NEW YORK – US-based SkyWest Airlines will buy a 20 percent stake in Brazilian regional carrier Trip, seeking a foothold in the South American nation’s rapidly expanding passenger air travel market, the two companies said Thursday.
SkyWest Inc., based in Utah, will pay US$30 million over a two-year period to obtain the stake. Trip describes the deal as the last step in an effort to raise US$150 million that will be pumped into its operations.
“These investments will allow us accelerate the expansion of our fleet and grow,” said Renan Chieppe, chairman of Trip’s board of directors.
Trip Linhas Aereas SA is dwarfed in Brazil by market leaders Tam Linhas Aereas SA and Gol Linhas Aereas Inteligentes SA.
But Trip has been expanding in recent years as Brazil’s economy booms, and the carrier now serves 64 destinations across the Latin America’s largest country, many of them small cities ignored larger competitors.
Its fleet consists of turboprop planes, but the company this year announced it would buy five Embraer 175 mid-range jets that seat up to 88 people.
SkyWest Airlines has 442 planes and operates as United Express, Delta Connection and Midwest Connect carriers under contractual agreements with United Airlines, Delta Air Lines and Midwest Airlines.
The stake SkyWest is buying in Trip is the maximum a foreign company can hold in a Brazilian airline.
Jerry Atkin, SkyWest’s chief executive, said the companies negotiated for 16 months before reaching a deal.
“We concluded that there’s a positive convergence of vision and interests between our two companies and that the deal will provide knowledge and experience to promote a regional aviation model in Brazil that we successfully developed in the American market,” Atkin said.