United Airlines forges a new path in Brazil with Azul. What is in store for their partnership?

United Airlines' decision to take a USD100 million stake in Brazil's third largest airline Azul is a highly strategic move to entrench itself in the important Brazilian market and occurs after TAM's exit from the Star Alliance left a significant hole for United to fill in its Brazilian operations.

Through its stake in Azul, United also gains a seat on the Brazilian airline's board which, similar to the Delta-Gol tie-up, gives United insight into Azul's strategy and long term vision. In the short term, plans are underway for a codesharing pact following an interline agreement the two airlines struck in 2014.

The deal with Azul is a solid step forward for United in gaining some lost ground in Brazil; but it will still not completely fill the void created after TAM's departure from Star. United and Azul may also need to revisit their joint strategy in serving the US and Brazil in light of their new partnership, and the upcoming implementation of open skies between the two countries.