The offer of commercial flights in Brazil fell by 95% in 2020 because of the pandemic. Faced with the rules of social distancing, executive aviation has conquered space for offering an experience, mainly, safe.
At TAM Executive Aviation, charters and maintenance services exceeded expectations, also supported by the aircraft sales sector.
Prospects for good business continue as vaccination advances across the country. On the other hand, the threat of turmoil generated by economic and structural instabilities, especially those related to increases in oil in the international market, grows. “Economic instability is one of the main challenges of the sector in Brazil, because with the fluctuation of the exchange rate, inflationary pressure and political uncertainties, clients postpone the closing of the contract”, said to DINHEIRO the company’s president, Leonardo Fiuza.
The results presented by TAM in the period 2020-2021, according to the executive, were better than those of the previous biennium, with a significant increase in charters. In terms of maintenance, there was a rise, above all, with specialized services, such as upgrades, internet installation and general painting, in addition to the sale of parts. Finally, the aircraft business line was driven by sales of the Bell 505 Jet Ranger X helicopter. “We are responsible for 10% of all orders for the model, which makes us the second largest buyer of the Bell 505 in the world,” Fiuza, noting that the King Air models (260 and 360) used mainly in the agribusiness sector represent 46% of the company’s sales. “As for jets, the best sellers are the Citation M2 and the Citation CJ3+.” In operation for 60 years, TAM is the exclusive representative of Textron Aviation, Bell and FlightSafety (world leader in training).
A price analysis is enough to see how exclusive executive aviation is, despite having won supporters during the health crisis. A Bell 505 Jet Ranger X helicopter starts at $1.9 million, while a Citation Longitude jet, the most expensive in the portfolio, starts at $29.9 million. The value of an aircraft charter depends on factors such as chosen model and distance. “For the journey between Congonhas (São Paulo) and Santos Dumont (Rio de Janeiro) airports, for example, the value varies between R$30,000 and R$50,000 by plane. For the same route by helicopter, it can range between R$20,000 and R$40,000,” said Fiuza.
In addition to agribusiness, TAM’s main clients are in the financial, retail and pharmaceutical industries. The Brazilian market is the second largest in the world, surpassed only by the American one. Business cycles, according to the executive, usually take place in the medium and long term, which forces the company to carry out analyzes with a broader view over time. With the control of the pandemic in the world and, above all, in Brazil, the hope is that the economy will warm up again. “With this, we expect to grow in all our areas of operation.”
Simultaneously with planning expansion strategies, the company remains attentive to the behavior of oil in the international market. The price of a barrel is close to the
US$ 100, and the constant increases have had a direct impact on the liter of fuel in Brazil, including aviation kerosene. “Fuel corresponds to approximately 40% of the cost of the flight. That’s why it has a great influence on the final price of the charter”, he said. And, despite some clouds on the way, TAM is more than ready for the next flight.
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