United ties up with Azul

[typhoonpilot]

United and Azul forge new partnership
By: Edward Russell
Washington DC
Source:
26 Jun 2015
United Airlines plans to invest about $100 million in Azul, creating the foundation for a new strategic partnership between the carriers.

Chicago-based United will take a 5% stake in the Brazilian carrier, which it plans to forge a deep codeshare and frequent flier alliance with, they say in a joint announcement today. The deal is subject to regulatory and board approval.

“Brazil is an important market in United’s global route network and this partnership with Azul further strengthens our ties to the region,” says Jim Compton, vice-chairman and chief revenue officer of United, in a statement.

David Neeleman, founder and chief executive of Azul, adds: “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.”

Under the new agreement, United will initially place its code on Azul’s flights in Brazil from Sao Paulo Guarulhos International airport as well as on its flights to Florida from 1 October. Azul will place its code on United flights throughout North America and the Caribbean.

The codeshare will build on the interline agreement that Azul and United signed in January 2014.

Asked whether the carriers plan to form an immunised joint venture between Brazil and the USA once open-skies is implemented on 1 October, United says they will “explore” the possibility once the open-skies regime is in place.

Azul and United may offer their customers additional connecting points in the near future. The Brazilian carrier has plans to add New York City service in the future and could consider using Newark Liberty International airport – a major United hub – as its gateway to the region.

In addition, United asked the US Department of Transportation on 22 June to allow it to delay the use of seven US-Brazil frequencies that it holds to “examine market opportunities”. United could use these frequencies to launch service from one of its hubs – Houston Intercontinental is its primary gateway to Latin America – to Azul’s main hub at Viracopos Campinas International airport before open skies is fully implemented.

United says that it has immediate plans to change its schedules to Brazil. It serves Rio de Janeiro Galeao from Houston and Sao Paulo Guarulhos from Chicago O'Hare, Houston, Newark and Washington Dulles.

Azul and United will also offer their frequent fliers reciprocal earning and redemption benefits under their new partnership.

The news of the partnership comes a day after Star Alliance chief Mark Schwab said that the alliance was “in discussions with a second airline in Brazil” – widely understood to be Azul – regarding membership.

United is a founding member of Star.

The partnership also fills the gap in United's global partner network left by TAM when it moved to the Oneworld Alliance from Star in March 2014.

United’s investment is not unprecedented. Delta Air Lines invested $100 million in Gol in 2011 and has since formed a close codeshare partnership with the carrier.

 

[kellwolf]

Huh. I know they had swapped starting service to JFK to add more to FLL and MCO. Now I'm betting JFK will never see Azul and they'll go into EWR instead. Also fits with United retreating from JFK to the Fortress over at EWR, too.

Maybe we WILL finally do JFK to Brazil on our own. Granted it'll probably be a year or two too late and in an A321LR instead of a A330.....

 

[Kingairer]

They had to backfill the void of TAM leaving the alliance.

 

[mikecweb]

100 mil for 5%??? Maybe i've been watching too much Shark Tank.

 

[Ecl!pse]

Smart move by United. Good complement to the network, especially after the TAM departure.

Huh. I know they had swapped starting service to JFK to add more to FLL and MCO. Now I'm betting JFK will never see Azul and they'll go into EWR instead. Also fits with United retreating from JFK to the Fortress over at EWR, too.

Maybe we WILL finally do JFK to Brazil on our own. Granted it'll probably be a year or two too late and in an A321LR instead of a A330.....

LR solves that conundrum by itself for you - doesn't have the legs for GIG/GRU, likely even from South Florida.

 

[kellwolf]

LR solves that conundrum by itself for you - doesn't have the legs for GIG/GRU, likely even from South Florida.

Actually, advertised range according to Airbus is 4,100 nm, which puts it in range for FLL-GRU. Basically, they say if the 757-200 can do it, the A321LR should. We'll see when it finally hits, though. They could always hit up a fuel stop in SJU or run it through Bogota. Seeing as the first ones won't see delivery until 2019, it's all academic anyway.

 

[Ecl!pse]

Actually, advertised range according to Airbus is 4,100 nm, which puts it in range for FLL-GRU. Basically, they say if the 757-200 can do it, the A321LR should. We'll see when it finally hits, though. They could always hit up a fuel stop in SJU or run it through Bogota. Seeing as the first ones won't see delivery until 2019, it's all academic anyway.

Hopefully the GRU flight is in still air, standard temperature, no reserves are needed, and there are no obstacles to clear at either airport