SAO PAULO (Reuters) – Brazilian airline Azul is expected to sign in the next few weeks a memorandum of understanding with rival carrier Gol of Abra’s parent company for a potential merger between Azul and Gol, the newspaper Valor Economico reported on Wednesday.

The memorandum will highlight the purpose of the merger while establishing details related to governance, capital structure and various structural options of the agreement, according to the report, citing sources involved in the talks.

Gol did not immediately respond to a request for comment, while Azul declined to comment.

Azul is in talks with Abra Group to “explore opportunities,” amid speculation about a potential tie-up with Gol. The two carriers announced a codeshare deal last May.

A key variable for the potential merger is the end of Gol’s Chapter 11 bankruptcy proceedings, Valor added, as it is expected in April.