A recent article on O Globo shows how the aviation industry in Brazil is going from bad to worse. This article that The Local tells you a little bit about down here is the first of a series of articles about how Brazil is a country where nothing really moves forward. The country with its huge taxes and bad services keep any kind of business from flourishing.
From 2003 to 2012, the domestic flights tripled, driven by rising wages, the credit facility, the real appreciation and drop in rates. Today, the scenario is exactly the opposite, with the weak economy, rising interest rates and high dollar, which has pushed the cost of tickets.
The official indicator of the National Civil Aviation Agency (ANAC) to measure the demand of the industry, the most widely used in the aviation industry worldwide, is called the RPK, which multiplies the number of passengers by the kilometers flown.
For this indicator, Brazil closed 2012 with 87 billion passenger-kilometers flown, an increase of 234% over 2003.
The main reason for the stagnation is reducing the number of flights. In the first seven months of the year, the offer fell 5.11% over the same period last year.
The decrease reflects the policy of TAM and Gol, which hold 75% of the market. Both are cutting flights less profitable to raise its occupancy rate. The idea is that planes fly less and fuller, reducing fuel consumption and increasing revenue per flight.
This scenario happens in a country that is right now trying to bring people to see the World Cup and The Olympics but with prices this high for flying, if I were you, I would stay far away from going to Brazil anytime soon. I have never travelled inside Brazil on empty flights so I can only imagine how they are going to be now with fewer flight options. Not only the flights are full, but the airports haven’t changed one bit. So expect long lines, expect delays and expect frustration.