El Jazzo!!!

[Black Cat]

Jazz Air Income Fund announces equity investment in South American regional airline, Pluna S.A.

Second-fastest growing air travel market in the world

HALIFAX, April 26 /CNW/ - Jazz Air Income Fund (TSX: JAZ.UN, 'Jazz') announced today that it has agreed to invest $15 million (USD) in Latin American Regional Aviation Holding Corp. ('LARAH') in return for a 33 1/3% non-voting equity interest in the company. At the time of closing of Jazz's investment, LARAH will hold an indirect 75% equity interest in Pluna Lineas Aéreas Uruguayas S.A. ("Pluna"). The remaining 25% equity interest in Pluna is held, indirectly, by the Government of Uruguay. Jazz's $15 million USD investment, together with an additional $5 million USD which the Government of Uruguay has agreed to invest, will be used by Pluna to complete the business restructuring and to fund growth. The completion of Jazz's investment is subject to a number of closing conditions, including certain conditions relating to actions to be taken by the Government of Uruguay in connection with Jazz's investment. At closing, a Jazz representative will be appointed to the 7 member board of directors of Pluna.

Pluna is Uruguay's flagship airline and is headquartered in Montevideo. The airline is a private company and currently operates 6 CRJ 900 NextGen aircraft with 90-seat configuration to destinations in Uruguay, Argentina, Brazil, Chile and Paraguay. Pluna announced on April 14, 2010 that it has signed a follow-on firm order with Bombardier Aerospace for three additional CRJ900 NextGen regional jets and has taken options on an additional six CRJ900 NextGen aircraft. Pluna's target market, represented by a 2,500 km radius semi-circle around Montevideo, encompasses approximately 150 million people and more than 30 cities, each with a population of over 500,000 people.

"This investment provides the potential for significant returns for Jazz," said Joseph Randell, President and Chief Executive Officer, Jazz Air LP. "The South American air travel market is one of the world's fastest growing and this investment provides Jazz with an exciting opportunity to participate in that growth. We chose to invest in Pluna because we see the value and opportunity in the niche markets they serve, and we believe they have a solid business plan. The new, state-of-the-art airport terminal in Montevideo; Pluna's main hub, is a key component to the airline's future success as it provides excellent connecting passenger facilities. Further, Pluna's service extends beyond Uruguay to Argentina, Brazil, Chile and Paraguay and seeks to realize upon the growth potential in those markets. Jazz and Pluna have a common fleet type in the CRJ705/900 series regional jet, and both operate as regional carriers. We anticipate that our involvement with Pluna will produce other synergies that have the potential to create additional opportunities to generate value."

"Jazz has spent the last three years seriously considering and evaluating opportunities for diversification and growth, and we believe this transaction is another solid step in this direction," continued Mr. Randell. "Our recently announced new partnership with Thomas Cook Canada and the future addition of new Q400 NextGen turboprops that we'll fly on behalf of Air Canada, were the initial steps taken to broaden our horizons. We're confident in the Pluna team - the calibre of this group is second to none and we have great chemistry. We're also grateful for the tremendous support we've received thus far from the Government of Uruguay and other interested parties."

"We are very excited about this new partnership with Jazz," said Matias Campiani, Chief Executive Officer of Pluna. "Not only will this investment facilitate our growth plans, we believe that Jazz's operational expertise and experience will enable Pluna to realize upon synergies that will strengthen our business."

To assist our new partner with their growth plans and operations, a Jazz employee with significant operational experience is being seconded to Pluna for a minimum of one year as part of their senior management team. Cash distributions by the Jazz Air Income Fund are not affected by this development; funding for the investment is provided through general working capital.

http://www.newswire.ca/en/releases/arch ... c5503.html

[Panama Jack]

In all seriousness, it is great to see Canadian companies taking an interest in a part of the world posed to experience some of the most significant growth (after the Asia Pacific region). The company has come a long way.

On a much lighter note (sorry, I couldn't help it), I wonder whether Joe is humming this song (the earworm chorus comes 1:00 minute into the video)? Fiesta, Fiesta!!! PLUNA PLUNA G.......

http://www.youtube.com/watch?v=IqxumHvUkWw

[yycflyguy]

LOL. Damn you Jack. Now I will have that in my head all day. Marica tu! Marica yo, marica ah ah. Pluma pluma Gay!

I think I saw you at 1:35 of the video. Was this filmed at the last Jazz Christmas party?

[scopiton]

I think I saw you at 1:35 of the video.

+1
nice hat Panama Jack

[aerodude]

That is great news and great initiative! Just remember this incase in next contract negociations, they tell you they don't have extra money to give employees because their income statement is showing less cash flow/profit because of the funds allocated to this. Not bad mouthing any bean counter at Jazz or any airline but there's more to it than just investing in another airline.

[Panama Jack]

One would think that Jazz did their homework before launching into this deal. Indeed, Pluna has some good management and is on-track through a massive turn-around from being a basket-case, formerly Gov't-owned Flag carrier to something which seems to have a real shot of being successful during the last couple of years. Two years ago, when I flew on the airline from Madrid to Montevideo, the airline had a small mixed fleet of Boeing 767's, 757's and 737's. It now only operates CRJ 900's. Pluna now concentrates on being a dominant regional carrier counting on code shares with Iberia and American for long-haul feed.

Here is a very good article interviewing Pluna's CEO, Matias Campiani (8 December 2008):

http://www.flightglobal.com/articles/20 ... -flag.html

[Jack Klumpus]

EDITED

[Mustang06]

Pluna have the worse management team I’ve ever seen.
They are corrupted to the bones and they don’t have any respect for their employees.
They don’t have a formal policy to select pilots, if you are not part of the club they won’t hire you, doesn’t matter your experience and hours.
They took money from government to make an excellent deal for them, and at the end it’s the people who will pay with their taxes. For several months they didn’t pay the fuel, it was the government who constantly finance them.
Believe me, there are way more serious companies in South America to do business (LAN,TAM), not this one.
These guys from Leadgate (an invention from Mr. Campiani and some friends during a barbecue in Europe) will not last, they will take the money and they will leave, believe me.
I can’t believe that a serious company like Jazz is doing business with these guys……

Mustang.
http://plunaleadgate.wordpress.com/2008 ... llo-world/

[GTFA]

Pluna have the worse management team I’ve ever seen.
They are corrupted to the bones and they don’t have any respect for their employees.
...
I can’t believe that a serious company like Jazz is doing business with these guys……

Mustang.

Well Maybe a serious company like Jazz is making a serious investment in order to turn Pluna into a serious airline and make some serious money.

The aviation world is changing.
GTFA

[Mustang06]

You still believe in Santa?