UPDATE 2-United Airlines to pay $100 mln for Azul stake, for foothold in Brazil

viernes 26 de junio de 2015 15:14 GYT

(Adds United executive comments on partnership outlook, second byline)

By Priscila Jordão and Jeffrey Dastin

SAO PAULO/NEW YORK, June 26 (Reuters) - United Airlines has agreed to pay $100 million for a 5 percent stake in Azul SA, Brazil's third-biggest airline, as it attempts to catch up with U.S. rivals with more established ties in South America's biggest air travel market.

Azul's founder and chief executive, David Neeleman, who also founded JetBlue Airways Corp, announced the deal on Friday in Sao Paulo. United Continental Holdings Inc will name a representative to Azul's board, and the two airlines have struck a codesharing agreement subject to government approval.

For United, the deal will open more Brazilian cities to its customers. For Azul IPO-AZUL.N, the investment should ease the urgency of an initial public offering, which Azul has delayed several times since 2012 as Brazil's slumping economy unnerved investors.

Neeleman, who also acquired a 61 percent stake in Portuguese carrier TAP this month, said Azul still planned to list shares "when the outlook improves."

The United investment will be made in the form of a capital injection, slightly diluting the stakes of existing shareholders.

Airlines that operate across borders often seek antitrust immunity so they can coordinate ticket prices and schedules to ease customers' connections.

United views the tie-up as the start of a "long-term" relationship that could be strengthened further as opportunities arise, the airline's Chief Revenue Officer Jim Compton said in an interview.   Continuación...