“Today is an important step forward in our partnership with United Airlines,” Azul CEO John Rodgerson said.
The deal builds on United’s 2015 investment in the airline, and sets the table for greater cooperation.
United EVP & CFO Andrew Levy said the company continues “to look for new ways to provide more connectivity for our customers. Following our initial investment in 2015, connecting traffic between our airlines is at an all-time high, significantly benefiting our customers traveling between the US and Brazil.”
The deal comes weeks after Brazil’s government approved an Open Skies deal negotiated between the two countries in 2010. Ratification was required by US regulators as part of a proposed tie-up between Dallas/Fort Worth-based American Airlines and Santiago-based LATAM Airlines.
The Open Skies agreement is expected to jump-start connections between the two countries and their carriers. Azul executives have said they are interested in forging closer ties with United—including a possible joint venture (JV).
“The next step for us is to get together with our partners United and start talking JV,” Azul chief revenue officer Abhi Shah said on an early March earnings call. “We have had some initial discussions, and so now we need to accelerate that and put together a commercial deal that we can submit to” regulators.
Hainan Airlines in August 2016 purchased a 23.7% stake in Azul with a $450 million investment, and held 21.6% before the most recent transaction. Following the sale, Hainan said its stake in Azul will be down to 17.3%.
Hainan parent HNA Group has been selling assets to help reduce mounting debt.