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United Continental Arm Inks Deal to Boost Latin American Base

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United Continental Holdings’ (UAL - Free Report) wholly owned subsidiary United Airlines recently reached a joint business agreement (JBA) with Copa Holdings (CPA - Free Report) and Avianca (including several of its affiliates). The JBA, on approval from the government, is anticipated to facilitate travel experience between the United States and 19 countries in Central and South America.

The joint venture will not only allow the carriers to share revenues on the flights coordinated but also offer competitive fares to customers. As far as passengers are concerned, they will enjoy a smooth connectivity to Latin America with new nonstop routes and ramped up services on the existing ones apart from reduced journey hours.

With this JBA, United Airlines will be able to align its frequent flyer program with the two other Star Alliance members in a better way besides improving airport services.

This move by United Airlines is noteworthy as it tries to extend foothold in the growing Latin American economy with high travel demand. In fact, the carrier is looking to add Brazil to this proposed partnership. Notably, United Airlines holds an 8% stake in the Brazilian carrier Azul (AZUL - Free Report) .

Zacks Rank & Key Pick

United Continental carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Air France-KLM (AFLYY - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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