Brazil AirlinesUncategorized

All Brazilian Airlines, LATAM, Azul and GOL in serious financial risk

Brazil major Airlines are suffering the consequences of the worse crisis the industry has ever seen, “many times worse than September 11”, according to some airline’s executives.

Because of the massive cancelations that all carriers were forced to do, in some cases like 90% of their flights, some carriers are in some serious financial situation, and their future might be at risk, unless the government intervenes with low interest loans, tax breaks and lines of credit to keep the Brazilian Airlines afloat.

Given the consolidation that happened in the industry in the last decade, particularly with LAN Airlines, a Chilean company, acquiring Brazil’s largest Airline at the time, TAM Airlines, and selling that to the public as a “merger” to gain regulatory approval, now it will be very interesting to see what Brazil’s government officials will do, now that LATAM is a Chilean owned company, with most of its flights inside Brazil.

Another interesting situation is that of Azul Airlines. Started by David Neeleman, the  founder of several airlines in the United States like Jet Blue, Neeleman holds a Brazilian Passport, so the law allowed him to own a carrier, which he started with foreign investor’s money.

Nowadays, Azul has become a major player in Brazilian Aviation, employing thousands of Brazilians, but still managed by US Nationals.

We should see a lot of moves in the Brazilian Aviation industry in the coming months.