Azul Linhas Aereas, Brazil's third-biggest airline, is set to announce a fleet expansion on Wednesday including an order for its first wide-body aircraft from European planemaker Airbus , according to two people with knowledge of the deal.
The order vaults Azul, which is controlled by JetBlue Airways Corp founder David Neeleman, into the international market with long-range jets challenging regional heavyweight Latam Airlines Group SA .
Airbus and U.S. rival Boeing Co battle intensely for such orders. Airbus recently offered deep discounts on its wide-body A330 to tempt lower-cost airlines away from Boeing's more modern 787 Dreamliner.
Airbus and Boeing officials declined to comment on the matter. Azul announced it would hold a press conference on Wednesday but offered no details of the announcement.
Missing out on a major deal from Brazil's fastest-growing airline would be the second big blow to Boeing since December in a key emerging market where it has been ramping up its presence.
Swedish planemaker Saab AB snagged a coveted $4.5 billion fighter jet contract with Brazil's air force at the end of last year after news of U.S. spying on Brazilians helped derail Boeing's chances for the deal.
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The Azul order also highlights a surge in competition for Brazil's more lucrative international routes as domestic passenger traffic growth has cooled after more than tripling since 2000.
The TAM division of Latam Airlines, Brazil's biggest airline, and second-largest carrier Gol Linhas Aereas have both added flights overseas while cutting domestic routes as they lost billions of dollars in recent years.
American Airlines and other foreign airlines have also boosted flights to Brazil, which is set to host the soccer World Cup starting in June and the Summer Olympic Games in 2016.
Azul is taking on those global players just six years after founder Neeleman left JetBlue and started the low-cost Brazilian airline in the country of his birth.
A takeover of rival carrier Trip in 2012 helped Azul threaten the dominance of the traditional TAM-Gol duopoly in Brazil, and the upstart airline now carries 16 percent of domestic passengers.
Still, Azul currently flies only Franco-Italian ATR turboprops seating 50 to 70 passengers and larger regional jets made by Brazil's Embraer SA with up to 120 seats.
Last year, the company announced plans for an initial public offering estimated at up to 1 billion reais ($445 million). Plans were frozen in August amid turbulent financial markets and questions from regulators about a proposed ownership structure that would keep Neeleman in control of the airline.
Azul continues to mull an IPO, the company's head of communications, Gianfranco Beting, told Reuters late last year, adding that Azul was confronting its most adverse environment since it began flying in 2008.
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Airbus announced today it was cutting more than 1,100 jobs in Europe and closing one of its sites in the Paris region as part of an ongoing restructuring programme. A total of 640 jobs will be lost in France, mostly affecting operations in Suresnes, near Paris, where a research facility will close. Another 429 jobs will go at German sites including in Hamburg, Bremen, Ulm and Ottobrunn, near Munich. "Airbus Group envisages a progressive reduction of its current workforce of around 136,000 by a maximum of 1,164 positions," it said in a statement. Unions accuse Airbus of following "financial logic" in cutting jobs at a time when its order book is worth nearly 1.0 trillion euros (USD 1.05 trillion), equivalent to eight to 10 years of production. Airbus however is running into headwinds, prompting the search for cost-cutting opportunities. Its helicopter division has suffered from a weak market, the company has had to set aside nearly two billion euros of provisions to cover the cost of its military A400M model, and its A380 flagship has been slow to take off commercially. Its restructuring project, called Gemini, aims to merge the company's commercial aircraft division into a new entity, Airbus Group, by the summer of 2017.
