Azul proves that taking a brand concept and targeting it to the right audience is a formula for success. The Brazilian airline started by David Neeleman in 2008 is a Latin version of his former JetBlue airline he founded. Neeleman turned JetBlue (JBLU) into America’s eighth largest airline. His victory would also prove to be a valuable learning lesson for reputation management. In 2007 Neeleman was ousted by his Board for not communicating a strategic strategy to turn things around during troubled times.

Is Neeleman off on the deep end for investing in an airline during this climate? The airline industry is a notoriously bad investment. Of the major industries on the Fortune 500, airlines have the worst 10-year total return to shareholders (-12.6% on average annually from 1999 to 2009).

Brazil, Latin America’s largest economy, has rebounded quickly from the financial crisis, with an anticipated 5.8% rise in real GDP this year. The China-like growth rate of its rising middle class — 100 million people and expanding every day — has led companies from Coca-Cola (KO, Fortune 500) to Procter & Gamble (PG, Fortune 500) to Ford (FORD) to raise their stakes in Brazil. Neeleman has drawn high-profile investors like private equity firm TPG, which has invested $30 million in Azul.

Azul airline started flying in December 2008 and registered 2.2 million passengers in its first 12 months, shattering the previous record for a startup airline — held by JetBlue. “It took JetBlue 10 months and 10 days to get 1 million passengers. We did it in less than eight months,” Neeleman says. He expects the startup’s current headcount of 2,100 to reach 2,500 or more by year-end. Revenue, $150 million last year, will probably more than double this year, he says, and privately held Azul is on track to turn its first profit.

Neeleman was born in São Paulo and lived in Brazil until he was 5.

Source:  FORTUNE

1 Comment

  1. Hands down, Apple’s app store wins by a mile. It’s a huge selection of all sorts of apps vs a rather sad selection of a handful for Zune. Microsoft has plans, especially in the realm of games, but I’m not sure I’d want to bet on the future if this aspect is important to you. The iPod is a much better choice in that case.

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