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Avianca 'weeks' away from firming JV with United: CEO

Avianca says it is weeks away from finalising a planned joint venture with partner United Airlines, and expects to make an announcement by the end of 2017.

"We are working towards signing a final agreement with United in this calendar year," said Avianca chief executive Hernan Rincon during the airline's third quarter earnings call.

Rincon says the two airlines plan to seek anti-trust immunity from US regulators, a process that he believes could take up to a year.

The planned joint venture would also require approvals from the Latin American countries that Avianca operates in.

While there were indications previously that Avianca's sister carrier Avianca Brazil could be part of the joint venture, strategic vice-president Gerardo Grajales says that the lack of open skies between the US and Brazil will result in Brazil being a "non-starter".

Although Brazil and the US government have agreed to open-skies, the pact has yet to be ratified, pending approvals from Brazil's congress.

Grajales indicates that Avianca will rope Avianca Brazil into the joint venture once US-Brazil open skies are implemented.

Avianca Brazil is wholly owned by Synergy, the majority shareholder of Avianca. The two airlines are studying a merger, with Rincon saying that Avianca's board expects to decide on a potential merger in December or January.

The proposed United alliance and merger with Avianca Brazil have been opposed by Avianca's second biggest shareholder, Kingsland Holdings, which has sued to prevent the deal with United. Avianca subsequently countersued. A US court has yet to rule on that legal battle.

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