Brazil's New Order Sweeps In
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Day 1 – Wednesday/Thursday DAILY BRINGING YOU THE NEWS FROM THE ALTA LATIN AMERICAN AIRLINE LEADERS FORUM AT CaNCUN – 29 NOVEMBER ALTA Daily sponsored by CFM International Brazil's new order sweeps in THE POSSIBILITY THAT VARIG may soon receive its air operating certificate (AOC) and restore some of its routes will not reverse the sea change that has already taken place in Brazil's airline sector. TAM has replaced Varig as Brazil's leading carrier, both on domestic and international routes, with a market share of 51% and 55% respectively, while low-cost Gol has grown rapidly to grab 37% of the home market. Under a deal hammered out between new Varig, Brazil's bank- ruptcy court, and the two agen- cies that regulate commercial aviation, the airline hopes to ob- tain its AOC in the first week of December. Delays in obtaining L O the AOC have frustrated Varig be- G cause it cannot order new aircraft without it. It is currently operat- has become a significant overseas ing on old Varig’s AOC. player operating Boeing 767s on ALTA Forum raises the bar This has complicated Varig's its new routes to Lisbon, Madrid, With more than 400 delegates and an array of senior figures from efforts to revive dormant routes and Milan. across airline and government ranks, the Latin American Airline Leaders that Brazil’s civil aviation agency Leadership in Brazil has passed Forum has risen in just three years to become the most important gath- ANAC threatens to reallocate be- to a new generation of airlines ering for the region’s air transport industry. cause Varig is not using them. that are listed on overseas capi- According to ALTA executive director Alex de Gunten, the event is a The agreed deadlines for Varig tal markets, use the internet for sell-out as demand for places has been so strong. to revive dormant routes are mid- ticket distribution and have been There are some 50 airlines present here in Cancun with some 35 rep- December for domestic routes and growing as fast as they can ex- resented either by their chief executive, president or board chairman. mid-February for international. pand their fleets. In addition, for the first time, ALTA has invited directors of civil aviation A year ago Varig and TAM But the new order are not hav- from several countries, with 12 confirmed just prior to the event. were Brazil's only international ing it all their own way. A work- ALTA has become increasingly proactive in representing the interests carriers. Now there are five. In the to-rule by air traffic controllers of Latin carriers at national level. “There is still a lot of misinformation past several months TAM, Gol, since late October has caused about Latin America and this event has an important role in highlight- BRA, and Oceanair have gained severe delays and flight cancel- ing the positive things going on here, while at the same time noting almost 100 domestic routes. BRA lations. The impact of the action that we still have a long way to go,” says de Gunten. has led Gol to slightly lower its Keynote speakers at this week’s forum include former US 116427_fl_LatAmtrip_adConference Agenda 15/11/06revenue 12:11expectations Page for 1this year Transportation Department secretary Norman Mineta, who will discuss the see pages 6 and 7 and trim its operating profit mar- future of US aviation policy, and Iberia’s chief executive Fernando Conte. gin from 26-28% to 23%. ■ Know LatAm airlines inside out Thousands of air transport executives use ATI every day to help them •get in-depth Airline financials, fleets and orders, management contact lists, traffic analysis •access the latest news on start-ups, LCCs, expanding airlines and bankruptcies Visit the Flight stand or contact [email protected] for access today. LET’S FACE IT, LOOKALIKES NEVER PERFORM QUITE LIKE THE ORIGINAL. When it comes to replacement engine parts, it’s all the more important to insist on the real thing. 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To see a genuine performer, go to www.cfm56.com CFM, CFM56 and the CFM logo are all trademarks of CFM International, a 50/50 joint company of Snecma and General Electric Co. alto-nov-29-06-p002 1 23/11/06 3:13:47 pm FOCUS Distribution by CFM International ALTA's man with a mission OvER THE PAST THREE YEARS and Caribbean Star joining. in international capacity, says de Latin America’s Airline Associa- ALTA continues to lobby those Gunten. tion ALTA has been transformed, countries that are over taxing the At the practical level, ALTA has growing in confidence and effec- industry and still view airlines as been active in bringing carriers tiveness to give the region’s dy- a form of cash cow. “Some still together to help save money by namic airline industry a body that haven’t recognised the value of joint fuel negotiations, says de is working at all levels in their best the industry in terms of its eco- Gunten. The association is also interests. nomic development and tourism working in other areas like main- For Alex de Gunten, the former benefits,” says de Gunten. tenance to assist carriers with joint Orbitz Latin America, LANChile The region is still highly frag- spare parts negotiations. “These and Canadian Airlines executive, mented which puts up barriers initiatives are producing real cash it has been a three-year mission to carriers becoming more effi- benefits already,” he says. ■ given to him by his board, with cient, he says. However, there are their support, to make ALTA rele- Alex de Gunten – growing ALTA some carriers, such as Copa, LAN vant once more. “The board want- and the Synergy Group, that have COPA DOUBLES ed change,” he says. “We are all a team of industry experts to been good at adapting to the re- Copa is probably the biggest very much focused on results.” run its expanding programme of strictive regulatory environment. beneficiary of a new accord In this time ALTA membership projects, says de Gunten. One of ALTA’s main efforts is in between Panama and Argentina has risen from 16 to 33 carriers. Moreover, ALTA is one of the trying to persuade governments to increase weekly flights from Only one carrier has left, and that few regional airline associations to really work on integrating the 7 to 14. was because it went bust. Mem- to include low-cost carriers in region’s air transport industry. Because of its growing use of bership has also been expanded its membership, with Gol, Click While the region has had its fair sixth freedoms, Copa will be able to allow affiliate members, the and Volaris all members. In ad- share of struggling carriers, traffic to feed traffic behind or beyond association has obtained a new dition, it is now a broader-based for ALTA members has grown by its Panama City hub into twice as name and brand to represent its organisation with carriers from 12% over the past two years, and many Buenos Aires flights. new focus, and it has recruited the Caribbean like Air Jamaica there is in fact a serious shortfall 0SMBOEP*OUFSOBUJPOBM"JSQPSUJTVOJRVFXJUIBDBUDINFOUBSFBPGNJMMJPOQFPQMF .$0 JTCFDPNJOHPOFPGUIFIPUUFTUBJSQPSUTJOUIF6OJUFE4UBUFT"OEXFSFOPUUIFPOMZPOFT TBZJOHJU.$0XBTSBOLFEJODVTUPNFSTFSWJDFCZ"JSQPSU3FWFOVF/FXT"OEBJSMJOFT BSFFYDJUFEBCPVUPVSGPVSSVOXBZTBOEUIFGBDUUIBUPOMZPGPVS IFDUBSFTPG MBOEIBWFCFFOEFWFMPQFEmUIBUNFBOTMFTTDPOHFTUJPOUPEBZBOEQMFOUZPGSPPNUPHSPX UPNPSSPX 1MVT PVS PQFSBUJOH DPTUT BSF BT DPNQFUJUJWF BT BOZ BSPVOE 5PMFBSO NPSF BCPVUXIBUNBLFT.$0BHSFBUQMBDFUPMBOEZPVSQMBOFT DPOUBDUWKBSBNJMMP!HPBBPSH PSWJTJUXXXPSMBOEPBJSQPSUTOFU alto-nov-29-06-p003 1 23/11/06 4:51:12 pm AIRLINE BUSINESS DAILY @ ALTA 29 November 2006 3 FOCUS Distribution by CFM International Latins challenge the northern raiders US CARRIERS CONTINUE TO James Li, managing director through TAM Mercosur. Howev- Delta now plans a small hub be dominant on international and head of Stanford Investment er, TAM is poised to increase its in Los Angeles with flights to routes into Latin America and Banking, says the five have fo- international market share con- nine destinations in Mexico the Caribbean, but the mix cused strategies to achieve scale, siderably (see below). and two in Central America, of US carriers is shifting, with giving them “a first class ticket to Continental, with its regional many to operate with Delta more low-cost carriers making strategic growth”. He notes the partner ExpressJet, is currently Connection regional jets. incursions, especially to Mex- region is second only to China in the second largest US presence, US Airways has pulled back its ico, Central America and the terms of forecast traffic growth. with a combined 1,531 weekly Latin services considerably, but Caribbean. American Airlines, with its re- nonstop flights in 96 it remains stronger in While the hold on interna- gional partner American Eagle, markets in November. the region than Unit- tional traffic by US carriers is remains the powerhouse in the With a wide pattern of ed, which has con- not likely fall steeply in the region, serving 148 markets with service from its Newark centrated most serv- foreseeable future, indigenous more than 3,500 weekly nonstop and Houston hubs, Con- ices from Washington carriers, gaining increasing fi- flights, as of November 2006, ac- tinental was a pioneer Dulles.