Blue skies ahead: low-cost airline takes off in Brazil.

Author:Galanternick, Mery
Position:TEN UNDER TEN - Company overview



Name: Azul

Sector: Airline

Founded: 2008 in Brazil.

HQ: Barueri

CEO: David Neeleman


RIO DE JANEIRO -- Steely haired executive David Neeleman--veteran of three airlines in the United States--was geared up to take his experience and vision to a new market. The only question for the founder of JetBlue was which market?

So the Sao Paulo-born executive conducted a passenger analysis, comparing Latin American countries. When Neeleman discovered that twice as many Mexicans and Argentines took plane trips compared to Brazilians, even though Brazil boasts higher per capita income, the choice was clear.

"It was a decision based on fact, not emotion," said Gianfranco Beting, marketing director of Azul Linhas Aereas Brasileiras S.A., Brazil's newest low-cost airline that made its maiden flight in late 2008. "The fact that Neeleman was born here and loves the country also played a role."

As part of his consumer-friendly approach, Neeleman ran an online poll to name the airline in a contest that attracted nearly 160,000 votes. The winner--Azul--echoes the name of Neeleman's big U.S. success, JetBlue, for which he served as CEO until 2007.

The name was the easy part. Raising startup capital in the midst of the global economic storm presented a huge challenge. Eventually Neeleman was able to put together $200 million from American and Brazilian investors, with Grupo Bozano, the privately held holding company, taking a major stake. More recently, as credit markets eased, Neeleman secured another $35 million.

The new Brazilian airline borrowed more than just a name from JetBlue. Azul adapted some of JetBlue's innovations, such as leather seats, tray service instead of carts and two extra inches of legroom to make flights more comfortable than travel with competitors.

By establishing its base in Campinas, a city some 85 kilometers (about 53 miles) from Sao Paulo, Azul also applied the strategy of many lower-cost airlines worldwide that operate out of a secondary airport near a major metropolitan area. It began flying on December 15, 2008, with daily non-stop service from Campinas to Porto Alegre and Salvador.

Today Azul flies to 17 destinations in Brazil, 14 of them via non-stop service. It operates with a fleet of 15 aircraft and has ordered another 61 from Brazil's airline manufacturer, Embraer.

Multiple non-stop flights to key cities--at accessible price points--are fueling faster-than-predicted growth. Azul...

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