Copyright Photo: Azul Brasil (Azul Linhas Aereas Brasileiras) Airbus A320-251N WL F-WWIC (PR-YRA) (msn 7186) TLS (Eurospot). Image: 934985.
Azul Brazilian Airlines (Sao Paulo) has issued this statement concerning an investment by the HNA Group:
Countering the headwinds of the current Brazilian economic crisis, Azul Brazilian Airlines announces today an important milestone that positions it as an even stronger and more competitive airline. The Chinese international conglomerate HNA Group has selected Azul as its primary strategic investment in Latin America.
In one of the largest equity investments in a Brazilian company this year, Azul received a firm commitment from HNA Group, subject to completion of certain conditions precedent, for the investment of $450 million (US) in exchange for an economic stake of 23.7%. As a result, HNA Group will be Azul’s newest shareholder and board member. With this equity raise, Azul will have one of the strongest balance sheets in Latin America.
Over the past 20 years, HNA Group has successfully transformed itself from a traditional aviation company to a global conglomerate spanning the aviation, real estate, finance, tourism, and logistics sectors, with revenues of $21 billion and over 110 thousand employees.
HNA Group has a solid experience with aircraft lessors and has recently invested in Swissport, a renowned global aviation handling company. Within its aviation group, HNA owns 14 airlines with a total fleet of 561 aircraft.
According to David Neeleman, CEO of Azul, the Chinese group saw in Azul a solid investment with high growth potential. “The investment of $450 million investment, considering Brazil’s current macroeconomic situation, demonstrates that we have a winning business model and that the HNA Group, as a large investor, has absolute confidence in Azul’s team. Moreover, this investment makes Azul the airline with the highest valuation in the Brazilian market, at US$ 1.9 billion.”
“HNA Group is committed to expanding in the airline industry through strategic investments in companies with strong market positions and excellent management teams. We are pleased to partner with Azul in order to bring more choice and convenience to our customers traveling to and from Brazil. We eagerly look forward to working with Azul founder David Neeleman and his team for the mutual benefit of both airlines,” said Adam Tan, President of HNA Group.
This investment will bring significant benefits to Azul including a stronger cash position, support for its fleet plan, product and service improvements. Moreover, the partnership between Azul and HNA Group will result in commercial agreements, joint negotiation efforts, and adjustments in aircraft allocation. Finally, it also enables the company’s entry into the Asian market.
Seabury Securities LLC, Seabury Group’s investment banking unit, served as financial advisor to Azul.
Copyright Photo: Rodrigo Cozzato/AirlinersGallery.com. Azul is smiling. Azul Brazilian Airlines (Azul Linhas Aereas Brasileiras) Embraer ERJ 190-200 IGW (ERJ 195) PR-AUB (msn 19000660) arrives at Sao Paulo (Guarulhos).
Azul Brazilian Airlines, Brazil’s largest airline by cities served, yesterday (November 16) added a new daily flight from Orlando International to Belo Horizonte, Brazil, the first-ever nonstop flight on the route. Belo Horizonte is Azul’s second hub destination, where Orlando travelers will be able to connect to more than 100 destinations. The company also operates daily flights from Fort Lauderdale/Hollywood and Orlando to São Paulo. Azul Cargo services are available in all international flights.
The new daily service will depart Orlando (MCO) at 6 pm (1800), arriving in Belo Horizonte at 5:32 am (0532) the following morning. The return flight will depart Belo Horizonte at 10:18 am (1018), arriving at MCO at 4:15 pm (1615).
Copyright Photo: Andy Cripps/AirlinersGallery.com. Airbus A330-243 PR-AIU (msn 494) in the special Azul Viagens livery departs from Fort Lauderdale-Hollywood International Airport (FLL).
Azul Linhas Aereas Brasileiras (Campinas-Viracopos) is adding another route to Orlando. The carrier will launch a new daily route connecting Sao Paulo (Guarulhos) and Orlando starting on December 15.
This is in addition to the Belo Horizonte – Orlando route due to start on November 16.
Copyright Photo: Rodrigo Cozzato/AirlinersGallery.com. Airbus A330-243 PR-AIW (msn 462) lands at Campinas-Viracopos (VCP).
United Airlines (Chicago) and Azul Linhas Aereas Brasileiras (Azul Brazilian Airlines) (Sao Paulo) today (June 26) announced a new strategic partnership in which United will acquire an approximate 5 percent stake in Azul, Brazil’s third-largest airline, paving the way for the carriers to cooperate on a range of customer benefits including codesharing of flights (subject to government approval), expanded connection opportunities on routes between the United States and Brazil, in addition to other points in North and South America, and joint loyalty-program participation.
Through a wholly owned subsidiary, United will invest $100 million for its economic stake in Azul, which includes one seat on Azul’s board of directors.
As a result of the partnership, United and Azul will expand their frequent flyer loyalty agreement.
Copyright Photo Above: Rodrigo Cozzato/AirlinersGallery.com. The announcement ceremony in Sao Paulo today.
United began serving Brazil in 1992, with flights to both Rio de Janeiro and Sao Paulo. The airline currently operates five daily flights to Brazil from its Chicago (O’Hare), Houston (Bush Intercontinental), Newark and Washington (Dulles) hubs.
Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. United Airlines’ Boeing 777-222 ER N229UA (msn 30557) climbs away from Los Angeles International Airport.
Bottom Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com. ATR 727-202 PR-AZS (msn 523) arrives at the Viracopos International Airport (Campinas) base serving the Campinas area near Sao Paulo.
David Neeleman, the airline entrepreneur who was involved with running Morris Air (Salt Lake City) with June Morris before he founded NewAir (later JetBlue Airways) (New York) and later Azul Brazilian Airlines (Sao Paulo), has struck out again with a new airline venture. This time he is not creating something new but buying into something old.
Neeleman lead an investment group which has been selected by the state of Portugal to acquire their controlling share in troubled flag carrier TAP Portugal (Lisbon) for €348 million ($391 million), outbidding investor German Efromovich. Besides running Azul, he will now be running trouble-plagued TAP Portugal. His group will control 61 percent of the stock of TAP Portugal. Neeleman’s group will upgrade the carrier with new aircraft (probably new Embraers for the European routes).
TAP Portugal is also likely to receive a new makeover with the new ownership group, possibly with a new blue theme.
Read the full report from Bloomberg Businessweek: CLICK HERE
Portugal is the mother country of Brazil. The ties are strong. Both countries speak the same language and the traffic patterns are strong between Brazil and Portugal. The Azul-TAP alliance will now compete against TAM and the LATAM Airlines Group which wants to increase the number of flights between Brazil and Europe. The battle lines are being drawn in Brazil.
For Neeleman, his Brazilian roots are deep. According to Wikipedia, Neeleman was born in São Paulo, Brazil, but raised in Miami. He lived in Brazil until he was five. He later attended Brighton High School in Cottonwood Heights, Utah, and attended the University of Utah for three years before dropping out. He served on a religious mission for The Church of Jesus Christ of Latter-day Saints (The Mormons) in the Northeast Region of Brazil.
After starting JetBlue Airways, CEO David Neeleman on May 10, 2007 was forced out and replaced by David Barger.
Neeleman headed south, back to his original roots. On March 27, 2008 Neeleman officially announced plans to launch a new airline, Azul (Portuguese for “blue”). Azul is now Brazil’s third largest airline and it is expanding internationally.
Also according to Wikipedia, Neeleman lives with his family in New Canaan, Connecticut, United States. He is the father of nine children. In 2000, he disclosed to CNBC that he has adult attention-deficit disorder (see the video above).
When Azul expanded to the United States it picked two cities that are big on the JetBlue Airways route map – Fort Lauderdale/Hollywood and Orlando, Florida. The ties between Azul and Neeleman’s old JetBlue Airways remain strong.
JetBlue has considered larger aircraft and longer-range routes to Latin America in the past. In essence, Azul is now filling this void (at least to Brazil) with its newly-acquired Airbus A330s.
It is very likely that Neeleman has much bigger plans in mind. The synergy between Brazil (and Latin America), North America and Europe are strong. For Neeleman, he now has the European piece in place once he solves the problems plaguing the flag carrier of Portugal. He also has remaining ties to the North American airline he founded – JetBlue Airways. Are the three the future base of a much larger airline alliance?
For JetBlue, their strategy is to make airline friends with any international carrier that has the potential of code sharing at their point of entry into the United States. They have successfully carved out a niche feeding international airlines especially at New York (JFK), Orlando and Fort Lauderdale/Hollywood. This strategy has recently put them at odds with the “Big Three” (American, Delta and United) over the on-going Open Skies dispute with the “Gulf Big Three” (Emirates, Etihad and Qatar). Due to their stance, their ties with the Gulf Big Three are likely to expand. Will Qatar Airways leave the oneworld alliance for JetBlue?
There is a lot of potential for a future Azul-TAP Portugal-JetBlue alliance although JetBlue is unlikely to do anything that would upset any relationship it has.
For David Neeleman, this is only the beginning.
Video: GE Capital. David Neeleman on Leadership and Innovation.
Azul Linhas Aereas Brasileiras S.A. (Sao Paulo-Viracopos) and Embraer S.A. (São José dos Campos) have reached a final agreement for 30 firm orders for the E195-E2 jets. The contract, announced as a Letter of Intent (LOI) during the 2014 edition of the Farnborough International Airshow, in July last year, also includes an additional 20 purchase rights for the same model, bringing the total potential order up to 50 E195-E2 jets.
Currently, the Brazilian airline has a total of 82 E-Jets in service and another six E195s on order. It operates the largest fleet of E195s in the world. With this firm order from Azul, the E-Jets E2 backlog reaches 242 firm orders, plus 348 options and purchase rights.
The first delivery of an E-Jets E2 (the E190-E2) is planned for the first semester of 2018. The E195-E2 is scheduled to enter service in 2019 and the E175-E2 in 2020. Embraer’s E-Jets E2s have state-of-the-art Pratt & Whitney PurePowerTM Geared Turbofan high by-pass ratio engines (PW1700G on the E175-E2, PW1900G on the E190-E2 and E195-E2). Combined with new aerodynamically advanced wings, full fly-by-wire flight controls, and improvements to other systems, the E2s will deliver significant reductions in fuel burn, maintenance costs, emissions, and external noise.
Image below: Embraer: