Brazil-Portugal aviation: more growth will flow from new MoU

On 28-Jun-2019 Portugal and Brazil signed an MoU, liberalising their air services agreement. The MoU eliminates capacity and tariff restrictions on air passengers and cargo between the two countries. Designated airlines can offer international flights to any destination in both countries and have wide freedom to establish codeshares. They can also connect to third countries using fifth freedom rights.

For Brazil, the agreement adds Portugal to a list of similar deals recently negotiated with other European countries: UK, Spain, Netherlands, Denmark, Greece, Sweden, Luxembourg and Finland.

Led by TAP Air Portugal, airlines in the Portugal-Brazil market have driven strong growth recently. TAP has wet leased a Wamos Air A330 aircraft to address European summer 2019 demand on routes to Fortaleza, Natal and Belém. TAP has increased its frequency on Lisbon-São Paulo from 18 weekly to three times daily and on Lisbon-Belém and Porto-São Paulo from twice to three times weekly.

TAP's commercial partner Azul took over Lisbon-Campinas from it in 2016 and launched Porto-Campinas in Jun-2019. A small competitive dimension came into this market in Sep-2018, when LATAM entered Lisbon-São Paulo. It plans to increase its frequency from six times weekly to daily in Oct-2019.

Portugal-Brazil looks set for further growth.