Texas Pacific Group (TPG) has acquired a 10 percent stake in Brazilian carrier Azul.

Published: 26 Jan 2010

Texas Pacific Group (TPG) has acquired a 10 percent stake in Brazilian carrier Azul.

According to reports in Valor Economico, TPG will pay approximately US$20 million for the stake, but will not inject additional funds into the carrier. It has been reported that the TPG investment was reportedly facilitated as Pequot Capital and Wexford Capital sold shares in the carrier. Pequot still remains a shareholder in the LCC.

The carrier expects to become profitable in 2010.

Performance

Earlier this year, it was shared that Azul Linhas Aereas Brasileiras SA carried 2.2 million passengers in its first year of operation. It is likely to be profitable this year, according to David Neeleman, founder and chairman.

The carrier, based at the airport in Campinas, a city near Sao Paulo, now operates 14 jetliners serving 16 cities. Four destinations will be added this year, and its fleet will grow to 21 aircraft by the end of 2010 and 33 by 2011, Neeleman had said, according to Dow Jones. The report also added that the airline’s target market is Brazilians who normally travel by long-distance bus, and those who don’t travel at all. Azul aims to stimulate new demand by offering inexpensive no-connection flights between Brazil’s largest cities.

The development has emerged at a stage when air travel in Brazil, the largest Latin American aviation market, posted its biggest increase in five years in 2009.

Air travel, as measured by the number of passengers transported per kilometer, soared 17.7 percent last year to 56.26 million from 47.81 million in 2008.