The outcome of Varig's life-or-death struggle may hardly matter at the rate TAM and GOL are growing.
Varig, once the undisputed flag carrier of Brazil and the dominant airline in its skies, has become a shadow of its former self through the combined effect of its own shrinkage and the robust growth of its two main rivals.
Varig has struggled in recent months to sustain a semblance of scheduled service, with half its fleet grounded because of lack of maintenance. By late June its situation was so desperate that Brazil's air force was ready to deploy two military Boeing 707s if needed to lift stranded passengers.
TAM and GOL are both adding flights and accelerating their fleet expansion programmes. Immediately after TAM took delivery in June of its fifth new Airbus A320 for this year, it exercised options on 37 further Airbus jets, including 15 A319s, 16 A320s and six A330s, all to be delivered over the next four years.
By year end, TAM's fleet of 83 aircraft will have grown to 96. At the same time, GOL has recently added 10 owned or leased Boeing 737s per month. In two years' time, it expects to have 81 jets.
GOL's domestic traffic is growing at rate of 18% a year. It has been Brazil's number two carrier since April of last year, when it passed Varig in domestic market share. The most recent statistics show TAM holding a comfortable domestic lead at 48%, followed by GOL at 35%, and Varig with only 11%. Airlines such as BRA and OceanAir carry the rest.
Varig is still the international leader, but its market share has plunged from 78% a year ago to 54%. GOL now carries 6%, but TAM is showing the most impressive growth. Despite concentrating on higher-yield routes, TAM now carries 38% of all international traffic flown by Brazilian airlines. It is hoping for more international traffic rights to expand further, said chief executive Marco Antonio Bologna. ■
Source: Airline Business
