Jetrader - March/April 2011 - 9

JT: What were some of your ﬁrst forays into the industry? DN: My ﬁrst foray was at a travel agency doing charter ﬂights to Hawaii. That developed into Morris Air Charter, then Morris Air Service, then Morris Air, which we sold to Southwest Airlines back in 1993. It was the ﬁrst airline that Southwest ever purchased and integrated. JT: As your fourth startup airline, what has been the experience with Azul, and how have you done things differently this time around? DN: This is my fourth airline in three different countries, so I’ve had to adapt as I’ve gone along. The thing that is interesting about Brazil, is that it is a market that is underdeveloped. It’s probably the biggest opportunity I’ve ever been involved in, as far as the market share perspective. We have twice the market share in Brazil after two years than JetBlue has after 10 years in the United States market. It has the opportunity to be the largest—at least ﬁnancially—success of any of the airlines I’ve ever done.

JT: How does working and running a start-up airline in the emerging market of Brazil differ from the United States? DN: There are some challenges that you don’t have in the United States. For example, we run a pretty extensive bus service that brings our people in from cities. We have about 3,000 people a day on our buses, where we provide free transportation. That’s something you wouldn’t have to do in the United States necessarily because people have other options. It is expensive to go by taxi, and a lot of people don’t have cars. We also have our own credit department. Instead of taking all the credit on someone’s credit card because they have less credit or if they don’t have a credit card, we do bank transfers on a monthly basis. So those are the two big issues that we deal with to try to get people traveling who haven’t traveled before. JT: What do you envision as the long-term goal for Azul? What kind of size and scope do you envision? Should we expect to eventually see intercontinental operations with the Azul ﬂag? DN: There are no plans to do that, but it is certainly a possibility. There are just so many things that need to be done down there. There are logistics challenges in Brazil. There are opportunities. We’re getting some ATRs now to ﬂy to cities that have little or no air service. Our Embraers are ﬂying in between cities. Half of all our ﬂights ﬂy in markets where we have no non-stop competition. There’s only one Brazilian airline that ﬂies intercontinental. I’m not saying we have any plans to do that, but there’s an opportunity there. There’s an opportunity to delve more deeply into cargo. There’s a lot everywhere you look. It’s the land of milk and honey; it’s the land of opportunity, and we’re happy to be there. JT: What challenges have you had to overcome since leaving JetBlue and founding Azul in 2008? DN: It was actually something that went really smoothly. We raised the money really fast. Obviously, we were right in the middle of the crisis, so we had to put more down payments at higher amounts than we had anticipated, which caused us to have to go back to our investors and raise some additional capital. We’ve ﬁnished two full years. In the third year, we’ll be solidly proﬁtable. We are already proﬁtable now. Certainly the ﬁnancial crisis affected us like it did everybody else, but we’re in a growing, dynamic market. We have issues of people who don’t have credit and we’re teaching people how to ﬂy, but it is an exciting challenge. Our creative juices have been really pushed to the limits being down there. It’s really exciting. JT: You were the ﬁrst large operator of the E190 in the United States and the E-family is key to your strategy in Brazil. What made the aircraft so attractive to you both at JetBlue and now? DN: There’s just no other plane like it. It ﬁlls a really important niche in the 70-seat market, where you have the scope airplanes that were made for scope clauses that Jetrader 9

Jetrader - March/April 2011

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