(Repeats to remove extra character in first line)
By Tim Hepher and Brad Haynes
PARIS/SAO PAULO, April 22 Azul Linhas Aereas,
Brazil's third-biggest airline, is set to announce a fleet
expansion on Wednesday including an order for its first
wide-body aircraft from European planemaker Airbus,
according to two people with knowledge of the deal.
The order vaults Azul, which is controlled by JetBlue
Airways Corp founder David Neeleman, into the
international market with long-range jets challenging regional
heavyweight Latam Airlines Group SA.
Airbus and U.S. rival Boeing Co battle intensely for
such orders. Airbus recently offered deep discounts on its
wide-body A330 to tempt lower-cost airlines away from Boeing's
more modern 787 Dreamliner.
Airbus and Boeing officials declined to comment on the
matter. Azul announced it would hold a press conference on
Wednesday but offered no details of the announcement.
Missing out on a major deal from Brazil's fastest-growing
airline would be the second big blow to Boeing since December in
a key emerging market where it has been ramping up its presence.
Swedish planemaker Saab AB snagged a coveted $4.5
billion fighter jet contract with Brazil's air force at the end
of last year after news of U.S. spying on Brazilians helped
derail Boeing's chances for the deal.
MORE INTERNATIONAL FLIGHTS
The Azul order also highlights a surge in competition for
Brazil's more lucrative international routes as domestic
passenger traffic growth has cooled after more than tripling
The TAM division of Latam Airlines, Brazil's biggest
airline, and second-largest carrier Gol Linhas Aereas
have both added flights overseas while cutting domestic routes
as they lost billions of dollars in recent years.
American Airlines and other foreign airlines have
also boosted flights to Brazil, which is set to host the soccer
World Cup starting in June and the Summer Olympic Games in 2016.
Azul is taking on those global players just six years after
founder Neeleman left JetBlue and started the low-cost Brazilian
airline in the country of his birth.
A takeover of rival carrier Trip in 2012 helped Azul
threaten the dominance of the traditional TAM-Gol duopoly in
Brazil, and the upstart airline now carries 16 percent of
Still, Azul currently flies only Franco-Italian ATR
turboprops seating 50 to 70 passengers and larger regional jets
made by Brazil's Embraer SA with up to 120 seats.
Last year, the company announced plans for an initial public
offering estimated at up to 1 billion reais ($445 million).
Plans were frozen in August amid turbulent financial markets and
questions from regulators about a proposed ownership structure
that would keep Neeleman in control of the airline.
Azul continues to mull an IPO, the company's head of
communications, Gianfranco Beting, told Reuters late last year,
adding that Azul was confronting its most adverse environment
since it began flying in 2008.
($1 = 2.245 Brazilian reais)
(Reporting by Tim Hepher and Brad Haynes; Editing by Lisa
Shumaker and Miral Fahmy)