JetBlue Founder Starting Airline in Brazil

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, a leading Brazilian newspaper reported Tuesday.

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.

Neeleman was ousted 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. Thousands of people were trapped on planes for hours or stranded in terminals for days.

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

The entry of a new carrier in Brazil would mark the first major competition for Brazilian market leaders TAM and GOL in several years, following the collapse former Brazilian flagship carrier Varig under a mountain of debt.