In this blog, we explore Brazil’s domestic air capacity using just three key data points – for a quick, yet insightful delve into this fascinating market.

KEY POINTS:

• Still Below Peak Levels: Brazil is the fifth-largest domestic aviation market, yet capacity remains 9% under its 2015 peak, indicating limited growth over the past decade.
• Concentrated Market Power: Three airlines - LATAM Airlines Group (38%), GOL (32%) and Azul (30%) – dominate the domestic market which has led to interesting dynamics on the busiest routes.
• High Daily Flight Frequency: The CGH–SDU route (São Paulo to Rio de Janeiro) averages 51 daily flights - more than the busiest U.S. and Chinese domestic routes, and second only to Japan's HND–CTS route.
• Azul’s Chapter 11 Raises Questions: Azul’s bankruptcy filing hasn’t yet impacted operations in Brazil, but what could it mean for the future? 

Brazil ranks as the fifth-largest domestic air capacity market in the world. However, unlike some of the other large markets, seats remain some 9% below where they were over a decade ago, back in 2015.  Then, domestic air capacity reached 261.4m, the highest point in the period 2015-2024.  The equivalent figure in 2024 was 238m. This lack of growth suggests a number of issues: the air service market is mature, economic growth in Brazil is sluggish, and quite possibly that the barriers to entry for new airlines to stimulate growth is significantly high.

With a population of 212m, and an estimated propensity to fly of 0.5 , this suggests that there may still be scope for growth in air travel within Brazil. Compare this to the US which has a population of 330m and propensity to fly is over 2.5, although the economy in the US is considerably stronger, with typical GDP per capita of $85,000 which is around 8 times larger than Brazil’s $10,000 per capita.  A closer benchmark may be Mexico, where propensity to fly amongst the 131m population is 0.8. 

In 2025, capacity is expected to grow year-on-year, but still may not reach above the previous high point. 

CHART 1: Brazil's Domestic Air Capacity Year-on-Year

Capacity in Brazil’s domestic market is shared evenly across three carriers:

• LATAM Airlines Group has the largest share, with 38% of seats; this strengthens its position from last year where it held a 36% share.
• GOL is in second place with 32% of seats.
• Azul makes up the remaining 30%.

CHART 2: Brazil's Domestic Capacity Share by Carriers

Having three big players in the domestic market has created some interesting dynamics on some of Brazil’s busiest routes. The busiest route in Brazil’s domestic market is from São Paulo’s Congonhas Airport (CGH) to Rio’s Santos Dumont Airport (SDU), and this July there are 51 departing flights on average each day. This route has the second-highest daily frequency among the busiest domestic routes in the world’s largest markets. Only Japan’s Tokyo Haneda (HND) to Chitose (CTS) is higher, with an average of 55 departing flights each day this July. 

CHART 3: Daily Frequency on the World's Busiest Domestic Routes

Brazil’s busiest domestic route exceeds the daily frequencies of the busiest routes in the United States, China, and India:

• The busiest route in the US this July operates from New York’s La Guardia Airport (LGA) to Chicago’s O’Hare Airport (ORD) with a mere 33 daily departures.
• In China, the busiest route operates between Shanghai (SHA) and Shenzhen (SZX), with an average of 41 daily departures.
• India’s key domestic trunk route is the only one that gets close to Brazil’s frequency, with 48 daily departures between Delhi (DEL) and Mumbai (BOM).

With Azul - one of Brazil’s leading carriers - recently filing for Chapter 11 bankruptcy protection, its domestic network could come under review. So far, however, operations have remained intact. Could this lead to a scaling back of some of the country’s high-frequency domestic routes in the near future? That seems unlikely. Brazil’s air travel market has become accustomed to near on-demand service levels, and any significant reduction in frequency would represent a major shift in passenger expectations and competitive dynamics.

What does 'propensity to fly' mean?

Propensity to fly is the average number of trips by air taken by a population.