Brazil aviation outlook: positive trends and Azul still opportunistic

Brazil's two largest domestic airlines - GOL and LATAM Airlines Brazil - have reasonably solid outlooks for their performance in the country during 2019 as the country marches toward an economic recovery.

Uncertainty remains over the fate of Brazil's fourth largest airline, Avianca Brazil. The airline sought bankruptcy protection in late 2018, and recently Brazil's third largest airline Azul stated that it had entered a non-binding agreement to acquire some of Avianca Brazil's assets - aircraft and slots at some of Brazil's key airports.

If those plans materialise, capacity rationalisation should be maintained in Brazil's domestic market; however GOL and LATAM could find a formidable competitor in some key airports in Brazil. Azul has a track record of making opportunistic acquisitions to accelerate its position in Brazil's domestic market - the largest in Latin America.