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August 1, 2011 / oneworld82

Brazil – A booming market

I recently stumbled upon a very interesting article published by the airline industry’s analytic firm about the state of the South American airline market. The article points out how Brazil is the hot market in the region, propelled by the fast growth of its economy and with the favorable prospects of hosting the World Cup in 2014 and the Summer Olympics in 2016.

One important data point is that 7 of the top 10 Latin American airports are located in Brazil. Sao Paulo’s Garulhos and Congonhas lead the chart, followed by Brasilia and Rio de Janeiro. Mexico City is the only non-Brazilian airport in the top 5. Another interesting data point shows how GOL/Varig and TAM have both approximately 1,000,000 available weekly seats on departing flights, more than double the amount available for LAN, which comes a far 3rd. Mexico, a vast country itself, only has a size 25% the one of Brazil.

These interesting data definitely show how any airline that is serious about expanding in developing and hot markets must consider flying to Brazil. An increasing number of Asian airlines is doing exactly so, with Air China launching a staggering Beijing-Sao Paulo route via Madrid and Singapore Airlines a super long-haul Singapore-Sao Paulo via Barcelona. On the US side, American Airlines reaffirmed its leadership in direct routes between the US and Brazil with a non-stop Miami – Brasilia flight, with also Belo Horizonte, Sao Paulo Garulhos, Rio de Janeiro, Salvador de Bahia, and Recife served with non-stop flights.

On the other hand, Brazil is facing a serious problem with its underdeveloped airports, many of which face overcrowding issues. As highlighted by a McKinsey study and by Transport minister Orlando Silva not long ago, the airport infrastructure of the country needs to be upgraded in time for the World Cup of 2014, during which an additional 6,000,000 passengers are expected to be transiting through their gates. Overall, a 24% increase in passenger traffic between 2009 and 2014 is expected nationwide, which prompted the government to invest almost $4 billion USD to upgrade its aged airports. Whether these investments will prove enough and whether they will be completed in time remains to be seen.

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