Azul (Brazil) to add longhaul int'l fleet

[WorldTraveler]

http://finance.yahoo.com/news/ilfc-azul-brazilian-airlines-sign-143000027.html

Big move for Brazil's number 3 carrier which is a sister carrier to JetBlue.

 

[AdAstraPerAspera]

Gol better watch out, they are in a much more vulnerable position. This is unlikely to unseat TAM from its dominate position in Brazil.

 

[WorldTraveler]

Gol is the largest domestic airline in Brazil, not TAM.

Azul is far smaller than either Gol or TAM; Campinas is still a far smaller city than either São Paulo or Rio where TAM's int'l operations are concentrated and where Gol's largest connections with its int'l airline partners takes place.

 

[AdAstraPerAspera]

TAM: The largest Brazilian airline by both fleet size and market share
 
http://en.wikipedia.org/wiki/TAM_Airlines

 

[WorldTraveler]

read what I wrote. I'm not debating that TAM is a larger airline overall.... it in fact is because it also has longhaul int'l service which Gol doesn't.

IN the DOMESTIC Brazil market, Gol has 39% of the seats compared to TAM's 32%. Azul has 20% of the domestic Brazil market, which like Gol is the only part of the market they compete in.

You made the statement that Azul's expansion would hurt Gol yet Gol doesn't even compete in the longhaul int'l market now. Further, Gol's int'l strategy is partnership with multiple int'l airlines who are primarily in Skyteam and oneworld even though TAM is now in oneworld. It is TAM who is most vulnerable along with AA who is the dominant carrier to N. America which is where Azul intends to first add intl flight.

 

[AdAstraPerAspera]

And what hope does Gol have of expanding to lucrative LONGHAUL in an already crowded marketplace, then? With Oneworld distantly ahead in LatAm, this announcement affects Gol far more than Tam

 

[WorldTraveler]

first, it isn't certain that longhaul from Brazil will be as lucrative as it once was with the market being one of the last to be deregulated in Latin América and precisely with Azul's entrance into the market.
Analysts are not convinced that Latam is vulnerable with their high debt levels and the increased competition

Second, Gol's strategy of being a domestic only airline (or within S. América) with multiple codeshare partners is no different from what Alaska and JetBlue do in the US.

Gol is less affected by Azul's entrance into the Brazil to US market than you want to believe.

In fact, it is likely that AA will start MIA-Campinas and perhaps Campinas-JFK service of their own in the midst of Azul's expansion.