Brazil grows, but China is the focus of Airbus

A A380 takes off in the world every ten minutes. The calculation, however, excludes Brazil. The largest aircraft, of the French Airbus is in the market since 2007, can carry up to 853 passengers and fights to be the replacement of the Boeing 747 on long-haul flights. However, the company has yet to make any sales of this model in the domestic market of Brazil. This fact in no way means that the aircraft manufacturer is dissatisfied with their results here. Over the past four years, they have sold no less than 300 aircraft in Brazil, which means 80% of aircraft sales to the Latin American market.

For the company’s vice president for Latin America and the Caribbean, Rafael Alonso, who came to the country on the week if the 22nd of March to present their largest model in the A380 World Tour, the business will multiply in the long run. “Over the next 20 years, there will be a demand of over 700 aircraft in Brazil. Despite a possible economic slowdown, we have reasons to remain optimistic,” he said in an interview with the SEE. However, in his view, China is the country that attracts the spotlight. Until 2032, the country will go to the market after more than 5,000 aircraft. “It is our main market,” says Alonso.

Airbus attributes most of its growth in Brazil to the advancement of the Gross Domestic Product (GDP). But market estimates are that GDP would grow at a less robust pace in the coming years. How does this affect the prospect of demand for aircraft in the country?

Air traffic anywhere in the world, is always tied to the GDP. The estimate is that the advance of the traffic is 2% to 3% higher than the growth of the economy. In recent years, Latin America – particularly Brazil – observed a very large expansion of flights, thanks mainly to the region’s economic development. In the immediate future, we know that growth will not be as strong as it was in the last decade, but still important. But what we look at is the long term. This is not a horizon of two or three years, but rather decades. Over the next 20 years, there will be a demand of over 700 aircraft in Brazil and around 2000 for the entire Latin American market. So, despite a possible slowdown, we have reasons to remain optimistic.

Last year, the president of Air France, a major customer of Airbus, said the lack of airport infrastructure slowed the growth of the company in Brazil. For Airbus, it also occurs?

As Air France is an airline, the perception that they have of the market may differ slightly from Airbus. But undoubtedly there is much to modernize the i entire airport system in the country. I think, finally, right actions are being taken, as the partial privatization of some airports. Once this process of privatization is over, there will certainly be more investment and significant improvements in infrastructure – without which the aircraft can not operate and companies cannot come to the country.

What is Brazil’s participation in the businesses of Airbus?

Considering all of Latin America, there are two large and important nations, which are Brazil and Mexico. Then there is the Chile, Argentina and Colombia, which have average size. Brazil, no doubt, is the number one market in the region. About 30% of new aircrafts that will arrive to Latin America will be in the country.

With the crisis in Europe, industry analysts estimate that some airlines may not survive. Is Airbus prepared for this scenario?

Europe is going through a delicate moment and it ends up extending to Airbus. But we are a global company. Therefore, when a region is ill, it may be offset by another that is going very well. If Europe is low, Asia is growing a lot, Latin America and North America also already showing signs of recovery. Then in the final bill, the regions are balanced. We have sought further time to very efficiently manage our backlog. If we analyze the evolution of sales of Airbus, we see that the supplies are always rising. There was no decrease in 2008. This is because, when we realize that an area may go into crisis, we try to rearrange the orders so that another region will receive the aircraft that the country that is experiencing a time of turbulence cannot receive.

Has Asia now become the most important market for the company?

Without a doubt, especially China. The Chinese market has a demand of 5000 to 6000 aircrafts over the next year. Along with India, this are the countries that have the greatest increase in passenger flow in the next 20 years. Geographically, Asia will account for 34% of global demand over the next two decades.

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Joe Cloud
Dutch, American, Brazilian... lived there for 5 years and owns property in Brazil. Out of the country for a few years now and would like to go back, however current circumstances tell me it's not the right time.

Published by Joe Cloud

Dutch, American, Brazilian... lived there for 5 years and owns property in Brazil. Out of the country for a few years now and would like to go back, however current circumstances tell me it's not the right time.