Brazilian startup Azul Linhas Aereas Brasilias is closing in on a 10% share of Brazilâ€™s domestic traffic, and it appears the majority of these gains come at the expense of the countryâ€™s largest operator, Grupo TAM.
Azul accounted for 9.14%, or 624.9 million revenue passenger kilometers (RPKs), of all domestic traffic in October, according to data from Agencia Nacional de Aviacao Civil (ANAC), Brazilâ€™s civil aviation authority. The gain was a 2.51-percentage-point improvement on the same period last year and outpaced the 1.91-point increase in the carrierâ€™s capacity share, which rose to 6.63%.
This growth was achieved on a major expansion, with capacity increasing 50.9% to 762.5 million available seat kilometers (ASKs) and traffic rising 50.1%. Azulâ€™s load factor, however, dipped about 0.4 points to 82%.
Azulâ€™s growth solidifies the airlineâ€™s position as Brazilâ€™s third-largest operator in a country dominated by TAM and its rival, GOL Linhas Aereas Inteligentes. The next-largest operator, Webjet Linhas Aereas, commanded 5.81% of all traffic in October, up from 5.64%, while operating 5.53% of the countryâ€™s capacity. Webjetâ€™s improvements reflect a lower growth than Azul, with supply rising 18.9% year-on-year to 558.7 million ASKs and traffic 12.1% to 396.8 million RPKS. Webjetâ€™s declined 4.3 points to 71%.
Brazil's fifth-largest operator is now TRIP Linhas Aereas, which boosted its traffic share traffic to 3.8% from 2.1% on a near doubling in demand to 260.1 million RPKs and an 86.6% rise in supply to 409.1 million ASKs. Loads are below those of Azul and Webjet, although at 63.6%, TRIPâ€™s load factor is up 3.5 points from October 2010.
TRIPâ€™s growth pushes(through its purchase of Oceanair) down to sixth place within Brazil, although the carrier still improved its traffic share 1.2 points to 3.7% on roughly the same percentage of supply. Aviancaâ€™s loads also went up, by more than nine points to 80.1% as a 41.4% increase in ASKs to 319 million generated a 59.8% rise in traffic to 255.6 million RPKs.
While Azulâ€™s growth is impressive, the countryâ€™s two giants, TAM and GOL, still command significant portions of Brazilâ€™s domestic market. TAM held 36.6% of total traffic in October and provided about 40.5% of all ASKs, even though this marked year-on-year declines of 3.6 and 4.2 points, respectively. From ANACâ€™s data it is clear why Brazilâ€™s smaller carriers are impinging on TAMâ€™s market share: the carrier added only 2.3% more capacity to the 4 billion ASKs operated in October 2010, and traffic was statistically the same as last October.
TAMâ€™s loads also fell slightly, dropping 1.6 points to 63.6%.
GOLâ€™s 13.1% year-on-year rise in capacity to 3.9 billion ASKs, while generating only 3.5% more traffic and wiping more than six points from October 2010â€™s 71.2% load factor, did help the carrier retain most of its market share, which stood at 37.1% of traffic and 38.4% of supply in October.
TAM and GOL are both in talks with smaller rivals, with TAM close to finalizing an investment in TRIP that will give it a 31% stake in the carrier. GOL, meanwhile, is awaiting regulatory approval for its merger with Webjet.
For international services, TAM continues to cement its role as Brazilâ€™s long-haul operator by adding almost another percentage point to the 87.7% market share held in October 2010 and almost two points to its share of capacity on a 4.3% improvement in RPKs to 2.4 billion and a 6% rise in supply to 2.3 billion ASKs.
GOLâ€™s international market share, meanwhile, fell in October from 12.5% to 10% due to a 17.9% decline in ASKs to 350.7 million and 15.8% fewer RPKs, which dropped to 227 million. New entrant Avianca, which started transborder services in December 2010, held 1.56% of international market share in October and operated 1.46% of all capacity; it flew 40.9 million ASKs in October and posted traffic of 35.4 million RPKs.