(Adds comment from Azul CEO John Rodgerson, share performance)
By Aluisio Alves
SAO PAULO, Jan 14 (Reuters) - Brazil's third-largest airline, Azul SA, said on Tuesday it will buy regional carrier Two Flex for 123 million reais ($30 million), as it aims to expand its presence at Sao Paulo's hotly disputed domestic airport.
Two Flex holds departure and landing rights, known as slots, at the Congonhas airport in South America's biggest city, where bigger rivals LATAM Airlines Group and Gol Linhas Aereas have long had an overwhelming presence.
The acquisition, reported by Reuters earlier on Tuesday, may help Azul to grow its footprint there, pending approval from Brazil's aviation regulator ANAC.
Azul shares rose 1.5% in Sao Paulo to close at an all-time high of 59.19 reais.
Chief Executive John Rodgerson said in an interview that he hopes to use Two Flex's slots to operate larger aircraft than the small regional carrier currently flies. Two Flex uses 14 slots on a secondary runway at Congonhas to fly Cessna Caravan planes seating just nine passengers.
However, Azul says it can use the same runway to fly its ATR 72-600 aicraft, carrying 70 passengers and providing a big boost in capacity at the crowded airport. Rodgerson said such a shift would require ANAC approval.
Congonhas is an especially busy airport due to its proximity to Sao Paulo's business districts. Azul began making gradual inroads there last year, after getting several slots previously held by Avianca Brasil, which ended operations in May.
Two Flex operates a fleet of 17 Cessna Caravan planes.
$1 = 4.1365 reais Reporting by Aluisio Alves in Sao Paulo Writing by Marcelo Rochabrun Editing by Matthew Lewis and Leslie Adler