United, American Airlines both back Azul restructuring, eyeing Brazil market

May 29 (Reuters) - United Airlines UAL.O and American Airlines AAL.O may be fierce rivals in the U.S. market, but they have agreed to jointly support Azul AZUL4.SA as the Brazilian carrier filed for bankruptcy protection earlier this week.

The move comes as the major U.S. airlines look to boost connections in Latin America's largest country. American's backing of Azul is notable given its own ties to its local rival Gol GOLL4.SA, now emerging from its own Chapter 11 proceedings.

The U.S. companies are set to invest up to $300 million in an equity offering to repay Azul's debtor-in-possession financing when it emerges from bankruptcy, according to a securities filing released by the Brazilian firm.

"They believe in the long-term viability of Azul, in our network strategy and in what we have built," Azul Chief Executive John Rodgerson told Reuters. "Brazil is going to be really important to United and American."

Both airlines are expected to have codeshare agreements with Azul and be on the Brazilian airline's board of directors when it emerges from Chapter 11.

Azul filed for bankruptcy protection in the United States on Wednesday, following similar moves by Gol and LATAM Airlines LTM.SN, after months trying to restructure mostly pandemic-era debt.

Rodgerson noted that although both United and American have "great franchises" in Latin America, their routes connect Brazil to different U.S. cities.

While United flies from Sao Paulo to Chicago, Houston, Newark and Washington, American's flights are bound to Dallas, Miami and New York's JFK Airport.

United has been an Azul shareholder since 2015, when it bought a stake in the firm as a strategy to catch up with U.S. rivals with a firmer foothold in South America's biggest air travel market at the time.

United's Chief Commercial Officer, Andrew Nocella, said in a statement the fresh deal would be an opportunity to expand its business with Azul.

American is a long-time partner of Brazilian carrier Gol, which holds around 30% of Brazil's domestic market share - roughly level with Azul.

While Gol focuses on big cities such as Sao Paulo, Rio de Janeiro and Brasilia, Azul serves far more destinations.

American Airlines Chief Strategy Officer Stephen Johnson said in a statement that Gol remained a key partner, while praising Azul's plans as "extremely positive for the Brazilian aviation market."