Neeleman’s Azul to Go Beyond Brazil With Wide-Body Jets to U.S.
Azul: Azul Linhas Aereas Brasileiras SA, the short-haul airline started by JetBlue Airways Corp. founder David Neeleman, is joining the crowded battle for Brazilians who want to fly to and from the U.S.
Azul’s expansion, representing a $2 billion investment.
Azul Linhas Aereas Brasileiras SA, Brazil’s third-biggest airline, is considering buying the newest-model narrow-body jets from Airbus Group NV (AIR) or Boeing Co. (BA:US) to add bigger planes on its busiest domestic routes, said Chief Executive Officer David Neeleman.
Azul may need about 30 single-aisle airplanes to replace its Embraer SA (EMBR3) regional jets as those aircraft are shifted elsewhere in an expanding network, said Neeleman, who also founded JetBlue Airways Corp. The decision is between Boeing’s 737 Max and Airbus’s A320neo, he said.
Neeleman is betting on continued growth in passenger demand in Brazil, where the number of travelers has tripled in the past decade to more than 100 million. Barueri, Sao Paulo-based Azul will add routes in about 50 cities that have no existing flights when a proposed government subsidy program for regional aviation gets under way as early as next year.
VIDEO: Neeleman’s Azul Weighs Newest Boeing-Airbus Aircraft
“Cost per seat mile is becoming a bigger factor on the long-haul flights,” because the price of jet fuel is so high, Neeleman said today in an interview at Bloomberg’s New York headquarters. “If the regional aviation program comes out, it’s going to be a boom.”
Boeing’s 737 Max is designed to reduce fuel consumption by as much as 20 percent, while the A320neo claims a 15 percent reduction. Jet kerosene in Brazil is among the most expensive in the world because of high taxes.
“We know this market is going to grow a lot,” Neeleman, 54, told reporters today in Campinas. “We’ll go where Brazilians want to go.”