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Aviation History
1997
1997 - 0089.PDF
MIR TRANSPORT have to use the distant international airport at Guarulhos — TAM has been able to compete. Designation as a national carrier may remove the need for such tactics, but the technique has attracted attention. "After a lot of training, we have got the stops down to around 1 Omin," says Falco. "Companies from Europe and North America have come out to see how we do it." RioSul has enjoyed similar growth after expanding its operations with the purchase of eight Boeing 737-500s to be operated in con junction with its existing Embraer EMB-12Os and Fokker F27s. Revenue was forecast to exceed $300 million in 1996, after jumping to $231 million in 1995, producing a profit of $20 million. RioSul has also taken over Nordeste and replaced its fleet of ageing 19- seat Embraer Bandeirantes with 30-seat Brasiliasand 737s. RECENT START-UPS Among the new regionals which have started up recently are Panatal Lineas Matogrossenses, which is based in Sao Paulo; Passaredo Lineas Aereas, started by a bus company from Riberao Preto in the heart of Sao Paulo state; Helisul Lineas Aereas, based in Curitiba; and Inter- Brasil Star, a subsidiary of TransBrasil based in Sao Paulo. Most of the airlines look for their own niches and create new markets rather than simply stealing customers from rivals. Consequently, Brasil has not seen any all-out price wars and relatively few routes are operated by more than one carrier. Panatal, for example, identified potential markets in the previously unserved cities of Videira (in the south-eastern state of Santa Caterina), where one of Brazil's largest food producers has a factory, and Mucuri (in Bahia state), home of the cellulose industry. Likewise, Passaredo became the first airline to operate non-stop from Sao Paulo to Vitoria de Conquista, an agricultural centre in the heart of the north-eastern state of Bahia. "If you just stay in one region, it is inviable to have a com petitive company," says Passaredo executive director Ajuari Barros de Melo. NOT ENTIRELY OPEN Brazil's regional-airline system, in fact, is still not completely open, and companies have the right to object to rivals wishing to start new ser vices, which avoids saturation of die main routes and the resulting fare wars. When an airline wants to begin operating a new route, it has to submit an application to die DAC's Air Routes Commission, which general ly meets every Thursday. The commission has 20 members — one from each of die country's 17 airlines plus diree from the DAC. When die application comes before die meeting, die odier airlines are given one week to submit objections. In the third week, die applicant has the right to reply to die objections and, in die fourth week, the DAC gives its verdict. "It's all done on a very high level. Everything is submitted in writing, Passaredo offers cut-price Brasilia flights; Rio-Sul has taken on Nordeste, and given it 737s diere is no arguing," says Barros de Melo. The DAC fixes a fare per route and operators can charge anywhere between 50% and 130% of diat fare. Most airlines charge around 100%, but some, such as TAM, charge die full 130%. Passaredo is one of die few companies to offer cut-price travel. "Our aim is to bring air trans port to regions and people who have not previ ously had access to it," says Barros de Melo. "We don't have luxurious on-board service and we don't have die red carpet. Our services are for small businessmen who would odierwise have a 6h drive on Brazilian roads," he says. Passaredo began operating in July 1995 with two EMB-120s and has since added a diird. "We have a very promising market and we have local town councils asking for us to start a service to dieir town," Barros de Melo says. Panatal, which was predicting revenues of $36 million in 1996 after seeing its income more than triple to $27 million in 1995, concentrates on convenience and targets executives, accord ing to planning director Andre Medrado. "Our flights are geared, for example, to getting exec utives to Sao Paulo early in the morning and enabling diem to fly out on die same day," he says, adding: "There is still a lot of room for growth. Brazil has a lot of towns and cities which have very few flights." Panatal is one of the few Brazilian airlines to operate the Aero International (Regional) ATR- 42, which Medrado says is die most suit able for the country's small city-centre airports. It has three ATR-42-300s, in addition to two Brasilias, and plans to add another two every year. Panatal has 3.5% of the regional market. Helisul was started in early 1995 as a sub sidiary of Helisul Taxi Aereo, an air-taxi compa ny which has been operating for 3 2 years, to take advantage of the boom in regional air travel, says director Jose Alfredo Ribas Oliveira. With five Brasilias and four Bandeirantes, Helisul ser vices 17 cities in the soudi-eastern states of Paran and Santa Caterina. InterBrasil Star, meanwhile, began opera tions in 1995 as a subsidiary of TransBrasil, which was eager to get into the regionalmarket, operating three EMB-120s. InterBrasil, Panatal and Passaredo, meanwhile, are among the airlines to which the DAC has redistributed routes no longer operated by troubled Brazilian regional TABA. RioSul and TAM, along widi regionals Penta Transportes Aereos and Total, have also taken over former TABA routes. SATISFACTORY SET-UP Brazil's regionals agree that they are happier with die current set-up than widi all-out, free- for-all deregulation, saying that die restrictions which stil 1 apply have prevented too many com panies from sprouting and have avoided over loading the country's infrastructure. The October 1996 crash of a TAM Fokker 100 at Congonhas, which killed all 96 people on board and eight on die ground, underlined die over crowding at Sao Paulo's small city-centre and served to highlight die challenges still facingdie country's burgeoning regional airlines. J FLIGHT INTERNATIONAL 8 - 14 January 1997 35
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