Panel SA: Situation of airlines with war in Ukraine is serious and historic, says sector

“The situation is very serious. We are suffering historical cost pressure”, says Eduardo Sanovicz, president of Abear, an association that brings together the airlines Gol and Latam.

According to Abear, in 2008, when the sector went through another difficult moment with kerosene at a price level similar to the current one, the situation was even lighter because the dollar was around R$2.

Now, with a barrel peak above US$ 130 and the dollar at R$ 5, Sanovicz says that the sector has never seen such great cost pressure.​

The fuel accounts for more than a third of the costs of airlines, which have a share above 50% indexed to the dollar, according to the entity.

Since the outbreak of the war in Ukraine, the sector has warned that prices will rise, but Sanovicz says that the surge in jet fuel could also begin to harm the supply of flights to further destinations.

“If the cost bursts, on some flights you would have to adjust the fares. And the capacity of the consumer market today does not account for this fare impact. In the event that this impact comes of this size, we have to review some flights. And where? regions with lower consumption capacity, that is, the furthest away from economic centers and regional centers”, he says.

With the worsening of the scenario, Abear has argued that the emergency measures that may be taken to contain prices as a result of the invasion of Ukraine also include aviation kerosene, which accumulates a rise of more than 75%.

“It is also worrying, as are gasoline, diesel and cooking gas. Our pre-pandemic traffic was hitting 9 million passengers a month. We can call aviation mass transport. , says Sanovicz.

The shock is worrying because it comes at a time when the sector has been celebrating the beginning of a more consistent recovery after the shock of the pandemic on aviation operations worldwide.

Joana Cunha with Andressa Motter and Ana Paula Branco