Jazz formalises $15m investment in Pluna

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Following months of speculation that it would take a stake in Uruguay's Pluna, Jazz Air has officially declared its intention to invest $15 million in the Latin American carrier.

Exploratory talks between Jazz and Pluna were held as far back as 2008, and in February of this year local Uruguayan publications reported that Jazz was close to finalising an agreement to take a 25% stake in Pluna.

Jazz is specifically investing in the Latin American Regional Aviation Holding Corp., for a roughly 33% non-voting equity interest in Pluna.

Once the agreement is closed the holding company will have an indirect 75% equity interest in Pluna and the Uruguayan government will indirectly hold the remaining 25%.

Additionally, the Uruguayan government has agreed to invest an additional $5 million in Pluna to fund the carrier's growth, says Jazz.

Earlier this month Pluna confirmed an order for thee Bombardier CRJ900 aircraft, and said it was also considering the operation of the smaller 50-seat CRJ200 model. Pluna currently operates six CRJ900s from a previous order placed with Bombardier.

"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," says Jazz CEO Joseph Randell. Jazz says that Pluna's target market represents a 2,500km (1,553 mile) radius around Uruguay's capital of Montevideo that encompasses more than 150 million people and roughly 30 cities.

Randell says Montevideo is a key component for Pluna's future success "as it provides excellent connecting passenger facilities".

To aid Pluna in executing its business strategy Jazz is sending a staffer from its operations team to serve as part of Pluna's senior management for one year.