Eight Facts You Didn’t Know About the Brazilian Private Aviation Market

May 14, 2019

Think about business aviation on a global scale, and chances are the first country that’ll come to mind is the United States. An absolute leader in terms of the size of the executive aviation fleet, the US is also at the forefront of innovation, with jet cards, membership programs, and on-demand charters available throughout its various regions.

But have you ever thought about how important business aviation is to emerging markets? Considered as the engines of globalization, large economies of countries such as Brazil, Russia, India, or China (also collectively referred to as the BRICs) boast impressive numbers regarding the utilization of executive aviation fleets and – you’d be surprised – some of the sector’s most advanced business models available at present.

Today I will take a closer look at South America’s most influential market, Brazil. Poised to house growing numbers of unicorns – and with high single-digit growth within the executive aviation segment – the country deserves particular attention from industry professionals, especially those preparing for their next expansion phase.

Brazil is the second largest business aviation market in the world

Brazil has the second largest fleet of business aircraft in the world. With almost 2,000 executive turbo-props and jets, the sector connects almost 1,225 municipalities across the country, versus just 105 airports connected through scheduled operations. This translates to a 4 billion reais / year (ca US$ 1.3B/yr) opportunity, split between executive charters, medical services, and specialized operations.

You might be interested to know that Mexico, currently the third largest player, boasts around 1000 aircraft, and Germany – around 750 units.

São Paulo ranks #1 in helicopter traffic

Did you know that São Paulo has the world’s largest helicopter fleet? There are currently between 450 - 500 helicopters serving more than 40 helipads spread across this 20-million strong metropolitan area. In comparison, New York, which is widely considered the second most popular city for helicopter charters, counts only 120 birds. Those are some serious numbers!

The city has developed appropriate infrastructure to serve this fleet, including a dedicated helicopter traffic control tower – the only one in the world. The accessibility of the service has grown considerably in recent years, thanks to technology and increasing awareness among early adopters.

King of the turboprops

Taking advantage of the gaps in airport infrastructure and Brazil’s challenging geography are the turboprop operators. Considered a preferred option for landing on short runways, turbo-propellers perfectly fit the local market. Tailored to the needs of local clients, airplanes such as the King Air B200 or Pilatus constitute a perfect option for those seeking cost efficiency and high versatility.

It shouldn’t then come as a surprise that turbo-props make up 61% of the executive aircraft fleet in Brazil… the highest number among the Top 15 markets.

More than 88% of all business flights take place in the Southeast region

A high geographical concentration of demand turns Brazil into a perfect ecosystem for short-haul flights in turboprop aircraft. One of the companies taking advantage of such favorable conditions is my own Flapper, the boutique private airline I created with my co-founders in 2016. Aside from seasonal flights, we organize crowdsourced turbo-prop transfers between São Paulo and Rio de Janeiro (Jacarepaguá Executive Airport), as well as São Paulo and the coastal city of Angra dos Reis – both non-existent within the commercial aviation segment.

As much as 88% of all flights in the general aviation segment in Brazil take place within the distance of 1,000 km (621 miles) from São Paulo. Cities such as Brasilia and Porto Alegre can be reached within a maximum 2 hours flying popular turbo-props such as the King Air B200.

There are 115 charter operators in Brazil

Although the number has decreased from the then more than 300 operators active in early 2000, the official registers of ANAC prove that it remains one of the highest in the world. At present, more than 80 operators actively charter their aircraft. I would also highlight the presence of the “dark operators” set up exclusively for the benefits of tax incentives. They don’t necessarily disturb the existing players. Many such companies belong to private owners who want to impose an extra safety layer on their existing flight-ops. The market is very exciting, with three large players and a number of smaller, privately held companies which possess high-quality fleets and follow all the necessary standards.

A local focus

As many as 99% of all general aviation flights in Brazil are domestic flights, according to IBA’s 2018 data. Continental in size, Brazil favors a local approach. Accordingly, connecting São Paulo with Miami through scheduled Gulfstream-based operations might not be a cash cow, but you can always evaluate domestic operations.

Overall, Brazil’s travel market is 70% business and 30% leisure, somewhat similar to other markets around the globe. Some of the most popular charter routes are Belo Horizonte to São Paulo and São Paulo to Rio de Janeiro, both under 350 miles in distance. The latter even used to be the world’s most frequently flown route, with more than 120 daily scheduled flights in commercial aviation.

Widespread digitalization

As per the below figure, in the last few years online travel sales in Brazil have grown at the pace of 8-10% per year and are projected to reach US$ 9B by 2019. The corporate travel market, on the other hand, is projected to reach the #6 spot globally by 2025.

Still unsaturated from the standpoint of demand, the Brazilian digital brokerage sector is arguably one of the most prosperous in the world, especially among the BRIC economies. As of today, just two of the country’s leading OTAs offer business aviation flights, namely Argo (Amadeus-owned) and Rextur Advance (CVC Group-owned).

Infrastructure and customer adopti.on will determine future growth potential

With political malaise in the rear mirror, the business aviation sector is poised to grow. The investments made by local governments will be of utmost importance. More than 100 airports in Brazil have significant potential for further development. Over the course of the last 50 years, Brazil went from having nearly 300 primary airports to just over 110 primary airports today. The numbers are again on the rise, thanks to utilization of smaller aircraft and government support.

The Brazilian air taxi segment is still underserved and challenged by clandestine flights. Improved access and the inclusion of shared flights can double the sector’s size.

Another key challenge is customer adoption. Traditionally reserved for the wealthy, private aviation is gradually entering the travel mainstream. Taking into account data from Serasa and Facebook, there are at least 300,000s potential clients for charter services in Brazil and more than 2 million future pay-per-seat users. Will the Latin American giant strengthen its executive aviation footprint? Share your thoughts below

Paul Malicki is CEO of Brazil's first boutique private airlines, Flapper. Previously with three unicorns: Nubank, Farfetch, and Easy Taxi (Cabify). I once wrote a book entitled “The Chief Mobile Officer”. Honoree of the 2017 Forbes U30 list. Vast international experience, lived in 8 countries and commands 7 languages. Holds a BA and double MA degree