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United Airlines to Invest in Azul Brazilian Airlines as Part of Long-Term Strategic Partnership.

M2 EQUITYBITES-June 30, 2015-United Airlines to Invest in Azul Brazilian Airlines as Part of Long-Term Strategic Partnership


30 June 2015 - US-based carrier United Airlines and Brazil-based Azul Brazilian Airlines have forged a new strategic partnership in which United will acquire an approximate 5% stake in Azul, the companies said.

Azul is Brazil's third-largest airline.

The deal paves the way for the carriers to cooperate on a range of customer benefits including codesharing of flights (subject to government approval), expanded connection opportunities on routes between the United States and Brazil, in addition to other points in North and South America, and joint loyalty-program participation.

Through a wholly owned subsidiary, United will invest USD 100m for its economic stake in Azul, which includes one seat on Azul's board of directors.

Azul serves more destinations in Brazil than any other Brazilian carrier, including more than 50 daily flights from Sao Paulo's Guarulhos International Airport.

This new partnership will offer customers more flight choices and convenient connections for travel between the United States and destinations in Brazil.

In addition, the partnership will enable United and Azul to provide an improved transfer process at Guarulhos for timely connections for customers and their baggage.

The airlines announced plans for United to place its code on flights in Azul's extensive network from Guarulhos to key destinations throughout Brazil, as well as on Azul's flights to Florida; Azul plans to place its code on United routes throughout North America and the Caribbean, pending government approval.

As a result of the partnership, United and Azul will expand their frequent flyer loyalty agreement.

MileagePlus and TudoAzul members will have reciprocal benefits to earn and redeem miles systemwide on both airlines.

United began serving Brazil in 1992, with flights to both Rio de Janeiro and Sao Paulo. The airline currently operates five daily flights to Brazil from its Chicago, Houston, New York/Newark and Washington/Dulles hubs.

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Publication:M2 EquityBites (EQB)
Geographic Code:3BRAZ
Date:Jun 30, 2015
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