Azul gets ready to new air fare war
Valor Econômico
Azul Linhas Aéreas, which reached the position of fourth biggest Brazilian airline in less than a year, will launch, within 30 days, a product aimed at the new middle class and it intends to start its operations in South America within up to five years. The plans of the company are revealed by its founder and Chairman of the Board of Directors of Azul, David Neeleman, who has already set aside 25% of the earnings foreseen for this year to face a new air fare war.
On Tuesday, during a meeting with directors of Azul, Neeleman gave another sign of how he intends to annoy the competition. He decided to increase from 30 to 60 days the period of validity of a product that was born at American JetBlue, founded by him 10 years ago. For R$ 899 (US$ 486), the passenger can travel in two months as many times as s/he likes between the 17 destinations flown by Azul departing from Campinas, including cities such as Rio and Salvador. In its first version, in October, the ""Passport" was acquired by R$ 499 (US$ 270) and it allowed traveling for one month. Within a few days, the total quota of the product, of 3 thousand units, was sold out.
At the company headquarters in Alphaville, in the Metropolitan Region of São Paulo, Neeleman told Valor yesterday that Azul is ready for a new air fare war in 2010 and that they "don't need cash". He said that Azul will profit in 2010 and will have the equivalent to more than 25% of the earnings in cash.
The Officer recently said they invested US$ 15 million in the purchase of a Flight Simulator for the Embraer 190 and 195 models, which are part of the fleet of the company. The goal is to acquire the second piece of equipment when Azul gets to 40 aircrafts. Yesterday, the company received the 15th airplane. Until the end of 2010 there will be 21 units in an investment of US$ 250 million.