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TAM revises domestic market supply and demand guidance

Direct News Source

17-Apr-2012 TAM revises domestic market supply and demand guidance Capacity on the Company's domestic flights should remain flat or even decrease by 2% in 2012 in order to guarantee profitability

TAM Linhas Aéreas has revised its domestic market supply and demand estimates for 2012, in order to ensure that its operations remain profitable. After reassessing the economic scenario, the Company expects the number of available seats on its flights in Brazil to remain flat over 2011 or decrease by up to 2%, while demand should grow by between 7% and 9%.

In January, the Company announced its guidance for the current year, in which it estimated domestic supply as equal to or up to 2% more than last year, with demand moving up by between 8% and 11%. However, after observing the behavior of the market in recent months, it observed an elasticity of demand in relation to ticket prices and consequently decided to make the change announced today.

The other estimates for 2012 remain unchanged, including the fleet plan - the Company still intends to close 2012 with 157 aircraft. The reduction in seat supply on domestic flights will be implemented by reducing the average daily aircraft utilization.

It is also worth noting that demand for international flights remains strong and that TAM is maintaining its guidance of expanding seat supply on its existing routes by between 1% and 3% this year.