Brazil's domestic air traffic bounces back to pre-pandemic levels

The number of passengers using Brazilian airports for domestic flights finally rose above pre-pandemic figures in May.

The number of passengers on domestic flights in Brazil reached 7.29mn in the month, up 14.8% year-on-year, according to figures from civil aviation authority Anac.

That figure is also higher than in May 2019, when it reached 7.06mn, before the pandemic hit the industry, demonstrating that the rebound is underway and suggesting that the corner has been turned for the airport and air travel sectors.

"I believe that the worst is over and not only in Brazil. There is an upward trend in domestic and international travel. In some cases, it may even exceed demand in the pre-pandemic period," Paulo Dantas, an infrastructure and project finance specialist at law firm Castro Barros Advogados, told BNamericas.  

In March 2020, Brazilian authorities announced a series of severe restrictions on public travel, including limits on international and domestic travel in an attempt to contain the advance of COVID-19, in line with similar measures in other countries. 

Despite the growth seen in May, the recovery is still slow in terms of international flights. During the month, the number of passengers on international flights reached 1.58mn, up from 1.19mn in May 2022, but that was still well below the 1.84mn reported in May 2019, according to Anac figures.

Dantas said that although passenger numbers are showing signs of recovery to pre-pandemic levels, some airport operators that signed concession contracts in the past, are indicating that they may ask the government to adjust their contracts to account for the lower-than-expected traffic.

"The airports in the first [concession] rounds had demand studies that weren’t proven even before the pandemic. These airports will still have some difficulties and it may be that requests for review will still be made. In the case of more recently awarded airports, the market analysis was different and closer to reality. However, as all infrastructure contracts are long-term, it is always reasonable to assume that there will be a request for review," said Dantas.

RIO AIRPORTS 

While the sector recovers in terms of passengers, it remains uncertain whether the planned concessions for two airports in Rio de Janeiro state – Santos Dumont and Galeão – can move forward.

The country's airport sector is now mostly run by the private sector, following in the footsteps of the national telecommunications and electric power industries, but doubts remain for these two airports and the federal and state governments are currently negotiating a strategy to deal with them.

The company RIOGaleão, controlled by Singapore's Changi Airport Group, announced plans last year to return the concession for the Galeão airport to the government, despite the contract being valid until 2039, due to falling passenger numbers.

The federal government was therefore planning to reassume control and then offer a new concession contract combining Galeão and Santos Dumont.

However, the Rio de Janeiro state government is not in favor of that strategy as it sees that as a risk to the continuity of both airports and claims that the number of flights must be better divided between the two. Galeão currently handles more international flights and Santos Dumont is busier, serving domestic flights.