Avianca Brasil to expand market share by adding larger planes

Brazilian airline Avianca Brasil plans to increase its share of the domestic market in Brazil from nearly 10 percent to at least 15 percent this year by adding eight bigger planes, the company´s marketing vice president Tarcisio Gargioni said.

Gargioni, speaking by telephone from Brazil, said that Avianca Brasil has grown ¨four times its size in four years,¨ as he described the company’s expansion from 2 percent of the Brazilian market to currently more than 9 percent.

The company, which now operates a fleet of 41 airplanes, expects to expand its market share this year to about 15 percent to 18 percent. To make this possible, the company plans to add eight Airbus A 320 airplanes with 160 seats to replace older models with 100 seats.

¨We are basically growing because we are putting in place bigger airplanes,¨ Gargioni said. The company airplanes are leased, he added. The company will keep its 23 destinations in Brazil but add more passengers.

Estimating the future growth of the Brazilian air passenger market can be difficult. It has expanded to 100 million passengers in 2015 from 33 million in 2004. The Brazilian air passenger market represents about US $9 billion and makes up about half of all the Latin American market, Gargioni said.

The company competes with Tam, which is part of the Lan-Tam majority Chilean group, and with Gol. Tam and Gol are the main airlines in Brazil, each capturing a market share of about 37 percent. In addition, Azul is another airline operating in Brazil.

The Brazilian market is currently very volatile, but Gargioni sees it expanding by about 1 percent overall.

¨In January and February we had good growth because there was an effect from the sales in October and November but now there is another economic scenario. In the last three months there was a slowdown. We do not have a strong projection but believe the year will end in the positive,¨ he said.

Avianca Brasil is managed independently from Colombia-based Avianca, and operates mostly domestic routes. ¨The only thing we share is the brand. We are 100 percent different and independent,¨ he said. This is possible thanks to a contract in Brazil allowing the use of the brand, he added. Some investors are in both companies, he added.

Avianca from Colombia, or Avianca Holding as the company is known to Avianca Brasil, operates three international routes in Brazil connecting Porto Alegre, Sao Paulo and Rio with Bogota and Lima. Avianca Brasil has one international route, which is a weekly flight connecting Fortaleza to Colombia.