JetBlue's founder wants to start Brazilian airline, buy 36 Embraer jets

The founder of JetBlue Airways wants to start a new Brazilian airline and is in negotiations with Brazil's Embraer plane maker to buy 36 mid-range jets.

David Neeleman, JetBlue's chairman, has lined up investment totaling about $200 million for the venture, the O Estado de S. Paulo newspaper reported.

The newspaper, citing sources close to the deal, said Neeleman has already bought a small Brazilian airline named Cheta with government authorization to operate in Latin America's largest nation.

A message left for Neeleman was not immediately returned. Empresa Brasileira de Aeronautica SA had no immediate comment.

Neeleman was fired as chief executive of JetBlue Airways Corp. last year after the low-fare airline was gridlocked following a U.S. ice storm that created problems for the carrier's policy of not canceling flights ahead of bad weather.

Because Neeleman holds both American and Brazilian citizenship, he would be able to overcome a major hurdle: A requirement that only 20% of Brazilian airlines can be owned by foreigners.

The entry of a new carrier in Brazil would notice the first major competition for Brazilian market leaders TAM Linhas Aereas SA and Gol Linhas Aereas Intelligentes SA in some years, following the come down former Brazilian leader carrier Varig under a huge of debt.

Varig's passenger flight operations were sold to Gol, which is running far fewer Varig flights than when the carrier was Brazil's leading airline.