Brazilian Airlines Hit By Slowdown

By Doug Gray, Contributing Reporter

RIO DE JANEIRO – Brazil’s airlines registered a 5.47% drop in passengers last month as the global air travel industry continued to suffer the economic crisis. According to figures released by the ANAC National Aviation Agency the total number of seats being made available has, however, increased.

In response TAM President David Barioni was quoted last week as saying that June would see the company reverse their fortunes, and that the worst was over. Basing his prediction on the number of inquiries seen so far this month, it is however a traditionally strong period for the industry as last minute bookings for the forthcoming winter holiday help to bolster figures.

TAM, the country’s leading provider of air travel, has seen its market share drop from almost 50% down to 45% as newcomers Azul and Webjet continue to grow, though the company still dominates international travel with over 85% of overseas flights on Brazilian planes taken on their jets in the last month alone, a 16% increase on this time last year.

The bad news comes as other national airlines continue to struggle to cope with dampening demand for their services. Last week British Airways asked their employees to work for a whole month without pay to take the stress out of their mounting debt.

The company made operating losses of £401 million last year as fuel costs soared and first class customers fell off. This lead many of their fleet off the runways to be remodeled in order to reduce the size of the premium class lounges. Unsurprisingly the workers’ union responded angrily to the request of a ‘month off’ from paying wages. The possibility of strikes with the holiday season around the corner threatens to hit profits still further.

Meanwhile Air France still awaits the full financial implications of the tragedy last month and has announced the first compensation payments to be made to the families of the crash victims of flight 447 from Rio to Paris.

In America, United Airlines has cut their flight capacity by 30%. Other companies have also felt the combined effect of the need to tighten their belts and the extra hit of the swine flu effect, with routes to Mexico hit drastically.

Whilst the number of flights decreases as carriers look for ways to reduce costs, there has yet to be any such problems in Brazil where in fact the country’s carriers appear to be bucking the international trend.

According to statistics from OAG, the world’s leading aviation data business, the total number of seats offered globally in the year to May 2009 dropped off by 2.7% compared with a 3.76% increase by Brazilian companies.

Further good news for air travelers came with the news that the number of delayed and canceled flights is continuing to fall, down to 7.5% having only dipped to under 10% for the first time ever in February of this year. TAM recorded the best record with 6% of flights registered as late compared with 12.6% of Webjet’s.

As the cost of air travel continues to fall in line with new government legislation, the outlook, at least for the customers, seems to be improving.