Brazil traffic grows 11% in June, Azul challenges TAM-Gol duopoly

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Brazil has returned to double digit traffic growth in June as domestic demand grew by 11.3%, exceeding the accumulated growth of just 7.3% in the first half of 2012. Azul, Trip and Avianca Brazil significantly increased their market share, while TAM's and Gol's shares decreased.

According to data provided by Brazil's civil aviation authority ANAC, Brazilian airlines produced 42.134 million revenue passenger kilometres (RPKs) in the first half of 2012, 7.3% more than the same period in 2011. Available seat kilometres (ASKs) grew by 8.5%, leading to a slight drop in the systemwide load factor to 70%.

TAM continues to be the local market leader, but its share fell for the first time in years below the 40% mark as it transported 39.7% of the total passengers, down from 42.7% last year, while Gol posted a similar decrease from 37.5% to 34.1%.

The airlines with the most growth were Avianca Brazil, which nearly doubled its market presence from 2.7% to 5%. Trip, now acquired by Azul, boosted its share from 2.8% to 4.3% while Azul surpassed a 10% share, transporting 10.2% of Brazil's passengers, up from 7.9% in 2012. Webjet, now part of Gol, stayed relatively flat with a 5.9% share, up from 5.4%.

In June, TAM recovered a 41.05% market share it lost during the previous months while Gol's share continued to decline to 33.1%, compared with 37.2% in June 2011. This, however, excludes the 5.4% market share of Webjet.

Avianca Brazil (5.0%), Trip (4.6%) and Azul (10.2%) consolidated their positions, giving the Azul-Trip combination a market share of nearly 15%, enough to challenge the TAM-Gol duopoly which has dominated Brazil for most of the last decade.

The international market is largely unchanged as TAM continues to dominate with its 90.4% market share, while Gol transported the rest. International traffic growth reported by Brazilian carriers was 3.1%.