JetBlue Airways Inc. founder David Neeleman on Thursday went public with his long-rumored plans to start a discount airline in Brazil. Neeleman, who holds both U.S. and Brazilian citizenship and is therefore free from limits Brazil places on foreign ownership of airlines, said he has raised $150 million from unnamed Brazilian and U.S. investors to start the so-far unnamed airline.
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Neeleman's legal counsel on the startup is a Hughes Hubbard & Reed LLP team led by Ken Lefkowitz and including Chuck Samuelson, Andy Braiterman, Chris Paparella, Kathryn Taylor, Amy Danner and Damon Rowe. Lefkowitz is a travel industry veteran, having worked with Northwest Airlines Corp. and Orbitz in recent years and representing a number of airlines on the sale of reservation service Worldspan among other assignments.
There is still a lot of work left to do if the Brazilian startup is to begin flying by next year. Neeleman has ordered $1.4 billion worth of E-195 jets (pictured above) from Brazil's Empresa Brasileira de Aeronáutica SA, but still must receive approval from the government for an operating permit.
The startup could create new disruptions in a Brazilian aviation market that has stabilized following the 2006 bankruptcy of state flag carrier Viação Aérea Rio Grandense, or Varig, which was acquired by Gol Transportes Aéreos. Gol and rival TAM Linhas Aéreas currently dominate the domestic Brazilian market. But Neeleman, who stepped down as CEO of JetBlue last May after the airline suffered a service meltdown when an ice storm hit its JFK International Airport hub in New York, appears in good spirits and up for a new challenge.
"One of the things that excites me about Brazil is they don't have ice storms," Neeleman quipped in an interview with The New York Times. - Lou Whiteman
See New York Times story on Neeleman's latest project
See TheDeal.com's Deal Diary item on Ken Lefkowitz's past dealings with the airline industry
