In order for Brazil to move towards developing its growth potential in air transport, it needs to advance on some crucial issues, the most urgent of which are combating distortions in the pricing of aviation fuel, reducing litigation in the sector and re-discussing the taxation imposed on companies. The subject was the subject of debate among experts during a panel at the 82nd annual assembly of the International Air Transport Association (IATA), which is taking place in Rio de Janeiro.
A study released by the association put this potential to be unlocked into numbers. Two key indicators are the number of jobs and the contribution to Gross Domestic Product (GDP) generated by the aviation sector as a whole.
Also read:
In Brazil, 246,800 people were directly employed in aviation in 2023, generating US$10.3 billion in economic production, equivalent to 0.5% of total GDP. Additional benefits are generated by the broader supply chain, employee spending and tourism activities, contributing a total of US$46.4 billion to GDP and 1.9 million jobs.
Tourism supported by aviation contributes US$6.6 billion to the country’s GDP and employs 310,000 people. It is estimated that international tourists to Brazil contribute US$6.8 billion annually to the economy through the purchase of goods and services from local companies.
Last year alone, Brazil transported 100 million domestic passengers and the number of foreigners flying through the country reached 9.3 million people.
Continues after advertising
But there are bad statistics too. Fuel costs by companies represent 40% of the total, one of the highest proportions in the world. There is also an expenditure of around US$200 million per year on litigation. It is estimated that there is one share for every 227 passengers transported, which is almost a full plane. Finally, threats and effective proposals for exemptions or creation of fees by the Executive and Legislative powers add financial risks to the operation.
For Jerome Cadier, CEO of Latam in Brazil, it is necessary to understand that air passenger transport is much more than taking people from one location to another, but something that is part of a country’s development agenda, due to the interconnectivity it provides.
Regarding the constant battles over new laws and regulations created in Brazil, he was emphatic: “we need more regulatory stability”, he declared, highlighting that the airline sector has long-term investments.
The journalist traveled at the invitation of IATA.
