PE Eyes New Brazil Low Cost Airline

David Neeleman, the founder and former CEO of US low-cost airline JetBlue and a Brazilian by birth, has garnered commitments from at least seven private equity shops for $150m in financing to start a new low-cost airline in Brazil, say executives close to the matter. Neeleman, who was ousted by JetBlue’s board last year, is set to receive a $70m installment this month and another $70m at the end of the second quarter from a group of private investors to start the operation, which still has no name. A consortium led by Connecticut-based Pequot Capital includes US firms Weston Presidio, Wexford Capital, Peterson Partners, Zweig Associates and Dimenna & Kadon. Brazil’s GIF Gestao is also investing in the venture. Neeleman has put in $10m of his own capital. The plan, say executives close to the process, is to use the equity to lease Embraer-made aircraft and set up the company, which will compete mainly against Gol with the low-cost model. The airline will be based in Sao Paulo and aims to commence operations in early 2009. It wants to serve most major markets in Brazil with as many as 76 brand-new Embraer aircraft by 2013.