The European Union and Brazil have agreed in principle to a revised air services agreement that will allow airlines across the continent to operate direct flights to any destination Brazil from any international airport within member states without restrictions on routes, prices and the number of weekly flights. The tentative partnership was announced by the European Commission last week and is expected to be formally signed by the summer. As with existing open skies agreements with our nations, strong collaboration will also take place on matters relating to safety, security, application of competition law, air traffic management, environment, consumer protection, and social and labour issues.
“What we have reached with Brazil today is an agreement that will open up the air traffic market between the EU and Brazil,” Siim Kallas, Vice President Transport, European Commission. “This will generate significant economic benefits for businesses, travellers, the aviation industry and the wider EU and Brazilian economies.”
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MARKET ANALYSIS: EUROPE – BRAZIL (weekly non-stop flights by carrier) |
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|
Rank |
Airline |
Flights |
Seats |
% Capacity |
|
1 |
TAP Portugal |
63 |
16,594 |
27.0 % |
|
2 |
TAM Airlines |
56 |
13,958 |
22.7 % |
|
3 |
Air France |
24 |
7,421 |
12.1 % |
|
4 |
Iberia |
23 |
6,906 |
11.3 % |
|
5 |
Lufthansa |
12 |
3,525 |
5.7 % |
|
6 |
British Airways |
10 |
3,387 |
5.5 % |
|
7 |
KLM Royal Dutch Airlines |
7 |
2,767 |
4.5 % |
|
8 |
Alitalia |
7 |
2,037 |
3.3 % |
|
9 |
Swiss International Air Lines |
7 |
1,596 |
2.6 % |
|
10 |
Singapore Airlines |
3 |
834 |
1.4 % |
|
11 |
Air Europa |
3 |
633 |
1.0 % |
|
12 |
Air Italy |
2 |
570 |
0.9 % |
|
13 |
Condor |
2 |
538 |
0.9 % |
|
14 |
Air China |
2 |
388 |
0.6 % |
|
15 |
Arkefly |
1 |
214 |
0.3 % |
|
TOTAL |
222 |
61,368 |
|
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Source: Flightbase (April 14 – 20, 2011)
There are currently more than 220 weekly flights between Europe and Brazil, providing more than 61,000 seats per week. The network is currently dominated by TAP Portugal and Brazilian carrier TAM Airlines, but Air France, British Airways, Iberia and Lufthansa all offer ten frequencies a week or more. Brazil is by far the largest air transport market in South America from Europe and approximately 4.4 million O&D passengers travelled there in the year ending January 2011, with France, Italy and Portugal being the prime markets.
The Open Skies agreement will provide excellent opportunities for European and Brazilian airlines especially given the expected growth in air transport to Brazil. This will be buoyed by upcoming events in the country - Brazil will host the FIFA World Cup in 2014 and the Olympic Games in 2016. The EC said that an economic impact assessment study forecasts that a full market opening with Brazil could generate up to €460 million ($652.2 million) in consumer benefits per year. The potential for traffic growth is estimated at 335,000 additional passengers in the first year.
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