Why Brazil's bid to lure low cost airlines may be doomed

Brazilian government officials this week tempted airline executives with a pitch: Latin America’s largest domestic aviation market is opening up and it badly needs more competition. Promises abounded to lure low-cost carriers to fly domestic routes. The infrastructure minister promised to double the number of passengers in Brazil’s skies. A monopoly on jet fuel by government-controlled Petrobras is set to end. An $18 fee charged on every international flight ticket was scrapped. But many industry veterans say that the new promises and recent reforms are not enough, and the country remains an unattractive money pit littered with barriers. “It won’t happen under the current conditions,” said Peter Cerda, VP for the Americas at industry group IATA. “You can have infrastructure. You can be the largest market in the continent. But if you’re costly, (new airlines) aren’t going to come.” Brazil transported 118m passengers in 2018, 20% more than Mexico, Latin America’s No. 2 market. However, experts say airlines in Brazil struggle with sky high fuel taxes, labour costs and legal liabilities - as well as lack of access to the coveted Congonhas airport in Sao Paulo, where the landing slots are fully booked. Brazil’s domestic market is controlled by just three airlines who dominate Congonhas’ schedule, meaning a new competitor would have to find its footing elsewhere, a hard pill to swallow. Those already operating in the country are not particularly profitable. Story has more details and background.<br/>