jksc : brazil assessment

BRAZIL : Air Transport and Hotels Markets

This document was prepared to JCKS group

Jul 2011

http://pt.wikipedia.org/wiki/Ficheiro:Brazil_(orthographic_projection).svg

BRAZIL : Air Transport and Hotels Markets

This document was prepared to JCKS group

Jul 2011

The Country

Air Transportation

Hotels

Summary


The Country Air Transportation Hotels

Brazil is South America's most influential country, an economic giant and one of the world's biggest democracies.

It is one of the rising economic powers - otherwise known as BRIC nations - together with Russia, India and China. Over the past few years it has made major strides in its efforts to raise millions out of poverty.

The discovery of major offshore oil reserves could propel the country into the top league of oil-exporting nations.

Worl Bank



Gross domestic product 2010

(millions ofRankingEconomy US dollars)

USA 1 United States 14.582.400CHN 2 China 5.878.629JPN 3 Japan 5.497.813DEU 4 Germany 3.309.669FRA 5 France 2.560.002GBR 6 United Kingdom 2.246.079BRA 7 Brazil 2.087.890ITA 8 Italy 2.051.412IND 9 India 1.729.010CAN 10 Canada 1.574.052

The solids macro economic fundamentals and maturity of government and non governmentInstitutions provide a political and social climate of predictability to investors and favorable the continuous growth.

An era of prosperity . . .

World Bank and IBGE



The predictions to 2020 are that Brazil will overtake UK andFrance economies

https://www.gplus.com/Infographic/INFOGRAPHIC-Whats-Best-for-Brazil



90

95

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02x

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03x

02

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Workers' Average Income R$

Products (Base 100 = Year 2002)

GDP per Capita

Demography is one the most important macro variable that is impacting a significant change in consumers behaviors.

"About 40 million came to the middle class. And the middle class came from the poorest of the population. Even we get a sense of proportion is as if, during this period, we get up off of poverty, the whole Argentina population. It is made a huge and this thing is very important because it means that all these Brazilians have joined a group of citizens who have more access to health care. We know that this process will continue, has the commitment of the Brazilian government, "said President Dilma during the commemoration of 60th anniversary of the newspaper "Day" in Rio de Janeiro.g1.globo.com/

As a result, there is a positive and consistently impact in growing.

Pyramed Age

IBGE



Brazil has a unique combination of four strengths to foster sustainable economic growth



The good performance of the economy directly impacts the traffic of airline passengers and has caused a consistentgrowing demand. The main variables of the airline operation,

1 - Expenditure on Leasing2 - Fuel3 - Development of the Real against major international currencies,

are causing a positively impact to compete in price of air tickets and allow Them to reachthe demand for air transport in population Class C and D.

Domestic Air Traffic Grow

10

20

30

06\05 07/06 08/07 09\08 11/1010\09

21,5 13,2 10,8 -0,6 27,6 21,4

ANAC


Domestic Air Traffic - 2010

MARKET SIZE

Passenger volume 71,7 million

Embarking + Disembarking 137,8 millionpassenger volume

ASK 102,0 billion

RPK 71,4 billion

Industry Average Load Factor 68,7%


ANAC , INFRAERO



Passenger volume evolution

ANAC



Brazil Civil Aviation Fleet

ANAC



Domestic Market Share as of Jun/2011

ANAC



Domestic Market Share as of Jun/2011

ANAC

Leaders Destinations

TAM 42,47% 44

GOL 37,47% 49

Followers

AZUL 7,91% 24

WEB JET 5,42% 14

AVIANCA 2,67% 14

Regional

TRIP 2,77% 78

Passaredo 0,77% 19


AirportsTOP 5 50%

TOP 10 70%

TOP 13 80%

São Paulo State 31%

Infraero network: 67 airports


Infraero



Passenger Services Systems Information of Domestic Airlines

Airline CRS DCS GDS Rev. Manag.

GOL Navitaire Navitaire AmadeusSabre

AirMex

TAM Amadeus Amadeus Amadeus Na

AZUL Navitaire Navitaire Direct NA

WEB JET CIONS CIONS Direct NA

TRIP SABRE SABRE Direct (?) NA

Research from author



Passenger Services Systems Information of Domestic Airlines

Status of services:

TAM migrated to Amadeus full service platform one year and half ago

GOL is committed with Navitarie but there some discomfort since the platform is over capacity

AZUL is committed with Navitarie

TRIP will migrate in full to SABRE in a few months.

WEB JET uses a local system solution,


Hospitality Industry

Similar to Airline business the hotel demand is very high withconsistent Load Factor.

At major metropolitan regions Brazil room night offer is facing under capacity and the Average Net Fares high.

The large hotels chains have nearly 40% of market shareAnd the remaining is hold by independents.

Since the Hotels technology development is behind theAirline business stage, we strong believe we may haverelevant opportunities to technology vendors

We will develop a summary of Hotel market for next conferencecall.


Thank You


Questions and Answers.

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