The Brazilian commercial aviation is currently having one of the best recoveries worldwide from the COVID-19 crisis. It closed the year with a more robust demand than March when the pandemic started crippling South American airlines. 

Brazilian recovery

A comparison between January, April, and December seats in Brazil. Photo: ALTA

Looking at the seat recovery

This week, the Latin American & Caribbean Air Transport Association (ALTA) published a few stats about the Brazilian aviation industry. 

In January 2020, Brazil offered 13.9 million seats. Of these, 2.7 million were international eats, while 11.2 were domestic seats, mainly provided by the big three of Brazil: GOL, LATAM, and Azul. 

The Brazilian airlines suffered the worst hit of the COVID-19 crisis during April when the capacity fell by 92% in the domestic market and 94% in the international segment. Nevertheless, unlike other South American countries (Colombia and Argentina, for example), Brazil never fully closed its airspace. It allowed a domestic skeleton route map while forbidding the entrance of international travelers for a few months. 

Eventually, the Brazilian lifted all restrictions. Currently, passengers only need to present a negative RT-PCR test result, and flights or passengers from the UK are not allowed.

Little by little, the Brazilian airlines increased their capacities, and despite the growing number of COVID cases in the country, Brazilians seemed eager to travel again. During the last quarter of 2020, the airlines ramped up their operations significantly due to the incoming summer high season. 

According to ALTA, the Brazilian carriers offered 7.09 million seats at the end of 2020, a 37% decrease compared to January. Meanwhile, the international capacity was more depressed, with a 75% decrease. 

Brazilian recovery

An outlook of the domestic market in Brazil. Photo: ANAC

How about the passengers?

The National Civil Aviation Authority of Brazil (ANAC) recently updated the number of passengers that used the air transport system during 2020. According to ANAC, Brazil received 51.93 million passengers, a 56% decrease compared to the previous year. 

Between GOL, LATAM, and Azul, the three carriers transported over 47 million passengers. GOL led the market with 16.7, then LATAM with 15.8, and Azul with 14.4. 

GOL finished with a 38.1% domestic market share. LATAM held a 33.7% domestic market share, and Azul a 27.7%. 

Nevertheless, Azul held a stronger position than LATAM in the later months of 2020. In 2020’s fourth quarter, Azul increased its market share to 31.91%. The airline, founded by David Neeleman, has soared thanks to its point to point connectivity, unmatched by its competitors. 

Brazilian recovery

Photo: ForwardKeys

What can we expect going forward?

The company ForwardKeys released its six-month outlook for travel in key domestic markets. It specifically looked at current issued tickets. 

Brazil is sixth in the top ten worldwide with issued tickets at 57% of 2020 levels for the first half of 2021. Leonardo Seabra, head of Intelligence at Emprotur, a touristic promotion company in the country, said,

“The performance of the Brazilian domestic market is due to a combination of factors. “[These include] the desire to travel after a long period at home, restrictions on that causes travelers to adapt their plans by choosing destinations within the country, and the restoration of the supply of available seats and connectivity, which accelerated in the last quarter of 2020.”

Brazilian recovery

An outlook of the average fare in Brazil throughout the last 18 years. Photo: ANAC

Final analysis

The Brazilian market is soaring thanks to a stronger passenger desire to travel, as well as the high season. 

Financially, we still have to see the big three 4Q results to see how much their revenues dropped. According to ANAC, in 2020, the average fare dropped to its lowest levels in the last 18 years. The average fare was 367.52 reais ($67.40). 

We also still need to see how the Brazilian airlines behave when the high season ends. Internationally, the recovery will be much slower due to the increasingly restrictive measures taken by many Brazilian neighbors, as well as the possible quarantine measures imposed by the US. 

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