Brazil outlook for growth dims as domestic market shrinks in 1Q2013, driven by cuts at Gol

Brazil's domestic market is showing more signs of a slowdown after shrinking by 1% in the first quarter. Load factors are improving, an encouraging sign for profitability, but growth has taken a back seat, driven by the capacity cuts at Gol and TAM.

The country's international market, meanwhile, is showing signs of over-capacity as load factors slipped in 1Q2013. The key Brazil-US market has particularly become over-saturated.

The Brazilian international market will likely post high single digit growth in 2013. The domestic market should also still grow, albeit modestly, for the full year. But Brazil's once red hot aviation sector faces a challenging 2013. As Brazil is by far the largest market in the region, the slowdown will drive down overall Latin America growth figures.