Brazil’s domestic traffic shows encouraging growth in early 2014 as capacity remains rational

Traffic in Brazil's domestic market rebounded during the first four months of 2014 as overall capacity growth in the country remained disciplined largely due to continuing restraint from Brazil's two largest airlines TAM and Gol.

Avianca Brazil and Azul continued to grow capacity, as measured by ASKs from Jan-2014 to Apr-2014, as both airlines work to solidify their respective stances in the Brazilian market. But the expansion by those carriers should not result in a state of oversupply.

Despite the hype of the FIFA World Cup tournament held in Brazil beginning in mid-Jun-2014, the country's two largest carriers do not expect any financial benefit from the event, and are bracing for a decrease in traffic and revenues.