Rio is a focus for future airline expansion and infrastructure upgrades. Image courtesy of TAM.
Brazil Comparative distances: Brazil–US and US–Europe LHR JFK CDG
MIA
Miles Km RIO SAO
$6 billion in annual revenue with a fl eet of 150 mainline jet aircraft, mostly Airbus models, and its American Depositary Receipts (ADRs) are traded on the New York Stock Exchange with a market cap of $3.6 billion.
However, by far the biggest news coming from TAM in 2010 was its tentative merger agreement with
LAN Airlines, which is based in Santiago, Chile, with passenger subsidiaries in Argentina, Peru and Columbia, where it recently acquired the Columbian airline Aires.
Before regulations were eased in 1990, Brazil’s aviation market was dominated by fl ag carrier Varig as well as the privatised and growing VASP and Transbrasil. The far more robust TAM and Gol, and the still small but fast-growing low-cost carrier Azul, have now replaced those Brazilian carriers. TAM is a big airline, although it is nowhere near the size of United, Delta or American. TAM generates more than
www.routesonline.com
The US–Brazil Open Skies Agreement is a vote of confi dence in the South American country’s aviation sector and its international competitiveness. Aggregate worldwide airline passenger capacity (Scheduled Seat Departures, OAG FACTS Report) has grown 25% over the past 10 years, from January 2001 to January 2011. Brazil’s domestic capacity for the same period has increased by 78% and its international capacity by 64%.
By comparison, seat departures in the mature US domestic market have dropped 22% in 10 years while international seats are up just 7%. However, the US domestic market is more than six times as large as Brazil’s and its international market is more than nine times that of its Latin American counterpart. Despite this, growth is clearly on Brazil’s side.
American Airlines and TAM dominate the Brazil–US passenger air service market, with 35% and 29% of scheduled seats respectively.
Most of the remaining capacity is operated by the other major US airlines – United/Continental (17%) and Delta (15%), plus a daily fl ight by US Airways (3%). Most of the Brazil–US traffi c is true Brazil origin and destination because the location is poor for other South America– US traffi c.
The LAN and TAM combination, which is to be named LATAM, will be by far the largest airline in South America, with a strong presence across the continent. The combined operations include non-stop
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RIO-MIA 4,168 6,708 SAO-MIA 4,072 6,553 LHR-JFK 3,451 5,554 CDG-JFK 3,635 5,850
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