Tag: Brazilian (Page 6 of 6)

Brazil Court Blocks Proposed Embraer-Boeing Tie-Up

December 6, 2018 / WIL BALDWIN

BRASILIA (Reuters) – A Brazilian federal court on Thursday granted an injunction blocking the proposed tie-up between planemakers Boeing Co (BA.N) and Embraer SA (EMBR3.SA), according to a court document seen by Reuters.

The decision, which can be appealed, forbids Embraer’s board of directors from signing the deal with Boeing. Boeing and Embraer did not immediately reply to requests for comment.

The legal action was brought by four congressmen with Brazil’s leftwing Workers Party, which is opposed to the deal.

The companies announced in July that Brazilian planemaker Embraer would sell 80 percent of its commercial aviation business to Boeing.

But the deal has stalled, partly because the Brazilian government, which has the power to veto important decisions at the planemaker, has been reluctant to give it a greenlight.

President Michel Temer said he would leave the decision to the future administration, which takes office Jan. 1. President-elect Jair Bolsonaro has said he is in favor of the deal.

(Reporting by Ricardo Brito; Editing by Lisa Shumaker and David Gregorio)

Image from www.embraer.com

Will Brazil’s Azul Join Avianca-United Airlines Alliance?

December 3, 2018 / WIL BALDWIN

SAO PAULO, Dec 3 (Reuters) – Two Brazilian airlines, Azul SA and Avianca Brasil, are targets for expansion in the wide-ranging alliance between United Continental Holdings Inc , Colombia’s Avianca Holdings and Panama’s Copa Airlines on U.S.-Latin America routes, Avianca Holdings’ Chief Financial Officer, Gerardo Grajales, told Reuters on Monday.

There was little reference to Brazil, by far the region’s largest market, when the alliance was announced on Friday, but Grajales said the parties to the agreement already had in mind Azul and Avianca Brasil, which operates independently of Colombia-based Avianca Holdings.

“The two airlines complement each other in the Brazilian market,” Grajales said. “From the beginning we thought that Brazil should be covered by our agreement, however, no partnership would be authorized if it did not have an Open Skies agreement.”

The Open Skies agreement between Brazil and the United States was signed into law in May, when discussions among the three airlines were already advanced, he explained.

The airline agreement mimics a partnership between American Airlines and Chile’s Latam Airlines which has been mired in regulatory scrutiny.

The announcement between the United Airlines parent, Avianca and Copa capped off almost two years of negotiations. United will loan Avianca’s majority shareholder almost $500 million to be spent on ventures outside of the airline.

Depending on how it is repaid, United could end up owning a large chunk of the Colombian carrier. United is making no monetary investment in Copa or its affiliates.

United already owns an 8 percent stake in Azul, and has a codesharing agreement with Avianca Brasil, formerly known as Ocean Air.

Shares in Azul were down almost 5 percent on Monday afternoon in Sao Paulo. The world’s largest asset manager BlackRock disclosed late on Friday that it had sold an almost 10 percent stake in Azul’s preferred shares. Hours earlier, the carrier disclosed in another securities filing that it sought to double in size in the next five years.

Azul did not immediately respond to a request for comment. (Reporting by Marcelo Rochabrun; Editing by David Gregorio)

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Gol Says Brazil’s Foreign Qwnership Ban Is Outdated

November 14, 2018 / WIL BALDWIN

NEW YORK, Nov 14 (Reuters) – Decades-old regulations barring foreigners from owning Brazil’s airlines are outdated and “might make no sense anymore,” the top executive of Brazil’s largest airline, Gol Linhas Aereas Inteligentes SA, said on Wednesday.

Foreigners are limited by law to a 20 percent stake in any Brazilian airline’s voting stock. But while Brazil may be entering an economic liberalization phase – far-right President-elect Jair Bolsonaro has vowed to cut spending and privatize state companies – Gol Chief Executive Officer Paulo Kakinoff said it is unclear whether the new administration will seek to loosen the existing regulations.

“Our company has always been in favor of bringing to our country all the conditions to have access to foreign capital without any kind of restriction,” Kakinoff told Reuters in an interview. “This should be one of the positive effects of having some change in the current legislation.”

Outgoing President Michel Temer has said he is in favor of allowing full foreign ownership. In 2017, he said he would enact this change through executive action, only to change his mind and submit a bill to Congress, where the plan has stalled.

Kakinoff added that Gol is not currently in talks with Delta Air Lines Inc, which owns a 9.5 percent stake in Gol preferred shares, or any other entity, about taking a bigger stake in the Brazilian carrier.

In October, Gol said it planned to acquire full control of its listed loyalty program, a subsidiary called Smiles Fidelidade SA.

Gol’s stock surged in response, while Smiles’ plummeted almost 40 percent in one day.

Gol Chief Financial Officer Richard Lark said the airline needed to incorporate Smiles to avoid “competitive disadvantages,” especially with its largest local rival, Latam Airlines Group SA, which earlier this year decided to gobble up its loyalty program company, called Multiplus SA.

A key difference in the transactions, however, is that Latam offered cash to investors, while Gol is offering only its own preferred stock, with the exchange ratio yet to be defined.

Some minority shareholders have criticized the transaction, saying they will lose voter rights if their Smiles shares are exchanged for Gol shares, a charge the airline disputes.

“Although the company owns preferred shares in the operational company, decisions about the airline and the loyalty program will continue to be taken at the board of Gol. It won’t be a shell company,” Lark said.

Reporting by Marcelo Rochabrun; Editing by Dan Grebler

Image from www.voegol.com

Azul and Copa Airlines Announce Codeshare Agreement

November 8, 2018 / WIL BALDWIN

Customers can conveniently connect to Azul’s unrivaled domestic network when flying
Copa into and out of Brazil; in addition to the codeshare agreement, Azul and Copa also
announce today the launch of their frequent flyer cooperation agreement.

São Paulo, November 8, 2018 – Azul Brazilian Airlines and Copa Airlines have announced today a broad cooperation agreement that will connect the two largest route networks in Latin and South America. As part of this agreement, customers can conveniently connect to Azul’s unrivaled domestic network when flying Copa into and out of Brazil. This agreement means that Copa customers can now potentially access all of Azul’s 101
domestic destinations in Brazil, including 52 destinations not served by any other airline. In the near future, Azul will also place its code on Copa flights into and out of its Panama city hub, allowing Azul’s domestic customers to take advantage of the broadest network in Latin America. The benefits and convenience of a codeshare ticket include those of thru check-in and thru-baggage.

In addition to the codeshare agreement, Azul and Copa also announce today the launch of their frequent flyer cooperation agreement. Starting in December, members’ of TudoAzul, Azul’s loyalty program, and ConnectMiles, Copa’s loyalty program can now easily earn frequent flyer points when flying either airline.

“Copa Airlines is always looking for partnerships to offer the best travel experience and enhance our route network for our customers. This new partnership with Azul reinforces the company’s presence in Brazil as well as expands our connectivity domestically in this important country”, said Dennis Cary, Commercial and Planning Senior Vice President, Copa Airlines.

“This codeshare agreement also allows us to offer more flight options to major cities in the Brazilian southeastern and northeastern regions to which we currently do not fly and which, through our Hub of the Americas, will be connected with Panama and the rest of the American continent bringing more opportunities and economic development to these cities”, added Cary.

Operational excellence is embedded deep within the DNA of both Copa and Azul. “In addition to the broad portfolio of destinations, this codeshare brings together two of the most on-time airline in the world. Copa is the most on-time airline in Latin America while Azul is the most punctual in Brazil. This ensures the best possible experience for our connecting customers”, highlights Shah.

Once the agreement is approved by the regulatory authorities, Customers of both airlines will be able to enjoy all these benefits.

Story from voeazul.com

New Brazil President Bolsonaro OK With Embraer-Boeing Deal

October 29, 2018 / WIL BALDWIN

RIO DE JANEIRO, Oct 29 (Reuters) – Brazilian President-elect Jair Bolsonaro has a positive view of a proposed commercial aviation partnership between Boeing Co and local aircraft maker Embraer SA, Bolsonaro’s choice for defense minister told Reuters on Monday.

Former General Augusto Heleno said the deal could be cleared by the current administration of President Michel Temer, although Bolsonaro’s team would like to see details of the proposed joint venture.

“It’s not that the government is leaving and so it cannot take any action,” Heleno said, referring to the outgoing Temer administration. “If we had a conversation and we reached a conclusion, ‘Look, everything’s good, this is worth it,’ we don’t have to keep waiting,” Heleno said.

Embraer reached a preliminary agreement in July to sell 80 percent of its commercial jet division to Boeing in a venture valued at $4.75 billion. The deal has not closed yet, in part because Brazil’s government holds a “golden share” that grants it veto power over strategic business decisions at Embraer.

Last week, the current defense minister, Joaquim Silva e Luna, told Reuters that Brazil’s next president would be presented with the details of the deal.

(Reporting by Rodrigo Viga Gaier and Ricardo Brito Writing by Marcelo Rochabrun; Editing by Steve Orlofsky)

Image from www.embraer.com

Embraer Gets $1.1 Billion Order From United Airlines

July 17, 2018 / WIL BALDWIN

SAO PAULO (Reuters) – Embraer SA (EMBR3.SA) has signed a firm order with United Airlines (UAL.N) for twenty-five 70-seat E175 jets, the Brazilian planemaker said on Monday, providing a boost to the company shortly after JetBlue Airways Corp (JBLU.O) opted to replace its fleet of Embraer jets with ones made by Airbus SE (AIR.PA).

Under the contract, worth $1.1 billion at current market value, Embraer is set to deliver the jets in the second quarter of 2019, Embraer said in a statement.

Earlier in July, JetBlue announced it would buy 60 A220-300 narrowbody jets from Airbus, sending down shares in Embraer. The A220 will replace JetBlue’s existing fleet of 60 Embraer E190 aircraft, with those jets retiring beginning in 2020.

That came shortly after Embraer and Boeing Co (BA.N) struck a deal creating a new $4.75 billion joint venture, effectively reshaping the global passenger jet industry.

(Reporting by Gram Slattery; Editing by Steve Orlofsky)

Boeing proposes up to 90% stake in new Embraer

February 6, 2018 / WIL BALDWIN

BRASILIA (Reuters) – Boeing Co has presented a plan to Brazil’s government that would give it an 80 to 90 percent stake in a new venture encompassing Embraer SA’s commercial jet business, a Brazilian newspaper reported on Tuesday.

The plan Boeing presented to the government on Thursday would let it take over Embraer’s commercial operations via the creation of a new company, with defence operations remaining under the Brazilian planemaker’s control in order to meet government demands, Valor Economico reported, without citing a source.

Reuters previously reported on Friday that Boeing was seeking approval in Brasilia for a plan creating a new joint company excluding defence operations.

Valor reported that under the proposal Boeing would pay Embraer in cash when the commercial assets are transferred to the new company, with most of the proceeds then distributed to shareholders as dividends.

Boeing’s tie-up with Embraer, the world’s third-largest planemaker, would give it a leading share of the 70- to 130-seat market, meaning stiffer competition for Bombardier Inc and Airbus SE’s joint CSeries programme.

Embraer would retain the defence business that generates almost nothing in earnings before interest, taxes, depreciation and amortisation. Shareholders would also have 10 to 20 percent of the commercial activities transferred to the new company and be entitled to dividends.

The deal would maintain the government’s so-called golden share in Embraer, a former state enterprise, giving it veto power over certain strategic decisions, including Boeing’s current push for a tie-up.

The plan – if supported by the government and Embraer – could be presented to shareholders for approval as soon as the second quarter, the newspaper said. Further meetings between Boeing and the government will not occur until after the Carnival holiday, which ends next week, it reported.

Boeing and Embraer did not immediately respond to requests for comment.

(Reported by Jake Spring; Edited by Kirsten Donovan)