Challenges and Trends Of Aviation In Brazil
Over the past two months, I've had the pleasure of engaging in a challenging project proposed by IBS Software, a leading company in SaaS solutions for the aviation, cruise and hospitality industries. I interviewed some of the most important players in Brazilian aviation to produce an comprehensive view of the sector, bringing to light the challenges and opportunities of this important industry of the Brazilian economy. There were more than 30 interviews, and that was how the report – Challenges and Trends in Aviation in Brazil - was born, presenting the current aviation industry agenda and understanding how to face the opportunities ahead. Below I highlight some of the information that most caught my attention. If you want to download the entire document, click here.
It is important to bear in mind that this report aims to contribute to the sector by highlighting different opinions. The results indicate the important advances in aviation since its start more than a century ago, with challenges and opportunities that arise as the sector grows and strengthens in Brazil.
Among the advances, the growing recognition of the importance of aviation stands out, not only as a means of transportation but due to its social role in integrating the immense national territory, including in regions with difficult or no access except by air.
From the 1990s onwards, thanks to progressive market deregulation, tariff, and route freedom, the use of airplanes became democratized, allowing, in 2019, the record of 95 million passengers. The movement was interrupted in 2020 and 2021 by the pandemic, with a severe drop in air travel in Brazil and the world. In 2022, the sector is showing clear signs of recovery, with rates already close to those existing in the pre-COVID phase. At the three largest airlines (LATAM, GOL and Azul), the utilization rate reached 79.5% between January and September 2022, an increase of 28.6% compared to 2021. Excellent punctuality and regularity rates are also worth mentioning.
Airport concession programs already reach 59 of the 133 federal airports. Investments in the order of US 2.4billion over ten years have already produced evident improvements in infrastructure and user service. Cargo also benefited: from January to August 2022, 1 million tons were transported through Brazilian air terminals.
Among the challenges are the high costs of the operation, 51% of them calculated in dollars. Attention is drawn to the high price of fuel (JET A), 30 to 40% more expensive in Brazil, which is reflected in the final ticket price. The excessive judicialization of complaints also requires attention, as well as correcting the operational and price imbalance caused by COVID.
There is great potential for growth, such as expanding the presence of regional aviation, which is vital for expanding the network, but it requires attracting investments both in exploring new routes and aircraft adequate to demand any concession of airports in the interior. In this process, Tourism would also benefit greatly.
About the author:
Fabio, a travel and tourism journalist writes at www.steinberg.com.br. and is a contributor to several publications. He is the author of three books: Real Fictions (Fiction), Business Trips (Journalism) and The Maestro (Biography). He worked in Public Relations and Communication at IBM, AT&T, Hill & Knowlton and TV Globo, and was a consultant in corporate communications for large companies.
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