Page last updated at 16:27 GMT, Thursday, 27 March 2008

Brazil take-off for JetBlue boss

Embraer E-195 jet
The airline has placed a $1.4bn order for Embraer E-195 jets.

The founder of US low-cost airline JetBlue has unveiled plans to create a new carrier in Brazil.

David Neeleman said that the airline, which is yet to be named, would begin with three jets but expand to 76 planes flying nationwide.

The airline is to buy 36 Embraer E-195s, an order worth $1.4bn (700m).

Large distances between Brazilian cities, limited competition and current high prices meant the airline had a good opportunity, Mr Neeleman said.

"The prices that people pay here in Brazil are 50% higher than the prices people pay in the US," said the Sao Paulo-born businessman.

"Brazil is a country that needs more competition and a different kind of competition."

Smaller planes

Mr Neeleman is able to overcome the obstacle that bars foreigners from holding more than a 20% stake in Brazilian carriers because he holds Brazilian as well as US citizenship.

The country is currently dominated by two main airline companies - TAM and Gol. The country's former national carrier, Varig, collapsed two years ago and was bought up by Gol, which continues to operate it as a separate concern.

The company has taken a option to buy an additional 40 of the Embraer jets, which would take the value of the order to over $3bn.

The 118-seater planes are smaller than those used by existing carriers in Brazil. Mr Neeleman said the Embraer E-195 was "the perfect plane for the market".

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