United Airlines Buys Azul Airline Stake
United Airlines has expanded its presence in Brazil by entering a long-term partnership with Brazilian carrier Azul, according to their latest press statement. The said partnership between the two carriers will see United Airlines acquiring an approximate 5% “economic stake” in Azul Brazilian Airlines. The investment will reportedly cost about $100 million and it will give United Airline’s one seat on Azul’s board of directors.
This strategic partnership between the two airlines is significant for the travel industry as it means that more flights and connections between various destinations in Brazil and in the United States will be available. Moreover, this would also mean that passengers can expect to experience an improved transfer process at Sao Paolo’s Guarulhos International Airport for themselves and their luggage.
Although subject to government approval, United hopes that it will also be able do code-sharing on flights taking passengers to key destinations in Brazil while Azul plans to code-share with United Airlines on flight routes throughout North America and the Caribbean. As United Airline’s Vice Chairman and Chief Revenue Officer Jim Compton explains, “Brazil is an important market in United’s global route network and this partnership with Azul further strengthens our ties to the region. Together we will offer our mutual customers more choice and convenience when traveling to and from destinations across Brazil.”
Meanwhile, Azul Airlines CEO and founder David Neeleman also says, “This will be great for customers. 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.”
Aside from benefiting from more flights to and from Brazil and the U.S., passengers will also be happy to know that the partnership will also result in an expansion of both of the airline’s loyalty programs. Members of United Airline’s MileagePlus and Azul’s TudoAzul will be able to enjoy reciprocal benefits in which they are able to earn and redeem flight miles with both airlines. As Azul’s David Neeleman explains, “It is important to highlight that customers will be able to use their TudoAzul points to fly to any destination served by United worldwide.”
STLtoday reports that Azul is Brazil’s third largest airline, following Gol Linhas Aereas Inteligentes SA and the TAM division of Latam Airlines Group SA who are second and first, respectively. Moreover, Azul says that they currently hold a 32% share of the Brazilian aviation market, reportedly transporting 21 million passengers in 2014. Moreover, its fleet of 145 aircraft takes on 900 flights daily to more than 100 destinations. Azul Airlines has also been recently named the “Best low-cost airline in South America” by Skytrax World Airline Awards for the fifth year in a row. Moreover, it was also named the “Airline with best on-time performance in South America” by FlightStats as well as the “Best low-cost carrier in the world” by the Centre of Aviation (CAPA) last year.
Meanwhile, United Airlines (with United Express) operates almost 5,000 flights a day on average. It carries passengers from about 373 airports all over the world. Last year, United Airlines and United Express serviced a combined total of 138 million customers across nearly two million flights. Currently, United services five flights daily to Brazil from Chicago, Houston, New York/Newark and Washington/Dulles.