract is “based on incorrect premises and is fundamentally flawed.”

“It is impossible to equate the codeshare agreement with precedents involving actual infrastructure sharing,” the airline said. Gol maintained that the SG’s conclusion was based on the mistaken assumption that codeshare agreements involve shared infrastructure. Gol insisted the agreement involves only code-sharing, without the creation of a joint enterprise or shared risks and returns, thereby ruling out classification as an associative contract.

Azul echoed this argument in its response, emphasizing that flights sold through the codeshare account for only a small portion of its total revenue.

Azul also stated that since the codeshare’s implementation, there has been no integration or sharing of operational systems, airport infrastructure (including staff or check-in counters), or any essential assets for conducting business.

Furthermore, Azul argued that the agreement does not include joint pricing arrangements. “The parties do not exchange any pricing or operational information that could lead to any coordination between their activities,” the company said.

Eric Hadmann Jasper, an attorney and professor of economic law, said it is “natural” for Gol and Azul to frame their codeshare agreement within precedents that do not treat such arrangements as associative contracts.

He added that CADE could, in principle, fine the airlines. “However, there have been cases where CADE found that a transaction should have been notified but refrained from applying a fine, citing unclear precedents and regulations,” Mr. Jasper noted.

In a recent interview with Valor, CADE President Gustavo Augusto pointed to the codeshare agreement as one of the Tribunal’s top cases for the second half of the year.

“I expect the Tribunal will address these issues in the coming semester, and even if we find no infraction, we may still require that the codeshare be formally notified and reviewed. Depending on the Tribunal’s decision, it could also influence the direction of the proposed merger,” he said.