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Brazil’s National Civil Aviation Agency (ANAC) reports (31-Jul-2012) the following traffic highlights for Jun-2012:
Brazil domestic growth slows in 2012 as Azul-TRIP continues to take market share from Gol
Domestic RPK growth in Brazil slowed to 6.8% in 2012, after growth of 15.9% in 2011 and 23.5% in 2010, and will likely remain in the single digits in 2013 as the country’s two major carriers continue to reduce capacity in response to challenging market conditions. But Brazil’s two other main domestic players, the new Azul-TRIP group and Avianca Brazil, will continue to expand and take market share away from the leading TAM and Gol groups.
Azul-TRIP and Avianca Brazil have each seen market share gains of between 2 and 3ppt over the last year. Their gains have come at the expense of Gol, which has been cutting capacity and struggling financially after acquiring smaller low-cost carrier Webjet. Gol saw its share of the domestic market slip by about 4ppt in 2012 while TAM has been able to keep its share relatively stable despite reducing capacity by lifting its load factors.
Gol shows some signs of financial improvement despite posting a 1Q2013 loss
Brazil’s second largest carrier Gol recorded mixed fortunes during 1Q2013 as its overall losses widened year-over-year but yields and unit revenues improved at what appears to be at the expense of load factor. After recording annual losses for the last two years Gol is hoping an aggressive capacity reduction in the Brazilian domestic market place and a significant reduction in its workforce will help the carrier slowly improve its fortunes.
But Gol faces challenges in achieving its turnaround as company management believes it is uncertain that Brazil will record 2.5% GDP growth in 2013 while inflation is rising. The carrier feels positive about its position heading into the slow season in South America, but the timing of a full recovery for the carrier seems far from uncertain.