United Airlines buys stake in Brazilian airline Azul

United Airlines on Friday said it bought a 5 percent stake in Brazil's third-largest airline for $100 million as a "strategic investment."

The stake in Azul Brazilian Airlines gives United another foothold in South America, paving the way for the carriers to cooperate on sharing flights, adding connections on routes between the U.S. and Brazil, and expanding their customer loyalty programs, the airlines said.

United's stake includes one seat on Azul's board.

"Brazil is an important market in United's global route network, and this partnership with Azul further strengthens our ties to the region," said Jim Compton, United's chief revenue officer.
 
"Together we will offer our mutual customers more choice and convenience when traveling to and from destinations across Brazil."

Azul, Portuguese for "blue," serves more destinations in Brazil than any other Brazilian carrier, which includes more than 50 daily flights from Sao Paulo's Guarulhos International Airport, according to a joint news release.

Azul was founded by its CEO David Neeleman, who also founded other low-cost airlines, including JetBlue Airways, from which he was ousted in 2007. Azul began operating in December 2008, and its flights offer free LiveTV at every seat and generous legroom compared with many U.S. airlines — a seat pitch of 30 inches or more, two-by-two seating and no middle seats, according to Azul's website.

"Through this partnership, Brazilians will have access to destinations in United's worldwide route network, while U.S. customers will be able to fly conveniently to famous destinations in Brazil such as Belo Horizonte, Iguazu Falls and the Amazon," Neeleman said in a statement.

The partnership will offer customers more flight choices and connections and enable United and Azul to improve the transfer process at Guarulhos for timely connections, the airlines said.

As a result of the partnership, United's MileagePlus and Azul's TudoAzul frequent-flier members will have reciprocal benefits to earn and redeem miles through both airlines.

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

This year, Azul was named by Skytrax World AirlineAwards as the best low-cost airline in South America for the fifth time in a row.

(Gregory Karp - Chicago Tribune)