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Founder of JetBlue Airways announces plans for new Brazilian airline starting in 2009
Brazil New Airline 5540711
David Neeleman, founder of JetBlue Airways, right, and Frederico Fleury Curado, President and CEO of Brazilian aircraft manufacturer Embraer, unveil a model of a plane during a news conference in Sao Paulo, Thursday, March 27, 2008. Neeleman announced a new Brazilian airline to begin operating next year with three jets and eventually grow to a fleet of 76 planes flying nationwide. The new airline doesn't have a name yet. - photo by Associated Press
    SAO PAULO, Brazil — The founder of JetBlue Airways announced plans Thursday for a new Brazilian airline that would begin operating next year with three jets and eventually grow to a fleet of 76 planes flying nationwide.
    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,’’ he said. ‘‘Brazil is a country that needs more competition and a different kind of competition.’’
    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 told a news conference in Sao Paulo, where the airline will have its headquarters.
    JetBlue Airways Corp. spokesman Bryan Baldwin said he was ‘‘not privy to conversations’’ that the board members have had about Neeleman. Baldwin declined further comment, and said JetBlue chief executive Dave Barger was unavailable. Calls to most other JetBlue directors Thursday were not immediately returned.
    Neeleman said his new venture has no connection to JetBlue, but some former JetBlue executives will join it. The new airline doesn’t have a name yet, and will use mid-size E-195 jets made by Brazil’s Empresa Brasileira de Aeronautica 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 out 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.
    Neeleman said that he has raised $150 million for the venture so far from investors in the United States and Brazil and that the group has deep enough pockets to compete in a fare war if one starts after his planes take to the skies.
    ‘‘We have capital and we’re ready for a war but we don’t think a war will happen,’’ he said.
    The new carrier will add about one plane per month after it starts operating early next year, reaching a fleet of 76 within five years, Neeleman said.
    There are no plans now for the airline to have international routes, but Neeleman said that is a possibility because the Embraer jets could fly without refueling throughout most of South America.
    The E-195 planes will be outfitted much like JetBlue’s planes in the United States, using a single class where all seats are made of leather and each passenger can choose satellite TV channels to watch. Those sort of creature comforts are virtually unknown now in 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.
    Neeleman was ousted from his job as JetBlue’s chief executive last May, less than three months after a bungled response to two winter storms forced the airline to cancel nearly 1,700 flights. He was replaced by Dave Barger, who until then had served as president. At that time, Neeleman said he understood the board’s decision, explaining that he was more of a big-picture visionary than a nuts-and-bolts airline operations expert.
    In later interviews, however, Neeleman expressed surprise that the company’s board moved so quickly to remove him.
    Less than a month after his ouster, Neeleman sold 2.5 million shares of JetBlue stock, or 23 percent of his holdings at the time, his first-ever sale of company stock. He has since raised nearly $30 million in a series of JetBlue stock sales.
    AP Business Writer John Wilen contributed to this report from New York.

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