Azul Brazilian Airlines, a wholly-owned subsidiary of Azul, and Two Taxi Aereo (TwoFlex) have signed a binding offer for Azul to acquire the Brazilian regional carrier TwoFlex for R$123 million.

TwoFlex offers regular passenger and cargo service to 39 destinations in Brazil, of which only three regional destinations are currently being served by Azul.

The airline also holds 14 daily departure and arrival slots on the auxiliary runway of Congonhas, São Paulo’s downtown airport. Its fleet is composed of 17 owned Cessna Caravan aircraft, a regional turboprop with a capacity of nine passengers.

“Over the past 10 years, Azul has led the development of regional aviation in Brazil by serving more than 100 domestic destinations and bringing new service to more than 50.

Our goal is to continue bringing critical air service to new and diverse parts of Brazil, and TwoFlex will be the perfect way to reach these cities and communities.

This acquisition will help Azul in giving these customers access to the largest domestic network in Latin America and further grow the Brazilian aviation market.

TwoFlex’s cargo operation will also be a strategic addition to AzulCargo as we look to continuously invest in this logistics platform,” said Azul’s CEO, John Rodgerson.

“We have built a great feeder business over the past few years connecting smaller cities to large capitals throughout the country. I look forward to connecting our regional network to Azul’s domestic and international network” said CEO of TwoFlex, Rui Aquino.

The offer remains subject to conditions such as completion of due diligence, negotiation of a purchase agreement, and regulatory approvals.

The news comes as Azul reported its preliminary traffic results for December 2019, which showed consolidated passenger traffic (RPKs) increased 27.2 per cent compared to December 2018 on a capacity increase (ASKs) of 26.5 per cent.

This resulted in a load factor of 83.5 per cent – 0.5 per cent points higher than the same period in 2018. The domestic load factor was 82.3 per cent and the international load factor was 86.9 per cent.

For the full year of 2019, the total load factor was 83.5 per cent, an increase of 1.2 per cent compared to 2018.

Azul had also merged with Trip over four years ago to create the third largest airline in Brazil.