Tag Archives: Brazil

TAM to reduce its domestic operations in Brazil

LATAM Airlines Group S.A. and TAM S.A. (TAM Linhas Aereas) (Sao Paulo), announced that TAM will adjust its domestic network in Brazil. The group issued this statement:

LATAM Airlines Group logo

In order to allow TAM Airlines to remain committed with its long term sustainable development and growth plans for Brazil, the Company has decided to implement an adjustment to its domestic network at this time.

Given the impact of the challenging economic scenario in the country, caused by an increase in inflation and an appreciation of the U.S. dollar versus the Brazilian real, resulting in a slowdown in the airline industry, TAM is now implementing a gradual reduction of its domestic operations in Brazil of approximately 8% to 10%. As a result, the company has revised its capacity growth (ASK) guidance for this year for the domestic market in Brazil from 0% growth to a contraction of 2 to 4% as compared to 2014.

TAM has been working to adopt several measures to limit the impact of this adjustment on its employees. Nonetheless, the Company estimates it will reduce its staff by less than 2%, considering its normal turnover. Given the Company’s mid-term growth plans, this adjustment will not impact flight crew personnel. TAM will provide support to the affected employees with an outplacement program.

In order to guarantee the best service to its passengers, TAM will continue to serve all domestic destinations that it currently operates.

The Brazilian airline industry has suffered from declining demand, according to National Civil Aviation Agency (ANAC) data. Furthermore, data from the Market Readout of the Brazilian Central Bank released on July 10 indicates that the market projects a further decline of the Brazilian GDP, in 2015, with estimates revised down from a contraction of 1.3% to a 1.5% decline. They also estimate that inflation should end the year at over 9%, while the U.S. dollar is expected to continue to strengthen against the Brazilian real.

“TAM is taking this measure to face the difficult economic scenario of the country. It is necessary to make adjustments to our network while maintaining the connectivity we offer our passengers, and strengthening even further the Company’s competiveness in Brazil ”, said Claudia Sender, CEO of TAM S.A.

“We continue to believe in the country’s recovery and this adjustment in no way affects the Company’s long-term strategy, which include the renewal of the fleet, the feasibility study for the Northeastern hub and the continuous strengthening of our hubs in Brasília and São Paulo/Guarulhos”, she added.

Copyright Photo: Rodrigo Cozzato/AirlinersGallery.com. Airbus A321-231 PT-MXM (msn 5987) with Sharklets departs from the Sao Paulo (Guarulhos) hub.

TAM aircraft slide show: AG Airline Slide Show

AG Full screen views

 

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Why is David Neeleman buying a controlling share of problem-plagued TAP Portugal?

David Neeleman, the airline entrepreneur who was involved with running Morris Air (Salt Lake City) with June Morris before he founded NewAir (later JetBlue Airways) (New York) and later Azul Brazilian Airlines (Sao Paulo), has struck out again with a new airline venture. This time he is not creating something new but buying into something old.

TAP Portugal logo-1

 

Neeleman lead an investment group which has been selected by the state of Portugal to acquire their controlling share in troubled flag carrier TAP Portugal (Lisbon) for €348 million ($391 million), outbidding investor German Efromovich. Besides running Azul, he will now be running trouble-plagued TAP Portugal. His group will control 61 percent of the stock of TAP Portugal. Neeleman’s group will upgrade the carrier with new aircraft (probably new Embraers for the European routes).

TAP Portugal is also likely to receive a new makeover with the new ownership group, possibly with a new blue theme.

Read the full report from Bloomberg Businessweek: CLICK HERE

Portugal is the mother country of Brazil. The ties are strong. Both countries speak the same language and the traffic patterns are strong between Brazil and Portugal. The Azul-TAP alliance will now compete against TAM and the LATAM Airlines Group which wants to increase the number of flights between Brazil and Europe. The battle lines are being drawn in Brazil.

For Neeleman, his Brazilian roots are deep. According to Wikipedia, Neeleman was born in São Paulo, Brazil, but raised in Miami. He lived in Brazil until he was five. He later attended Brighton High School in Cottonwood Heights, Utah, and attended the University of Utah for three years before dropping out. He served on a religious mission for The Church of Jesus Christ of Latter-day Saints (The Mormons) in the Northeast Region of Brazil.

JetBlue logo-2

 

After starting JetBlue Airways, CEO David Neeleman on May 10, 2007 was forced out and replaced by David Barger.

Neeleman headed south, back to his original roots. On March 27, 2008 Neeleman officially announced plans to launch a new airline, Azul (Portuguese for “blue”). Azul is now Brazil’s third largest airline and it is expanding internationally.

Azul logo

Also according to Wikipedia, Neeleman lives with his family in New Canaan, Connecticut, United States. He is the father of nine children. In 2000, he disclosed to CNBC that he has adult attention-deficit disorder (see the video above).

When Azul expanded to the United States it picked two cities that are big on the JetBlue Airways route map – Fort Lauderdale/Hollywood and Orlando, Florida. The ties between Azul and Neeleman’s old JetBlue Airways remain strong.

JetBlue has considered larger aircraft and longer-range routes to Latin America in the past. In essence, Azul is now filling this void (at least to Brazil) with its newly-acquired Airbus A330s.

It is very likely that Neeleman has much bigger plans in mind. The synergy between Brazil (and Latin America), North America and Europe are strong. For Neeleman, he now has the European piece in place once he solves the problems plaguing the flag carrier of Portugal. He also has remaining ties to the North American airline he founded – JetBlue Airways. Are the three the future base of a much larger airline alliance?

For JetBlue, their strategy is to make airline friends with any international carrier that has the potential of code sharing at their point of entry into the United States. They have successfully carved out a niche feeding international airlines especially at New York (JFK), Orlando and Fort Lauderdale/Hollywood. This strategy has recently put them at odds with the “Big Three” (American, Delta and United) over the on-going Open Skies dispute with the “Gulf Big Three” (Emirates, Etihad and Qatar). Due to their stance, their ties with the Gulf Big Three are likely to expand. Will Qatar Airways leave the oneworld alliance for JetBlue?

There is a lot of potential for a future Azul-TAP Portugal-JetBlue alliance although JetBlue is unlikely to do anything that would upset any relationship it has.

For David Neeleman, this is only the beginning.

Video: GE Capital. David Neeleman on Leadership and Innovation.

 

 

Delta files to fly from Orlando to Sao Paulo, Brazil

DELTA AIR LINES LOGO

Delta Air Lines (Atlanta) has filed for regulatory approval to offer new nonstop flights between Orlando, Florida, and Sao Paulo, Brazil, beginning December 19, 2015. Delta expects to serve the two cities with four (4) weekly flights. The airline’s strategic alliance with Gol Linhas Aereas Inteligentes (Sao Paulo) extends the reach of this service to 20 interior Brazil destinations and provides seamless connections at Guarulhos International Airport.

The proposed service would be operated using a Boeing 767-300 aircraft, with 35 seats in Delta One, 32 seats in Delta Comfort+ and 143 seats in the Main Cabin.

Delta’s proposed schedule between Orlando (MCO) and Sao Paulo (GRU) is as follows:

Delta MCO-GRU Schedule

Copyright Photo below: Michael B. Ing/AirlinersGallery.com. Boeing 767-332 ER N180DN (msn 25985) climbs away from Los Angeles International Airport.

Delta Air Lines aircraft slide show (current livery): AG Airline Slide Show

Iberia paints its Airbus A330-302 EC-LYF for the FIFA World Cup

Iberia A330-300 EC-LYF (14-FIFA World Cup)(Flt)(Iberia)(LRW)

Iberia (Madrid) in advance of the upcoming 2014 FIFA World Cup in Brazil, has painted its Airbus A330-302 EC-LYF (msn 1437) in this special livery. The A330 will transport the Spanish team and soccer fans to Brazil.

The inscription across the aircraft translates as “carry the illusion of an entire country”.

Image: Iberia.

Iberia: AG Slide Show

Video: The painting of EC-LYF:

Gol hires Brazilian graffiti artists Os Gêmeos to paint this FIFA World Cup logo jet

Gol 737-800 WL PR-GUO (14-World Cup 2014)(Grd)(Gol)(LRW)

Gol Transportes Aereos‘ (Sao Paulo) pictured Boeing 737-8EH PR-GUO (msn 35850) PR-GUO has been painted by the famous Brazilian Graffitti artist twins, Os Gêmeos. The design represents the Brazilian people who are getting ready to support the Brazilian football (soccer) team during the upcoming FIFA World Cup 2014 in Brazil.

The aircraft paint is expected to last at least two years.

Gol Os Gêmeos Artist (Gol)(LRW)

Os Gêmeos (Portuguese for The Twins) twins live in São Paulo, Brazil. Otavio and Gustavo Pandolfo are graffiti artists and identical twins. According to Wikipedia, “the twins started painting graffiti artwork in 1987 and gradually became a main influence in the local scene, helping to define Brazil’s own style. Their work often features yellow-skinned characters – taken from the yellow tinge both of the twins have in their dreams – but is otherwise diverse and ranges from tags to complicated murals. Subjects range from family portraits to commentary on São Paulo’s social and political circumstances, as well as Brazilian folklore. Their graffiti style was influenced by both traditional hip hop style and the Brazilian culture”.

Copyright Photos: Gol.

Special thanks goes to Alvaro Romero, reporting from Chile.

Gol: AG Slide Show

Boeing and Embraer announce a joint research center to advance sustainable aviation biofuel in Brazil

 

Boeing logo (medium)

Boeing and Embraer S.A. today announced that they will open a joint research center to advance a sustainable aviation biofuel industry in Brazil.

Under a memorandum of understanding, the two companies will perform joint biofuel research, as well as fund and coordinate research with Brazilian universities and other institutions. The research will focus on technologies that address gaps in a supply chain for sustainable aviation biofuel in Brazil, such as feedstock production and processing technologies. The companies’ biofuel research center will be located in Sao Jose dos Campos Technology Park.

“Boeing is working aggressively around the world to expand the supply of sustainable aviation biofuel and reduce aviation’s carbon emissions,” said Julie Felgar, managing director of Environmental Strategy and Integration, Boeing Commercial Airplanes. “With our joint biofuel research center, Boeing and Embraer are making a strong commitment toward a successful, sustainable aviation biofuel industry in Brazil.”

“Embraer is committed in supporting the development of sustainable biofuels for aviation and the joint efforts with Boeing will undoubtedly contribute to the company continuing to be in the forefront of research in this area,” says Mauro Kern, Executive Vice President, Engineering and Technology, Embraer. “Brazil has tradition in the area of alternative fuels and enormous potential yet to be explored in bioenergy research.”

In 2013, Boeing, Embraer and the Fundacao de Amparo a Pesquisa of the State of Sao Paulo (FAPESP) completed an action plan – Flightpath to Aviation Biofuels in Brazil – that identified gaps in a potential biofuel supply chain. The joint research between Boeing and Embraer will help address those gaps.

When produced sustainably, aviation biofuel emits 50 to 80 percent lower carbon emissions through its lifecycle than petroleum jet fuel. Globally, more than 1,500 passenger flights using biofuel have been conducted since the fuel was approved for use in 2011.

Embraer logo

Avianca Brazil to partner with Byogy Renewables to produce biofuel

Avianca (Brazil) (Oceanair Linhas Aereas dba) (Sao Paulo) is increasing its partnering efforts to produce aviation biofuels in Brazil in association with Byogy Renewables. The two companies issued this statement:

Continuing its commitment to deliver price competitive, 100% replacement biofuels, Byogy Renewables and airline partner Avianca Brasil have launched a significant initiative to support advanced testing to accelerate the Byogy ATJ ASTM approval.

Unlike the confusing term drop-in fuel, which is defined as the final mixture of hydrocarbon additive products with jet fuel produced from oil, Byogy’s proprietary ATJ process produces one of the world’s first full replacement fuel that does not require blending, and also demonstrates performance characteristics better than jet fuel produced from oil. Byogy’s jet fuel is not an additive, but instead, a full replacement standalone fuel, and hence can be used at any blend ratio up to 100%.

“Our goal with our partner Avianca is to first, support the approval of the ATJ suite of process technologies in accordance with current regulations that limit blending to 50%, and then, after gaining appropriate experience testing data, work with the ASTM stakeholders to study the potential use of higher blend ratios that will in turn drive the highest level of carbon reduction possible of any renewable fuel,” said Kevin Weiss, CEO of Byogy.

The initiative will also study to validate the significant beneficial environmental impact achieved using Byogy’s ATJ to satisfy the proposed ICAO 2050 Neutral Carbon Growth mandate for the country of Brazil by leveraging the existing, and abundant sugar cane feedstock, as opposed to waiting for years before other agriculture feedstock industries are proven cost effective.

“Avianca is fully committed to supporting the Byogy ATJ fuel approval process and believes it is the best solution for Avianca to achieve carbon neutrality for its operations in Brazil,” said Captain Norberto Raniero, Vice President of Operations at Avianca.

“We believe that the increase in aviation demand will show that the only way to achieve the carbon reduction mandate, set out by the ICAO, is to use high blend ratios of renewable aviation fuel,” said Weiss. “This is probably the most significant initiative in the aviation industry as it demonstrates the evolution to a full replacement, high quality renewable aviation fuel.”

By leveraging the existing global feedstock of ethanol, Byogy is not limited to its own ability to produce alcohol and hence is not subject to the scale up risks associated with novel biological organisms. Instead, Byogy’s proven petrochemical process will capitalize on the global efforts that are currently driving the production cost of ethanol down. As Weiss states, “at some point, we will wake up from this ethanol hangover and realize that it is more important to use alcohols to produce full replacement renewable aviation fuels than it is to push higher blends of alcohols into infrastructure that cannot support it.”

Once approved by ASTM, it is anticipated that the Byogy ATJ bio-jet fuel will deliver to operators the multiple benefits including, lower fuel consumption, lower engine maintenance cost, and a significant beneficial environmental impact.

Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com. The pictured new Airbus A318-121 PR-AVK (msn 3062) prepares to depart from the tropical destination of Salvador in northern Brazil.

Avianca (Brazil): AG Slide Show