Trip Airline Seeks BNDES Loans, International Leasing to Finance Aircraft

Trip Linhas Aéreas will seek funds from Brazil’s national development bank, known as BNDES, and international leasing operations to finance its plan to add 10 aircraft to its fleet in 2011, said Chief Executive Officer Jose Mario Caprioli.

“We’ll use mostly BNDES for the Embraer aircraft, and we’re studying proposals from two American leasing companies,” Caprioli said in a telephone interview from Campinas, Brazil.

Trip, the fourth-largest Brazilian airline by market share according to the national civil aviation agency, intends to buy in 2011 five E-190 jets, made by Empresa Brasileira de Aeronáutica SA, known as Embraer, and five ATR-72 turboprops made by ATR Regional Aircraft. The total value of the aircraft is $305 million.

Caprioli prefers leasing abroad due to lower cost and a reduced initial investment. Interest rates on contracts with BNDES range from between 6 percent and 9 percent a year, while the cost in leasing transactions in foreign markets varies between 4 percent and 6 percent annually, said Caprioli. This year, the company will receive nine aircraft, five of which are financed by BNDES and four bought with operational leasing.

Caprioli wants to make the company public in the future, and doesn’t foresee a favorable climate for an initial public offering for at least two years.

To contact the reporter on this story: Jose Sergio Osse in Sao Paulo at josse1@bloomberg.net

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