JetBlue founder and Chairman David Neeleman has announced plans to start up his fourth airline, a domestic carrier in Brazil, pending local Government approvals. Mr. Neeleman, who was born in Brazil, has raised $150 million to finance the as-yet-unnamed carrier. The airline, to be based in Sao Paulo, plans to commence operations in early 2009 and, ultimately, will serve most major markets throughout Brazil with as many as 76 brand-new Embraer aircraft by 2013.
Mr. Neeleman, together with Frederico Curado, CEO of the Brazilian planemaker Embraer, announced that the company has placed an aircraft order comprising firm orders for 36 Embraer E-195 jets, with options for another 20 and purchase rights for a further 20. The firm orders are valued at $1.4 billion. The order, if all options and purchase rights are exercised, is valued at $3 billion.
Brazil has the second largest economy in the Americas — and 10th in the world — but only about 5 percent of Brazilians currently fly. Airfares are on average 50 percent higher than in the United States on flights of like distance. As a result, there is a tremendous opportunity to stimulate airline demand with lower prices.
