Brazilian bank BNDES confirms TRIP Embraer funding

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By Rainer Uphoff

Brazilian state-owned development bank BNDES has granted TRIP Linhas Aereas a R$199.2 million ($102.4 million) loan facility covering 85% of the purchase of four Embraer 175 regional jets.

While Embraer sources confirmed last month that BNDES had agreed to finance the TRIP order, the bank had - until now - only informally indicated the possibility of granting TRIP a loan.

BNDES announced in January that it would start financing domestic deals. The TRIP deal, which effectively allows the immediately delivery of the first Embraer 175, is the second domestic fleet finance agreement for BNDES, following Azul's loan for four Embraer 190/195s which was formalised in April.

A BNDES source says that these loan facilities follow the "dual [federal] objectives of consolidating Brazil's regional airline industry as well as giving Embraer the same [financial] support to sale aircraft domestically as it already received internationally".

Benefits for the airlines, the source adds, include availability of finance in a period of global financial difficulties and, because the loan is denominated in Brazilian reais, "isolation" of domestic carriers with local currency income from foreign-exchange risks.

Sao Paulo-based TRIP, which has embarked into a substantial growth programme to complement its fleet of 20 ATR 42 and 72 turboprops with regional jets, was relatively unknown until last year, when US regional carrier SkyWest acquired a minority stake.