JetBlue founder to start Brazilian airline
SAO PAULO, Brazil (AP) - March 27, 2008 JetBlue chairman David Neeleman said the opportunity is clear:
Latin America's largest nation has a growing passenger travel
market dominated by two airlines that face little domestic
competition and charge high prices.
"The prices that people pay here in Brazil are 50 percent
higher than the prices people pay in the United States."
Neeleman said his new venture has no connection to JetBlue
Airways Corp., but some former JetBlue executives will join the
venture. The new airline doesn't have a name yet, and will use
mid-size E-195 jets made by Brazil's Empresa Brasileira de
Aeronatica SA.
The new airline has placed an order for 36 of the 118-seat
planes with Embraer, a purchase Neeleman valued at $1.4 billion.
The carrier also has taken options for 40 more planes that would
give the overall deal a value of $3 billion.
The entry of the airline will bring the first serious
competition in years to Brazil's TAM Linhas Aereas SA and Gol
Linhas Aereas Inteligentes SA, two carriers that have dominated air
travel in Brazil since the collapse several years ago of Varig,
Brazil's former flagship carrier.
"Brazil is a country that needs more competition and a
different kind of competition," Neeleman said.
Neeleman also said he is discussing his future as chairman of
JetBlue with members of the New York-based carrier's board, and
suggested that a decision on his departure from the post could come
within several months.
"My attention needs to be here," he said at the Sao Paulo news
conference.
"We are not privy to conversations that the board members
have," said JetBlue spokesman Bryan Baldwin, who earlier said the
company was aware of no plans for a change in Neeleman's role as
chairman.
Baldwin declined further comment, and said chief executive Dave
Barger was unavailable for comment.
Neeleman said that he has raised $150 million for the venture so
far from investors in the United States and Brazil.
The JetBlue founder was born in Brazil and holds Brazilian
citizenship in addition to American citizenship. The fact that is
he Brazilian allows him to overcome a major hurdle for investors
trying to enter Brazil's passenger airline market: A law stating
that foreigners can hold no more than 20 percent of Brazilian
carriers.
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AP Business Writer John Wilen in New York contributed to this
story