Hazy's Air Lease Makes Brazil Carrier First Regional-Plane Deal

Steven Udvar-Hazy’s Air Lease Corp. completed its first regional-aircraft leasing accord in Brazil to tap growth in Latin America’s largest economy.

Trip Linhas Aereas SA, Brazil’s largest regional carrier, will operate five E-190 jets, from Embraer SA, and five ATR-72-600 turboprops, from ATR Regional Aircraft, in a $307 million deal. Los Angeles-based Air Lease had focused on widebody and larger single-aisle planes since its creation last year.

“We felt Trip was developing a new market segment in Brazil; they serve more cities in Brazil than any other airline,” Udvar-Hazy said in an interview yesterday in Campinas, Brazil, after the signing ceremony. “It’s kind of a niche market and we want to participate in this sector because it is a growth segment of the market.”

Udvar-Hazy ran International Lease Finance Corp., the world’s largest aircraft-leasing company, for 37 years until resigning in 2010. While still at ILFC, he began analyzing the possibility of buying regional planes to fill a gap for airlines, as Boeing Co. and Airbus SAS focused on larger jets.

Trip is the fifth-largest carrier in Brazil by market share, according to the country’s regulatory agency Anac. Its goal is to almost double gross revenue this year to 1.3 billion reais ($777 million) with the help of Air Lease’s planes. Last year, the company posted the second-biggest increase in demand, with 83 percent growth from 2009, while the market increased by 24 percent during the same period.

“To some degree,” Air Lease is going to reach out for new business with regional carriers and planes, Udvar-Hazy said.

Aircraft lessors such as Air Lease; ILFC, now a unit of American International Group Inc., and General Electric Co.’s GE Capital Aviation Services buy planes and lease them to airlines, giving carriers more flexibility in their fleets and helping them keep billions of dollars in purchases off their balance sheets.

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

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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