Avianca Brasil in talks with United to deepen codeshare deal

NEW YORK (Reuters) - Avianca Brasil is in talks with United Continental Holdings Inc UAL.N to deepen their codeshare arrangement and hopes to eventually agree on a comprehensive joint venture deal, the Brazilian airline's chief executive said on Tuesday.

The talks are proceeding in parallel with partnership negotiations between United and listed Colombian airline Avianca Holdings Inc AVT_p.CN, which has the same owner as Avianca Brasil, CEO Frederico Pedreira said in an interview.

Synergy Group, the controlling shareholder of both South American carriers, wants to eventually merge them.

“We are currently working on expanding our codeshare agreements as well as other alternatives to enhance the collaboration between the two companies that will be announced when the time is right,” Pedreira said of United and Avianca Brasil.

Avianca Brasil, which like United is a member of the global Star Alliance, last year announced a preliminary deal under which U.S. ticket buyers could connect with its flights to smaller Brazilian cities such as Florianopolis and Fortaleza.

Pedreira said the carrier would like a deeper joint venture deal with United, subject to approval of an “open skies” agreement between Brazil and the United States. The accord was approved by Brazil’s lower house on Tuesday, but still needs Senate approval.

“Once you have a joint venture you can think of the two markets in a more wide sort of approach,” he said, adding that the carriers aimed to reach an agreement “in the next couple of months.”

Pedreira was in New York to launch Avianca Brasil’s first daily flight between New York and Sao Paulo, one of its handful of new international flights as it extends service beyond domestic Brazilian routes.

The proposed partnership between Avianca Holdings and United triggered a legal fight between Synergy and fellow Avianca shareholder Kingsland Holdings Ltd, which the two parties settled late last month.

Reporting by Christian Plumb; Editing by Richard Chang