United Airlines (UAL.N) has announced it expects to record a USD 105m charge related to an expected non-cash impairment associated with its Brazil routes, the company said.
The statement follows the determination that its Brazil routes have been impaired under the Open Skies agreement between Brazil and the US, the company said.
In May 2018, the Brazil–United States open skies agreement was ratified, which provides air carriers with unrestricted access between the United States and Brazil. United said the value of its Brazil routes were impaired because the agreement removes reciprocity requirements for flights between the two countries, and does not reflect any decline in passenger traffic.
The company said it determined that the approval of the open skies agreement impaired the entire value of its Brazil route authorities because the agreement removes all limitations or reciprocity requirements for flights between the United States and Brazil. United said it expects to record this special charge to write off the entire value of the intangible asset associated with its Brazil routes.
United Airlines, Inc. is a major United States airline headquartered in Chicago, Illinois.