Market Conditions Drive International Airlines Away from Brazil, Says Airbus
Complicated market conditions have prevented foreign airlines from launching local operations in Brazil, according to Airbus' head in the country. Despite changes in 2018 that allowed foreign investors to hold larger stakes in Brazilian airlines, the market is still dominated by Azul, Gol, and LATAM.
Gilberto Peralta, an Airbus executive, in an interview last week, explained the reluctance of international airlines to enter Brazil. He cited judicial uncertainty and high fuel prices as major reasons. “Capital barriers are gone, a foreigner could come and set up a company in Brazil, but they don’t… It’s a lot of trouble,” he said.
Strong Consumer Protections
Brazil’s consumer protections are strong, making it easy for flyers to sue airlines for problems such as delayed or canceled flights. Late last year, IATA, an airline lobby group, urged Petrobras to cut fuel costs, calling jet fuel prices in Brazil “excessively high.” Petrobras recently said that jet fuel prices have fallen 8.8% so far in 2024.
Airbus’ Production Capacity
Airbus currently produces between 60 and 65 aircraft per month and aims to increase this to 75 planes per month by late 2025 or early 2026. Most orders come from Asia, the U.S., and Europe. In Brazil, Azul and LATAM have ordered more than 100 aircraft in the coming years.
Boeing’s Quality Crisis
When asked about the quality issues faced by fellow plane maker Boeing, which has delayed aircraft deliveries, Peralta expressed hope for stabilization. “I’m sure they’ll fix it… that’s not good for the market, as it creates insecurity and generates concern among users,” he said.
($1 = 5.4236 reais)
