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united continental takes 5% stake in brazilian airline azul for $100 million
United Continental Holdings Inc., looking for ways to fill a hole in its Latin American network, said Friday that it will invest $100 million for a 5% stake in Azul Linhas Aereas Brasileiras SA, Brazil’s third-largest airline.United Continental Takes 5% ($100Million) Stake in Brazilian Airline Azul
David Neeleman, founder of Azul Linhas Aereas Brasileiras, speaks at a news conference in Lisbon, Portugal, Wednesday. ENLARGE
David Neeleman, founder of Azul Linhas Aereas Brasileiras, speaks at a news conference in Lisbon, Portugal, Wednesday. PHOTO: BLOOMBERG NEWS
The deal will give United a seat on the board of the discount carrier, which serves the most destinations in the country—105—and operates more than 900 daily flights. The company carried 21 million passengers last year and has a fleet of 145 aircraft.
The agreement also paves the way for an enhanced code-share agreement, subject to government approvals, expanding connecting opportunities between North and South American cities and joint loyalty-program participation.
Azul, which began flying in late 2008, was founded by David Neeleman, a serial airline entrepreneur who has started four low-cost carriers. The third, and his best known, is JetBlue Airways Corp. in the U.S., which started flying in 2000. JetBlue forced out Mr. Neeleman in 2007 and the executive, who has U.S. and Brazilian citizenship, headed south. He started Azul on a similar footing: generous legroom, in-flight entertainment, complimentary beverages and snacks, and low fares. The Azul chief executive holds a 67% stake in the company.
Azul, which has its main base in Campinas, about 50 minutes from downtown São Paulo, got a boost in 2012 when it acquired another Brazilian discounter, Trip. Azul also operates more than 50 daily flights from São Paulo’s Guarulhos International Airport, an airport United serves from the U.S.
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“This will be good for our clients,” Mr. Neeleman said at a news conference Friday in São Paulo. “With this partnership, they’ll be able to go from Santos Dumont Airport [in Rio de Janeiro] or from Porto Alegre to Las Vegas, for example.” He declined to say how Azul will use the proceeds.
Brazil’s two largest airlines already have relationships in the U.S. Tam, the biggest, which is part of Latam Airlines Group SA, is tied to American Airlines Group Inc. as a member of American’s Oneworld global alliance. Before joining Latam Airlines Group, Tam was a member of the Star Alliance, the marketing group anchored by United. So when Tam left that club, United had a hole in its network.
No. 2, Gol Linhas Aereas Inteligentes SA, teamed up with Delta Air Lines Inc. in late 2011, when the U.S. carrier paid $100 million for a 3% stake in Gol as part of a broad alliance. Delta also got a seat on Gol’s board.
Avianca Holdings SA, a Colombian carrier with satellite branches in Peru, Ecuador, Brazil and Central America, is a member of Star Alliance, But Avianca Brazil is a relatively small operation, the country’s No. 4 airline with seven million passengers carried last year, according to research firm Centre for Aviation. Azul isn’t affiliated with any global marketing alliances, and at this time has no plans to join Star, Mr. Neeleman said.
“Brazil is an important market in United’s global route network,” Jim Compton, United’s vice chairman and chief revenue officer, said at the news briefing Friday. “This partnership with Azul strengthens our presence in the country.” Barclays served as United’s financial adviser on the deal.
United flies to both São Paulo and Rio de Janeiro, operating five daily flights to Brazil from its hubs in Chicago, Houston, Newark, N.J., and Washington’s Dulles International Airport. With government approval, United intends to place its code on Azul flights from Guarulhos Airport to destinations throughout Brazil, and on Azul’s flights to Florida.
With government approval, Azul plans to place its code on United flights throughout North America and the Caribbean. “Brazilians will have access to destinations in United’s world-wide route network, Mr. Neeleman said, “while U.S. customers will be able to fly conveniently to famous destinations in Brazil, such as Belo Horizone, Iguazu Falls and the Amazon.”
MileagePlus and TudoAzul frequent-flier members will have reciprocal benefits to earn and redeem miles systemwide on both airlines.
Azul has several times made plans for an initial public offering and then pulled back. Mr. Neeleman on Friday said IPO plans remain in place but depend on improvement of capital-market conditions in Brazil. He didn’t provide a timetable. The Brazilian air market, once red-hot, has cooled considerably due to the nation’s recent economic problems, with domestic demand ebbing and fares showing weakness.
The carrier late last year spread its wings abroad by starting flights from Campinas to Orlando and Fort Lauderdale, Fla. It plans to add flights to Orlando from Belo Horizonte late this year.
Mr. Neeleman and a Portuguese partner earlier this month won approval to acquire 61% of recently privatized TAP Portugal, that nation’s money-losing flag carrier, for €354 million ($396.7 million). A planned cash injection is also in the cards along with a ramping up of TAP flights to the U.S. and Brazil. TAP, also a member of Star Alliance, is the leader in seats offered between Western Europe and Brazil, followed by TAM, according to Centre for Aviation.
Mr. Neeleman said the TAP transaction is separate from the United partnership.
—Rogerio Jelmayer contributed to this article.
Write to Susan Carey at [email protected]
United Airlines will spend $100 million to acquire a 5% stake in Azul Brazilian Airlines, and the two carriers have entered into a strategic partnership that will include codesharing and reciprocal loyalty program benefits.
Subject to government approval, United plans to place its code on Azul flights from São Paulo Guarulhos “to key destinations throughout Brazil,” United and Azul said in a joint statement. It will also place its code on Azul’s Airbus A330 flights from São Paulo Campinas to Fort Lauderdale, Florida. Azul will place its code on “United routes throughout North America and the Caribbean,” according to the carriers. United currently operates daily flights to Brazil from Chicago O’Hare, Houston Intercontinental, Newark and Washington Dulles.
The announcement comes the same week Star Alliance, of which United is a founding member, confirmed that Avianca Brazil will join Star on July 22. Star CEO Mark Schwab said the alliance is “talking to a second carrier in Brazil” about joining and Azul would appear to be a prime candidate, particularly now that United has taken an ownership stake in the carrier.
“Brazil is an important market in United’s global route network and this partnership with Azul further strengthens our ties to the region,” United vice chairman and chief revenue officer Jim Compton said.
Azul CEO David Neeleman added, “Through this partnership, Brazilians will have access to destinations in United’s worldwide route network, while US customers will be able to fly conveniently to famous destinations in Brazil such as Belo Horizonte, Iguazu Falls and the Amazon.”
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united continental takes 5% stake in brazilian airline azul for $100 million
United Continental Holdings Inc., looking for ways to fill a hole in its Latin American network, said Friday that it will invest $100 million for a 5% stake in Azul Linhas Aereas Brasileiras SA, Brazil’s third-largest airline.United Continental Takes 5% ($100Million) Stake in Brazilian Airline Azul
David Neeleman, founder of Azul Linhas Aereas Brasileiras, speaks at a news conference in Lisbon, Portugal, Wednesday. ENLARGE
David Neeleman, founder of Azul Linhas Aereas Brasileiras, speaks at a news conference in Lisbon, Portugal, Wednesday. PHOTO: BLOOMBERG NEWS
The deal will give United a seat on the board of the discount carrier, which serves the most destinations in the country—105—and operates more than 900 daily flights. The company carried 21 million passengers last year and has a fleet of 145 aircraft.
The agreement also paves the way for an enhanced code-share agreement, subject to government approvals, expanding connecting opportunities between North and South American cities and joint loyalty-program participation.
Azul, which began flying in late 2008, was founded by David Neeleman, a serial airline entrepreneur who has started four low-cost carriers. The third, and his best known, is JetBlue Airways Corp. in the U.S., which started flying in 2000. JetBlue forced out Mr. Neeleman in 2007 and the executive, who has U.S. and Brazilian citizenship, headed south. He started Azul on a similar footing: generous legroom, in-flight entertainment, complimentary beverages and snacks, and low fares. The Azul chief executive holds a 67% stake in the company.
Azul, which has its main base in Campinas, about 50 minutes from downtown São Paulo, got a boost in 2012 when it acquired another Brazilian discounter, Trip. Azul also operates more than 50 daily flights from São Paulo’s Guarulhos International Airport, an airport United serves from the U.S.
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“This will be good for our clients,” Mr. Neeleman said at a news conference Friday in São Paulo. “With this partnership, they’ll be able to go from Santos Dumont Airport [in Rio de Janeiro] or from Porto Alegre to Las Vegas, for example.” He declined to say how Azul will use the proceeds.
Brazil’s two largest airlines already have relationships in the U.S. Tam, the biggest, which is part of Latam Airlines Group SA, is tied to American Airlines Group Inc. as a member of American’s Oneworld global alliance. Before joining Latam Airlines Group, Tam was a member of the Star Alliance, the marketing group anchored by United. So when Tam left that club, United had a hole in its network.
No. 2, Gol Linhas Aereas Inteligentes SA, teamed up with Delta Air Lines Inc. in late 2011, when the U.S. carrier paid $100 million for a 3% stake in Gol as part of a broad alliance. Delta also got a seat on Gol’s board.
Avianca Holdings SA, a Colombian carrier with satellite branches in Peru, Ecuador, Brazil and Central America, is a member of Star Alliance, But Avianca Brazil is a relatively small operation, the country’s No. 4 airline with seven million passengers carried last year, according to research firm Centre for Aviation. Azul isn’t affiliated with any global marketing alliances, and at this time has no plans to join Star, Mr. Neeleman said.
“Brazil is an important market in United’s global route network,” Jim Compton, United’s vice chairman and chief revenue officer, said at the news briefing Friday. “This partnership with Azul strengthens our presence in the country.” Barclays served as United’s financial adviser on the deal.
United flies to both São Paulo and Rio de Janeiro, operating five daily flights to Brazil from its hubs in Chicago, Houston, Newark, N.J., and Washington’s Dulles International Airport. With government approval, United intends to place its code on Azul flights from Guarulhos Airport to destinations throughout Brazil, and on Azul’s flights to Florida.
With government approval, Azul plans to place its code on United flights throughout North America and the Caribbean. “Brazilians will have access to destinations in United’s world-wide route network, Mr. Neeleman said, “while U.S. customers will be able to fly conveniently to famous destinations in Brazil, such as Belo Horizone, Iguazu Falls and the Amazon.”
MileagePlus and TudoAzul frequent-flier members will have reciprocal benefits to earn and redeem miles systemwide on both airlines.
Azul has several times made plans for an initial public offering and then pulled back. Mr. Neeleman on Friday said IPO plans remain in place but depend on improvement of capital-market conditions in Brazil. He didn’t provide a timetable. The Brazilian air market, once red-hot, has cooled considerably due to the nation’s recent economic problems, with domestic demand ebbing and fares showing weakness.
The carrier late last year spread its wings abroad by starting flights from Campinas to Orlando and Fort Lauderdale, Fla. It plans to add flights to Orlando from Belo Horizonte late this year.
Mr. Neeleman and a Portuguese partner earlier this month won approval to acquire 61% of recently privatized TAP Portugal, that nation’s money-losing flag carrier, for €354 million ($396.7 million). A planned cash injection is also in the cards along with a ramping up of TAP flights to the U.S. and Brazil. TAP, also a member of Star Alliance, is the leader in seats offered between Western Europe and Brazil, followed by TAM, according to Centre for Aviation.
Mr. Neeleman said the TAP transaction is separate from the United partnership.
—Rogerio Jelmayer contributed to this article.
Write to Susan Carey at [email protected]
United Airlines will spend $100 million to acquire a 5% stake in Azul Brazilian Airlines, and the two carriers have entered into a strategic partnership that will include codesharing and reciprocal loyalty program benefits.
Subject to government approval, United plans to place its code on Azul flights from São Paulo Guarulhos “to key destinations throughout Brazil,” United and Azul said in a joint statement. It will also place its code on Azul’s Airbus A330 flights from São Paulo Campinas to Fort Lauderdale, Florida. Azul will place its code on “United routes throughout North America and the Caribbean,” according to the carriers. United currently operates daily flights to Brazil from Chicago O’Hare, Houston Intercontinental, Newark and Washington Dulles.
The announcement comes the same week Star Alliance, of which United is a founding member, confirmed that Avianca Brazil will join Star on July 22. Star CEO Mark Schwab said the alliance is “talking to a second carrier in Brazil” about joining and Azul would appear to be a prime candidate, particularly now that United has taken an ownership stake in the carrier.
“Brazil is an important market in United’s global route network and this partnership with Azul further strengthens our ties to the region,” United vice chairman and chief revenue officer Jim Compton said.
Azul CEO David Neeleman added, “Through this partnership, Brazilians will have access to destinations in United’s worldwide route network, while US customers will be able to fly conveniently to famous destinations in Brazil such as Belo Horizonte, Iguazu Falls and the Amazon.”
[/vc_column_text][/vc_column][/vc_row]
The information on this page may have been provided by a contributor and no guarantees can be made about the accuracy of any content. Contributors must obtain all necessary licenses and/or ownership rights from the relevant content owner(s) before submitting the same for publication. AIRLINE PARTNERSHIP disclaims all liability arising from the publication of content received from contributors. Please refer to our Disclaimer for more details.
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united continental takes 5% stake in brazilian airline azul for $100 million
United Continental Holdings Inc., looking for ways to fill a hole in its Latin American network, said Friday that it will invest $100 million for a 5% stake in Azul Linhas Aereas Brasileiras SA, Brazil’s third-largest airline.United Continental Takes 5% ($100Million) Stake in Brazilian Airline Azul
David Neeleman, founder of Azul Linhas Aereas Brasileiras, speaks at a news conference in Lisbon, Portugal, Wednesday. ENLARGE
David Neeleman, founder of Azul Linhas Aereas Brasileiras, speaks at a news conference in Lisbon, Portugal, Wednesday. PHOTO: BLOOMBERG NEWS
The deal will give United a seat on the board of the discount carrier, which serves the most destinations in the country—105—and operates more than 900 daily flights. The company carried 21 million passengers last year and has a fleet of 145 aircraft.
The agreement also paves the way for an enhanced code-share agreement, subject to government approvals, expanding connecting opportunities between North and South American cities and joint loyalty-program participation.
Azul, which began flying in late 2008, was founded by David Neeleman, a serial airline entrepreneur who has started four low-cost carriers. The third, and his best known, is JetBlue Airways Corp. in the U.S., which started flying in 2000. JetBlue forced out Mr. Neeleman in 2007 and the executive, who has U.S. and Brazilian citizenship, headed south. He started Azul on a similar footing: generous legroom, in-flight entertainment, complimentary beverages and snacks, and low fares. The Azul chief executive holds a 67% stake in the company.
Azul, which has its main base in Campinas, about 50 minutes from downtown São Paulo, got a boost in 2012 when it acquired another Brazilian discounter, Trip. Azul also operates more than 50 daily flights from São Paulo’s Guarulhos International Airport, an airport United serves from the U.S.
Advertisement
“This will be good for our clients,” Mr. Neeleman said at a news conference Friday in São Paulo. “With this partnership, they’ll be able to go from Santos Dumont Airport [in Rio de Janeiro] or from Porto Alegre to Las Vegas, for example.” He declined to say how Azul will use the proceeds.
Brazil’s two largest airlines already have relationships in the U.S. Tam, the biggest, which is part of Latam Airlines Group SA, is tied to American Airlines Group Inc. as a member of American’s Oneworld global alliance. Before joining Latam Airlines Group, Tam was a member of the Star Alliance, the marketing group anchored by United. So when Tam left that club, United had a hole in its network.
No. 2, Gol Linhas Aereas Inteligentes SA, teamed up with Delta Air Lines Inc. in late 2011, when the U.S. carrier paid $100 million for a 3% stake in Gol as part of a broad alliance. Delta also got a seat on Gol’s board.
Avianca Holdings SA, a Colombian carrier with satellite branches in Peru, Ecuador, Brazil and Central America, is a member of Star Alliance, But Avianca Brazil is a relatively small operation, the country’s No. 4 airline with seven million passengers carried last year, according to research firm Centre for Aviation. Azul isn’t affiliated with any global marketing alliances, and at this time has no plans to join Star, Mr. Neeleman said.
“Brazil is an important market in United’s global route network,” Jim Compton, United’s vice chairman and chief revenue officer, said at the news briefing Friday. “This partnership with Azul strengthens our presence in the country.” Barclays served as United’s financial adviser on the deal.
United flies to both São Paulo and Rio de Janeiro, operating five daily flights to Brazil from its hubs in Chicago, Houston, Newark, N.J., and Washington’s Dulles International Airport. With government approval, United intends to place its code on Azul flights from Guarulhos Airport to destinations throughout Brazil, and on Azul’s flights to Florida.
With government approval, Azul plans to place its code on United flights throughout North America and the Caribbean. “Brazilians will have access to destinations in United’s world-wide route network, Mr. Neeleman said, “while U.S. customers will be able to fly conveniently to famous destinations in Brazil, such as Belo Horizone, Iguazu Falls and the Amazon.”
MileagePlus and TudoAzul frequent-flier members will have reciprocal benefits to earn and redeem miles systemwide on both airlines.
Azul has several times made plans for an initial public offering and then pulled back. Mr. Neeleman on Friday said IPO plans remain in place but depend on improvement of capital-market conditions in Brazil. He didn’t provide a timetable. The Brazilian air market, once red-hot, has cooled considerably due to the nation’s recent economic problems, with domestic demand ebbing and fares showing weakness.
The carrier late last year spread its wings abroad by starting flights from Campinas to Orlando and Fort Lauderdale, Fla. It plans to add flights to Orlando from Belo Horizonte late this year.
Mr. Neeleman and a Portuguese partner earlier this month won approval to acquire 61% of recently privatized TAP Portugal, that nation’s money-losing flag carrier, for €354 million ($396.7 million). A planned cash injection is also in the cards along with a ramping up of TAP flights to the U.S. and Brazil. TAP, also a member of Star Alliance, is the leader in seats offered between Western Europe and Brazil, followed by TAM, according to Centre for Aviation.
Mr. Neeleman said the TAP transaction is separate from the United partnership.
—Rogerio Jelmayer contributed to this article.
Write to Susan Carey at [email protected]
United Airlines will spend $100 million to acquire a 5% stake in Azul Brazilian Airlines, and the two carriers have entered into a strategic partnership that will include codesharing and reciprocal loyalty program benefits.
Subject to government approval, United plans to place its code on Azul flights from São Paulo Guarulhos “to key destinations throughout Brazil,” United and Azul said in a joint statement. It will also place its code on Azul’s Airbus A330 flights from São Paulo Campinas to Fort Lauderdale, Florida. Azul will place its code on “United routes throughout North America and the Caribbean,” according to the carriers. United currently operates daily flights to Brazil from Chicago O’Hare, Houston Intercontinental, Newark and Washington Dulles.
The announcement comes the same week Star Alliance, of which United is a founding member, confirmed that Avianca Brazil will join Star on July 22. Star CEO Mark Schwab said the alliance is “talking to a second carrier in Brazil” about joining and Azul would appear to be a prime candidate, particularly now that United has taken an ownership stake in the carrier.
“Brazil is an important market in United’s global route network and this partnership with Azul further strengthens our ties to the region,” United vice chairman and chief revenue officer Jim Compton said.
Azul CEO David Neeleman added, “Through this partnership, Brazilians will have access to destinations in United’s worldwide route network, while US customers will be able to fly conveniently to famous destinations in Brazil such as Belo Horizonte, Iguazu Falls and the Amazon.”
[/vc_column_text][/vc_column][/vc_row]
The information on this page may have been provided by a contributor and no guarantees can be made about the accuracy of any content. Contributors must obtain all necessary licenses and/or ownership rights from the relevant content owner(s) before submitting the same for publication. AIRLINE PARTNERSHIP disclaims all liability arising from the publication of content received from contributors. Please refer to our Disclaimer for more details.