Business aviation activity rates in Brazil are varying significantly among different groups of travelers as the country struggles to deal with the Covid-19 pandemic, according to speakers at a recent industry webinar. Participants agreed that a full recovery is several years away, but they also saw opportunities as shrinkage of airline routes enhances business aviationâs value for reaching far-flung destinations already underserved by the airlines.
For instance, in Brazilâs Central-West region, the large agricultural sector is still generating high levels of flight activity. â[Farmers] are flying a lot. Theyâre leaving the family in quarantine on the ranch, not in the city," explained ABAG technical director Raul Marinho. "But in the artistic segment, itâs a climate of terror, with country-western singers putting aircraft up for sale.â
According to Marinho, âThe air taxi segment needs more transparency...so that a consumer can charter without technical knowledge.â Thatâs a problem ABAG, the Brazilian business aviation association, is addressing with an app, dubbed Adam, that links consumers to charter firms.
Meanwhile, purchases of new business jets have been âless a financial difficulty than a delivery difficulty because of assembly line delays,â aviation lawyer Felipe Bonsenso told webinar attendees. But heâs seen some business jet sales affected as âsome sellers in Brazil have suffered because of the commercial legal codeâs recognition of âacts of God,ââ while some sellers have pulled listings because with the pandemic they see âa greater need for safety, for the ability to travel.â
As the value of aircraft has dropped in the crisis, he noted that in some existing contracts lenders have asked for additional guarantees. But for new purchases, Bonsenso added, âWe have seen no drop in appetite to loans on the part of foreign banks.â
Fabio Rebello of Pilatus distributor Synerjet said that his company still has plenty of opportunities to talk to sales prospects across Latin America. Synerjet has done some scheduled deliveries and spoken with customers who have decided to cut costs by substituting smaller aircraft for larger ones. âChaos always brings opportunities, and weâve put our foot on the accelerator,â he said.
Brazilian Aviation Institute president Francisco Lyra said that âall crises transform the market into a buyersâ market,â predicting that it will be an âexcellent opportunity to enter [business aviation]...when the market melts downâmaybe not yet, but when the news starts coming off a drop in GDP, etcetera, there will be opportunitiesâŚbargains.â
Fractional ownership was discussed as an idea whose time is ripe, but for which legislative structures are still inadequate. In fact, Brazil's new civil aviation code RBAC 91 has, under the relevant Subpart K section, merely the word âreserved,â requiring hand-crafted solutions to such issues as avoiding joint liability.
Paul Malicki said the crisis has pushed his flight-sharing app Flapper to explore new markets, such as developing an air freight app expected to launch in the coming weeks and the largest charter flight booked to date, which brought medical supplies from China. Among the obstacles to reaching a broader public is a cultural bias against single-engine airplanes, which caused the higher-cost King Air twin turboprop to be preferred over the Pilatus PC-12 on a test SĂŁo Paulo-Rio route. He sees potential for a boutique airline, as â88 percent of all general aviation flights in Brazil are within around a thousand kilometers of SĂŁo Paulo.â Electric aircraft have the potential to reduce costs and rates by half, he said, which would open private flying to the middle class.
The webinarâconducted completely in Portuguese and now archived on YouTubeâis one of a series organized by organizers of the Airport Infra Expo show, scheduled for October 6 to 8 in SĂŁo Paulo. The city had been due to host ABAG's annual LABACE trade exhibition in August, but this has been postponed.