The effects of an even greater rise in costs are already beginning to appear on the radar of concerns for airlines in Brazil. Even without operations in Eastern Europe, under the scare of the War in Ukraine, companies see risks to the price of tickets in the face of the rise of the dollar and the price of oil.
In addition to fuel costs, fluctuations in the US currency affect expenses with aircraft leasing, maintenance and insurance.
Abear (Brazilian Association of Airlines) says that it closely monitors quotations, precisely because of the effect of variations on the costs of the airline sector.
Officially, Latam only says that it has no flights impacted by the situation so far. Gol positions itself through the sector entity.
For Azul, an eventual effect on the value of the tickets will depend on the impact of the war on the exchange rate and on the dollar. The company says that “its operations continue within normality and without any impact.”
On the social network dedicated to work LinkedIn, Jerome Cardier, CEO of Latam, wrote that fuel, exchange, credit and inputs are points of attention and deserve to be monitored by the sector.
“From the first reactions, the impact on airline costs is undeniable. Unfortunately, in the situation that the sector is in, these increases will impact ticket prices. It’s a shame, especially at a time when what we most want is to fly again.” “, he wrote.
Among the inputs, Cardier cited concerns about the price and availability of commodities relevant to the industry, such as titanium used in the manufacture of airplanes. In the capital market, he mentions the availability of credit, which may be reduced.
“And everyone’s big question is how long this will last,” wrote the executive. “That long-term horizon no longer exists. We have to react quickly in the short term and adjust the offer according to these costs.”
Fuel prices were already putting the industry under pressure. In Brazil, between 33% and 35% of the cost of the activity comes from kerosene for aviation, which follows the fluctuations in oil prices. The world average is 22%.
In January, the prices of air tickets for the consumer fell 18.35%, but still accumulate a high of 19.92% in 12 months, according to the IPCA (National Consumer Price Index), above the general index, in 10, 38%.
The dollar, the main indicator of airline costs, rose 2.01% on Thursday (24).
More recent data from Anac (National Civil Aviation Agency), referring to the third quarter of 2021, show that the increase in aviation fuel reached 56.6%, on average, compared to the same period of the previous year.
IATA (the international air transport association) says it has been gathering information from government and non-government sources to help airlines with their plans to operate from the closure of airspace in Ukraine and parts of Russia.
“The escalation of events is deeply saddening. Hoping for a peaceful solution soon. For aviation, safety is always the top priority.”
This week, with the advance of Russian troops towards Ukraine, airspace in the region has also gained attention. Through the website Flight Radar, which provides a view of aircraft traffic around the world, users of social networks followed and shared from the isolation of Ukrainian airspace to the arrival of planes from other countries in the region.
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