January 28, 2020 / 2:26 PM / a month ago

UPDATE 1-Airline Azul hopes to sublease Embraer jets to airline tied to founder Neeleman

(Recasts and adds details about Breeze)

SAO PAULO, Jan 28 (Reuters) - Brazilian airline Azul SA said on Tuesday it has signed preliminary contracts to sublease its entire Embraer E195 fleet, with more than half going to an airline tied to founder David Neeleman.

Neeleman, the founder of Azul, JetBlue and a startup called Breeze Aviation in the United States, will receive up to 28 Embraer E195s subject to certain approvals, Azul said.

A Polish airline called LOT would sublease the remaining aircraft, subject to certain confirmations.

Azul has a total of 53 Embraer E195 planes.

The agreements were good news for Azul, which has been looking to do away with its older Embraer planes as it transitions to a newer generation of jets that is more fuel efficient.

Shares were up 2.5% in São Paulo on Tuesday morning.

Azul and LOT have already signed a letter of intent to sub-lease 18 aircraft, and tentatively another 14 planes subject to LOT approvals, according to a securities filing.

Breeze is expected to lease up to 28 airplanes subject to Azul shareholder approval, the filing said. (Reporting by Ana Mano and Marcelo Rochabrun; editing by Jason Neely and Bernadette Baum)

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