David Neeleman, the founder of Azul Linhas Aereas Brasileiras SA, plans to modernize the fleet of Portuguese carrier TAP and expand the network in a bid to fend off competition and turn around the debt-laden airline.
Neeleman, who teamed up with Portuguese bus tycoon Humberto Pedrosa to buy 61 percent of TAP from the Portuguese government this month, will purchase 53 new Airbus jets for TAP, increase the number of flights to Brazil and include Boston, Chicago and Washington to TAP’s U.S. routes.
“We believe that we can bolster TAP by improving the connectivity of the hub in Lisbon, strengthening our connections and adding new routes,” Neeleman said at a press conference in Lisbon Wednesday.
Neeleman’s Gateway consortium on June 11 won a tender to take control of TAP, outbidding rival Latin American airline investor German Efromovich. Gateway plans to invest 600 million euros ($671 million) into TAP and also obtain 14 new Airbus A330-900neo wide-body jets and 39 Airbus A321neo and A320neo narrow-body jets, said Neeleman.
The group also plans to hold talks with banks to restructure the airline’s more than 1 billion euros of debt.
“We have a plan and I’m sure that they will be open to working with us to strengthen TAP,” said Neeleman, who has founded three airlines, including JetBlue in the late 1990’s and Azul, Brazil’s third largest carrier, in 2008. “We’re not here to burn money.”
TAP’s main attraction is its 77 weekly flights from Portugal to Brazil, though the company also offers almost the same number of services to Africa and operates 43 routes within Europe. The airline posted a loss of 85.1 million euros in 2014, up from a 5.9 million-euro loss the previous year and had 1.06 billion euros of debt at the end of last year.
Several lenders, including Brazil’s state development bank BNDES are open to financing Gateway’s investment in TAP, Neeleman said.
“TAP is important to Brazil” and BNDES “wants to help,” said Neeleman. “They are a source of financing, not a shareholder.”