Azul Linhas Aéreas Brasileiras (AD, Sao Paulo Viracopos) is proposing a joint venture (JV) with TAP Air Portugal (TP, Lisbon) to its shareholders as the Brazilian carrier looks to gain more clout in the highly competitive transatlantic market.

The two carriers have been openly discussing such a move for over two years, but are yet to put pen to paper on formalising a transatlantic JV. Speaking at an investor update on November 7, Azul's Founder and Chairman David Neeleman says the airline is excited to move the partnership between the two carriers into a new phase, ultimately benefiting both airlines and their passengers across Brazil.

The Portuguese flag carrier has undergone a dramatic restructuring, fleet renewal and Atlantic network expansion since Neeleman's Atlantic Gateway consortium took a share in the European carrier in 2015. TAP is currently the leading operator of scheduled services between Europe and South America, with over 19,000 weekly seats and 69 weekly flights from Lisbon and Porto, according to the ch-aviation capacities module.

By contrast, Azul currently offers just 14 weekly services and a capacity of nearly 3,700 weekly seats, from Sao Paulo Viracopos to Porto (3x weekly) and Lisbon (11x weekly).

“TAP is going through the same kind of fleet transformation as we are,” said Neeleman. “We are really excited about our investment and the strategic value of the joint venture. There will be huge synergies, we will be able to coordinate schedules and fares, but also as an investment.”

Neeleman was also supportive of Brazil's new government at the briefing, which was elected in October 2018, as it had reduced taxes and invested in airport infrastructure across the country, which he believes have contributed to a new era for the country's aviation industry.

“There is newfound optimism in the country, the ministers are doing all the right things and Brazil is headed in the right direction,” said Neeleman. “We are adding this capacity before Brazil takes off, we think it will grow again in the next couple of years and are poised to take advantage of that growth.”