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CAPA TV | September 28, 2020

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Spotlight On Brazil: Brazil’s Domestic Market Seems To Be Showing Signs Of Improvement

CAPA
  • On October 3, 2019

Brazil posed significant challenges for Latin American operators during 2018 because of currency fluctuations and uncertainty driven by the presidential elections. The pressure was largely in international markets – particularly to the US and Europe. LATAM Airlines Group recently said that there had been some rationalisation of capacity between Brazil and the US, but capacity from Brazil to Western Europe remains high. 

Forecasts indicated seats from Brazil to Western Europe would be markedly higher in 2019, and some of that was driven by LATAM’s introduction of flights from Brazil to Rome, Lisbon and Tel Aviv in 2018, and Munich in 2019.  

LATAM appears to be closing in on finalising JVs that it tabled with its fellow oneworld partners American and IAG in 2016. Chile’s antitrust tribunal has approved the arrangements but the country’s Supreme Court is hearing appeals to the decision. Even as those appeals move forward, LATAM appears to have a level of confidence that it can progress with its proposed immunised tie-ups.  

GOL, LATAM and Azul all seem to have a reasonably positive view of Brazil’s domestic market. As 2018 came to a close, LATAM characterised domestic demand as healthy. Most of the country’s largest airlines have managed their capacity rationally and seats in the domestic market, while up slightly in 2018, remain below levels reached in 2012 and 2015.

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