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Avianca moves to year-end target for United deal

Avianca says it continues alliance talks with partner United Airlines, and is now hoping to ink a deal by the end of 2017.

"We aspire and hope to be able to close this negotiation this year," Avianca chief executive Hernan Rincon tells FlightGlobal, although he was quick to add that he could not "guarantee" that a deal would be reached by year end.

The year-end target is a deceleration from an earlier timeline indicated by Rincon and Avianca majority owner German Efromovich. In June, Rincon had said that Avianca's board could vote on a proposed deal in about eight to 10 weeks, while Efromovich said this could happen as soon as July.

Rincon says today that Avianca continues to meet with United on a weekly basis, and that Avianca still has "a lot of work to do".

The two airlines announced earlier this year that they plan to enter into a strategic alliance, offering few details. Rincon told FlightGlobal in June that the alliance will likely take the form of a joint venture and would include Avianca sister carrier Avianca Brazil, but stepped back from those remarks today.

"Avianca Brazil is not part of the negotiations," he says. "We have discussed that at the right time, we need to consider how to bring Avianca Brazil into the alliance."

Avianca is concurrently studying a merger with Avianca Brazil, which is managed separately and wholly owned by Efromovich.

Both the proposed United alliance and merger with Avianca Brazil have been criticised by Avianca's largest minority shareholder Kingsland Holdings. Kingsland has sued to stop the alliance between Avianca and United, and Avianca has countersued.

Both Avianca and Kingsland are scheduled for a court date in New York on 19 September, says Rincon.

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