Azul, Brazil's third-largest airline controlled by JetBlue founder David Neeleman, withdrew its plans for an initial public offering on Monday. It originally filed for a $100 million IPO in May 2013, although we estimate it could have raised $500 million or more.
The company's withdrawal was not completely out of the blue. After media sources speculated that the company would attempt an IPO before the World Cup, founder and CEO Neeleman said in February "I don't need to do an IPO because of the World Cup, in fact we don't need to do an IPO." Then in April, after Azul bought 11 new Airbus jets, the CEO reiterated that he did not think an IPO was urgent. Neeleman, an airline veteran, founded both JetBlue, which went public in 2002, and Morris Air, which was acquired by Southwest Airlines in 1993.
Azul has grown its domestic market share from 13% in May 2013 to 17% in May 2014, as industry leaders TAM (40%) and GOL (35%) remain unchanged as a percent of miles or air travel purchased. After five of its new Airbus planes are delivered in 2017, Azul will break into the international air travel market, which currently controlled by TAM (87%) and GOL (13%).
The Sao Paulo, Brazil-based company was founded in 2008 and had planned to list ADSs on the NYSE and preferred shares on the São Paulo Stock Exchange. Morgan Stanley, Itau BBA, Goldman Sachs, Santander and Banco do Brasil were the joint bookrunners on the deal.
