Azul to revisit IPO plans later this year as prospects brighten

Azul Linhas Aéreas Brasileiras (AD, São Paulo Viracopos) founder and CEO, David Neeleman, says his airline will revisit its recently shelved IPO plans in either December or January. In an interview with Bloomberg, Neeleman said the 6 year-old carrier was under pressure from investors to go public.

Azul had intended to raise up to USD540million in an IPO in 2013 but scrapped its plans due to "adverse" market conditions.

Concerning his airline's future plans, Neeleman told the newswire that Azul will likely be one of the biggest beneficiaries of the Brazilian government's Regional Aviation Development Program which will be launched early next year.

The BRL1billion (USD443million) program will incentivize domestic air travel through the subsidization of carriers serving airports that handle up to one million passengers per annum while limited to 60 seats per flight or 50% of total seats offered. Funds sourced from the programme would be used to compensate for high fuel costs.

Azul falls into the category, Neelman said, given that it is the country's most prolific operator of Embraer (EMB, São José dos Campos Professor Urbano Ernesto Stumpf) and ATR - Avions de Transport Régional (EVX, Toulouse Blagnac) equipment with one of Brazil's most extensive domestic route networks. Should the RADP succeed, Azul would consider adding additional aircraft to its fleet, the CEO added.

Azul will also likely be a huge benefactor of Brazil's Secretariat of Civil Aviation's (SAC) decision to revise the allocation of slots at the congested São Paulo Congonhas airport. The airline will likely be allocated 14 to 16 slots a day at the airport which it will use in developing services to smaller, underserved Brazilian towns.

Concerning Azul's much anticipated longhaul plans, set to launch in December this year with São Paulo Viracopos to Fort Lauderdale International and Orlando International flights, Neeleman said the arrival of the airline's first A350-900s in 2017 will allow it to offer services to Europe. Until then, he said, focus will remain on North American flights with Los Angeles International and Las Vegas Harry Reid among potential future destinations.