Delegates met for Routes Americas this March in Rio de Janeiro with Brazil’s three big players restructured and talking up capacity discipline, writes Graham Dunn
Routes Americas was held in Rio de Janeiro at an apt time given the strong growth in air travel both in the city and the Brazilian market more widely.
Traffic data from the Latin American and Caribbean Air Transport Association (ALTA) for 2025 showed a 9.4% year-on-year increase in Brazilian passenger numbers to just under 130 million. Domestic passengers topped 100 million for the first time, while international traffic grew 13%, notably including a 30% jump between Brazil and Argentina.
As a result, airports across Brazil have enjoyed strong growth. The country’s biggest hub, Guarulhos airport in São Paulo, lifted passenger numbers more than 8% to 47.2 million, to regain its claim as the busiest gateway in the region. Routes Americas host airport RIOgaleão, meanwhile, handled 23.5% more passengers in 2025, at 17.9 million.
Restructured market
While strong growth in Brazil is not unusual, crucially the country’s three main operators have all been through formal financial restructurings over recent years. And the leaders of all three carriers spoke of a more rational market post their restructuring.
“Today Brazil shows a strong market, high demand and a more rational capacity,” said LATAM Airlines Brasil Chief Executive, Jerome Cadier.
“What we saw in the 2010s … was really more capacity being added to this market than it deserved. So the profitability of the carriers during the 2010s was under pressure because of excess capacity,” he explained.
“What I see right now is a much more rational use of capacity in Brazil and the three players being differently positioned in the market to make sure that we have profitable growth in this market in the long run.”
LATAM Airlines Group was the first to enter a US Chapter 11 bankruptcy restructuring process almost immediately when the pandemic struck. The carrier emerged from its restructuring in November 2022 and has since been growing in the Brazilian domestic market by around 8-10% annually. LATAM now serves nearly 60 destinations in Brazil, compared to 44 prior to the pandemic.
“We saw opportunity to grow and reach more cities,” Cadier explained, something that has prompted the airline to order 24 Embraer 195-E2 narrowbody jets and take options on 50 more.
“When we look at what the E2 brings to our network, it’s really around two dimensions,” he added.
“The first one is making sure we reach additional cities, for which the A320 family is a bit too big. The second is to take some of the routes we operate today with the A320 but for which it’s too big a gauge aircraft and the E2 is more adapted to the size of the demand. That also makes sure we can offer a better product by eventually increasing frequencies from one to two to that city.”
Cadier added: “We still see possibilities of using our fleet of Airbus A320s and growing additional cities. But now we’re entering smaller markets where the E2 is the best alternative.”
GOL catches up
GOL entered financial protection at the start of 2024, a process it emerged from last year with fresh financing. While GOL has been growing fast, Chief Executive Celso Ferrer said this largely reflects the restoration of capacity lost during its restructuring.
“It’s been very sustainable and profitable. We have been able to show unit revenue growth for the last five quarters with capacity increased,” he said.
“Of course, there is a limit for this. We believe that in 2025 and 2026 we have this catch-up period, which is to bring back all the fleet and then our plan is to keep our market share in Brazil and enjoy the rational environment that we have today.
“This is a reorganisation of the Brazilian market and we want to play a very disciplined role in that regard,” Ferrer added. “We are trying to open routes that either nobody’s flying or connecting two cities in a different way.”
GOL’s network development has also been helped by the growing role of Boeing 737 Max jets – a type it had been unable to fully utilise initially because of the type’s grounding and then post-pandemic production delays. “We have been able to explore longer routes and explore more international markets,” he said.
But the Brazilian narrowbody operator is also adding long-haul services this year, as it prepares to take its first widebodies after holding company ABRA Group outlined plans to deploy five of its first seven A330-900neos at GOL.
GOL will launch thrice-weekly flights from Galeão to New York JFK this July, followed by four times weekly services to Lisbon in September. It will also add Paris Charles de Gaulle and Orlando flights from Rio as part of its expansion.
This adds to the carrier’s established presence at Galeão and Ferrer highlighted the importance of its role in the wider development of the airport.
“Because we built this [hub], Rio was able to attract a lot of long-haul flights that rely on GOL in different levels of partnerships,” he said. “We probably feed more than 25% of the long-haul traffic overall here.”
Azul re-emergence
Azul was the last of the Brazilian carriers to formally restructure in May last year. The carrier had held off against the challenges of the pandemic, supply chain issues and flooding disruption at Porto Alegre, but the sharp depreciation of the Brazilian currency hit its debt levels.
“Because we were battling for so long, we knew exactly what we wanted to do and how we wanted to come out as clean as possible,” said Azul Chief Executive John Rodgerson. The carrier completed its restructuring in February after just nine months, emerging with a reduction in debt and fleet obligations.
“Brazil has enormous challenges, but enormous opportunities, and we see a lot of room to continue to grow in Brazil, continue to develop.
“I know we’re being super rational,” Rodgerson said, when asked about the current capacity environment. “We’re growing this year about 1%, next year about 3%.
“What we did through our Chapter 11 process was build flexibility into our fleet,” he added. “The world is an uncertain place right now. I think when you’re stuck on a growth plan to build yourself into a balance sheet, that’s not a good place to be. And that’s where we were prior to Chapter 11.
“If I was trying to grow 15% a year, that would be a scary endeavour right now. And so I think we’re very comfortable where we are, and I think it gives us more optionality.”
LATAM’s foray into E2s signals a move into Azul’s market, which operates Embraer E1s and E2s, alongside ATR turboprops and Airbus narrowbodies and widebodies.
“I think competition is great for the market overall,” said Rodgerson. “I’m very confident with the cards that are in my hand. We’ve had significant experience operating the E2s and the E1s, so we know that aircraft really well.”
Challenges remain
All three chief executives, though, cite familiar barriers to travel in Brazil, including the high cost of taxes in a country where only a relatively small portion of the population uses air travel. That is compounded by uncertainty over ongoing tax reforms which airlines warn could see Value Added Tax of up to 26% on air fares, while moves are also under way to potentially prevent airlines from charging for checked-in bags.
“I see tremendous potential in Brazil,” said Rodgerson. “But Brazil has three major problems. It has the most expensive fuel in the world. It has the highest [number] of lawsuits in the world. And the third, which the government is currently addressing, is there is a lack of long-term capital.”
This in on top of wider industry issues – including a lack of aircraft availability.
LATAM’s Cadier said: “I don’t think that the airplane shortage will be solved any time soon, especially regarding engines, so I still think we have a couple of years ahead where we will want more planes than are available.”
But he also believes capacity restraint will continue in the country even once supply chain pressures ease, especially given the uncertainty around tax costs in the country.
“I think after everybody feels what Chapter 11 feels like, you become a bit more rational and cautious about over-committing to growth. That has been the fact for LATAM and I think that has been the fact for my competitors in the domestic market,” he said.
