Air Transport

Officials with Brazilian carrier TAM today told investors that neither the July 17 accident at Sao Paulo’s Congonhas International Airport nor the mandated restrictions pertaining to the airport will impact strong July load factors.

During a conference call earlier today, TAM CFO Libano Mirando Barroso said domestic and international load factors as of yesterday were holding at 75%, the same as for the first part of the month. "We don’t envision any impact on bookings from the accident or related to the new announcements," says Barroso.

The mandate, issued by Brazil’s civil aviation ministry yesterday, gives airlines 60 days to move all connecting flights from Congonhas; limits the maximum number of takeoff slots at the airport to 33 per hour, down from 46 presently; prohibits business aviation or charter flights from using the airport; prevents any new international flights from being approved for both of Sao Paulo’s international airports, and gives government aviation officials 90 days to complete site study for third airport in the region.

Barroso says about 25% of TAM’s flights at Congonhas are connecting flights, somewhat less than TAM’s system-wide ratio of 30% to 35% for its 640 daily flights.

The carrier is already testing ways to move connecting flights to Guarulhos International Airport, Sao Paulo’s other international airport, and will have additional counter space in place before the 60-day deadline arrives, says Barroso.

Regarding the reduction in slot limits, Barroso says the prohibition of business and charter flights will reduce the impact on commercial carriers and that TAM will mitigate the impact by concentrating its Congonhas service on business flights over leisure, as 75% of its passengers travel for business.

TAM’s two newly awarded international flights, one to Madrid and one to Frankfurt, will likely be operated out of Rio de Janeiro or other outlying airports, creating a need for a domestic link to move passenger to those locations from the Sao Paulo area, says Barroso.

Of the Airbus A320 crash, Barroso said the aircraft, delivered to the airline in December, was in "perfect condition of maintenance and operations" and "in compliance" with manuals from Airbus and the Brazilian aviation authorities. He said the crew had been "in total compliance with international standards" during the flight.

TAM flight JJ3054, coming from Porto Alegre, overran the Congonhas runway, killing all 186 passengers and crew and an unknown number in buildings on the ground.

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