TRIP Linhas Aereas
- IATA Code
- ICAO Code
- Main hub
- Belo Horizonte Tancredo Neves International Airport
- Business model
TRIP (Transporte Aéreo Regional do Interior Paulista) Linhas Aéreas is a Brazilian regional airline with its main base at Guarulhos International and Viracopos-Campinas International airports in São Paulo. TRIP was founded in 1998 by the Caprioli Group, a bus and tourism company, and targets Brazil’s large, yet underpenetrated, secondary and leisure markets.
On 28-May-2012 TRIP was purchased by Azul creating the holding Azul Trip.
Location of TRIP Linhas Aereas main hub (Belo Horizonte Tancredo Neves International Airport)
170 total articles
28 total articles
Brazil’s third largest airline Azul begins 2014 armed with the final regulatory approval of its merger integration with Brazilian regional carrier TRIP and the possibility of undertaking a public offering after shelving plans for an IPO during 2013.
Even as Azul continues to chart a steady course of growth, it does face some headwinds in 2014 as its recent declaration to cap fares for the upcoming Jun-2014 World Cup will result in a revenue hit of BRL20 million (USD8.4 million). The projected loss occurs as Brazil’s economy remains weak, which has resulted in depressed demand in the country’s domestic market during the past year.
Similar to Mexico, hopes are high that Brazil’s economy will undergo a rebound during 2014. But that does not necessarily translate into a rebound in demand as some cost conscious travellers may choose to hold onto their discretionary income until they conclude an economic recovery is well underway. Those dynamics will certainly play a role in Azul’s evaluation of whether to access public markets for a capital injection.
Brazil’s domestic market has cooled down along with the country’s slumping economy, recording RPK growth of less than 0.1% in 1H2013. While growth should return in 2H2013 it will be very modest and far below previous levels.
Brazil was one of the world’s fastest growing domestic markets in 2010 and 2011, when domestic RPK growth of 23.5% and 15.9% was recorded. Growth slowed to 6.8% in 2012 as carriers started to cut capacity and trim back on expansion plans.
Load factors have improved significantly since mid-2012, providing a glimmer of hope that capacity levels are now sustainable following a period of irrational competition. With capacity returning to more rational levels and four airline groups accounting for over 99% of the market following a wave of consolidation, profitability should eventually improve in the world’s fourth largest domestic market.
Azul's IPO is at a challenging time for economic and traffic growth in Brazil - but offers potential
Nearly five years after inaugurating service, Brazilian carrier Azul is capping off its rapid and highly successful growth with a planned initial public offering. Azul, led by former JetBlue founder and chief David Neeleman has quickly built up a position of strength in the domestic market place through a strategic acquisition it executed during 2012 of fellow Brazilian regional carrier TRIP.
The combination helped Azul flesh out its network and build what it hopes is the necessary scale to withstand the changes its has witnessed in the Brazilian market place during its brief history, ranging from significant growth to a slowdown in traffic expansion as the country’s GDP has slowed during the last couple of years.
The timing of the decision by Azul’s management to take the company public is interesting given that Brazil’s second largest carrier Gol recently warned that inflation in Brazil keeps rising and that it is uncertain if the country will attain its projected 2.5% GDP growth during 2012.
But in making its case to potential investors Azul is attempting to make clear distinctions between itself and Gol by citing yield advantages and merger synergies of BRL200 million (USD96 million) to BRL300 million (USD144 million) during 2013.
Weakness in long-haul markets from Brazil continued to pressure LATAM Airlines Group during 1Q2013 as competitive capacity increases triggered depressed loads and unit revenues in its international network. But LATAM’s efforts to restore strength in the Brazilian domestic market and the relative strength in the group’s Spanish speaking companies should help to offset some of the continuing pressure in LATAM’s international network.
The company’s attempts to bolster international service during the last year to offset some of the continuing weakness in the Brazilian domestic market have faltered somewhat due to competitive capacity increases by American and United in the US-Brazil market, and LATAM’s own expansion of supply in the market. The company’s overall capacity increase in its international markets during 1Q2013 was 12.3%.
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.
Gol pledges a financial turnaround as it records a second consecutive annual loss, of USD745 million
Brazil’s second largest carrier Gol was unable to turn its fortunes positive in 2012 and actually widened its loss for the year. Despite its attempts to combat the cooling Brazilian domestic market through marked capacity cuts and turning some of its attention to international services, Gol recorded a BRL447 million (USD222 million) loss for 4Q2012 and a BRL1.5 billion (USD745 million) negative result for the full year.
Gol believes the changes it has made with respect to its domestic supply and various cost-containment schemes should produce a positive operating result for 1Q2013. But the carrier made similar pronouncements during 2012 as it recorded four quarters of unprofitability, so the pressure is mounting on management to put some grit behind a pledged turnaround.
Unlike its major rival TAM, which is now part of the powerful LATAM Airlines Group, Gol does not have the benefit of large network to help it diversify from areas of weakness to more robust regions. Both Gol and TAM during 2012 had to combat softening demand that resulted from Brazil’s slowing economy. During 2012 GDP growth in Brazil was revised down to 2% from 4%, and during 2013 Gol is projecting growth of 2.5% to a maximum of 3%. This compares to GDP growth of approximately 7.5% growth in Brazil during 2010.
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