Markets
UAL

United Continental Arm Ups Azul Stake to 8%, Shares Up

United Continental Holdings, Inc .'s UAL wholly owned subsidiary, United Airlines, has increased its stake in the Brazilian carrier, Azul S.A. AZUL . Notably, United Airlines purchased shares of Azul from Hainan Airlines, a China-based carrier, thereby raising its stake to 8% from its previous 3.7% in the carrier. The move found favor with investors as the United Continental stock gained 1.9% on Apr 27 to $67.86.

Through this initiative, the carrier aims to offer its customers with more connectivity options between the United States and Brazil. Moreover, the former is a popular tourist destination for the citizens of the latter. The strategy is indicative of the carrier's initiatives to attract traffic to the location and thus generate revenues.

United Airlines made its first investment in the carrier in 2015. This Chicago-based carrier claims that traffic connecting the two countries has been at its peak ever since.

Under the current code share agreement between the two airlines, passengers of both carriers can connect at Fort Lauderdale, Orlando as well as Sao Paulo Guarulhos airports.

United Continental Holdings, Inc. Price

United Continental Holdings, Inc. Price | United Continental Holdings, Inc. Quote

The US airline industry has long been trying to tap the large Brazilian market. To this end, the Open Skies treaty was signed in 2011 to enhance travel between the two countries. However, there was a stiff opposition from the Brazilian airlines in the past as they feared competition from the US carriers.

Removing all uncertainties, Brazil's senate approved the treaty in March 2018. The agreement will be legalized once the Brazilian President endorses it.

With the approval of the Open Skies treaty, United Airlines and Azul will possibly proceed with their much-awaited joint venture . Also, LATAM Airlines Group S.A. LTM plans to collaborate with American Airlines Group Inc. AAL .

United Continental Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

United Continental Holdings, Inc. (UAL): Free Stock Analysis Report

American Airlines Group Inc. (AAL): Free Stock Analysis Report

LATAM Airlines Group S.A. (LTM): Free Stock Analysis Report

AZUL SA (AZUL): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

UAL LTM AZUL AAL

Other Topics

Stocks

Latest Markets Videos