SAO PAULO: United Airlines has agreed to pay $100 million for a 5 percent stake in Azul SA, Brazil’s third-biggest airline, as it attempts to catch up with US rivals with more established ties in South America’s biggest air travel market.

Azul’s founder and chief executive, David Neeleman, who also founded JetBlue Airways Corp., announced the deal on Friday. The division of United Continental Holdings Inc. will name a representative to Azul’s board and the two airlines have struck a codesharing agreement.

The investment should ease the urgency of an initial public offering by Azul, which has failed at several attempts to list since 2012 as Brazil’s slumping economy unnerved investors.

Neeleman, who also acquired a 61 percent stake in Portuguese carrier TAP this month, said Azul still planned to list shares “when the outlook improves.”

The United investment will be made in the form of a capital injection, slightly diluting the stakes of Neeleman and Azul’s existing shareholders.

The partnership follows big strides in Brazil by United’s main rivals. Delta Air Lines Inc. bought a 3 percent stake in Brazil’s No.2 airline Gol Linhas Aereas Inteligentes SA for $100 million in 2011, when the Brazilian currency was 40 percent stronger.

Early last year, Brazil’s biggest airline, the TAM division of Chile’s Latam Airlines Group SA, left United’s Star Alliance to join the alliance of rival American Airlines Group Inc., OneWorld.

“Both United and Star Alliance need more presence in South America because of the region’s growing economies and to remain competitive (with OneWorld) serving corporate travelers,” said Henry Harteveldt, a founder of Atmosphere Research Group.

Barclays Plc is the financial advisEr to United Airlines.