Brazil’s domestic aviation market remains stable despite macroeconomic uncertainty

Brazil's domestic airline market appears to remain in a rational state as the country continues to battle economic weakness. Its two largest airlines TAM and Gol are maintaining capacity discipline, which is helping each company's respective performance in the domestic market.

The country's other two main airlines, Avianca Brazil and Azul, are continuing their solid growth trajectories, but their supply expansion and traffic growth appear in line, which does not seem to be triggering a scenario of oversupply within Brazil.

Brazil's economy could take a slight upswing in CY2015 as its GDP growth is forecast at 2.7% versus a more sluggish 1.8% in CY2014, according to estimates from the IMF. If capacity remains rational in the market place, then Brazil's slightly more promising economy should create some positive momentum for the country's airlines.