Avianca Brazil plans to add 50 new planes to its fleet in the next five years, an expansion valued at nearly USD$4 billion that could weigh on Brazilian airline ticket prices in coming years.
German Efromovich, the airline's owner, said on Thursday a contract for the aircraft could go to Airbus or Boeing this year, with delivery in two to five years. Efromovich, who spoke on the sidelines of Chile's FIDAE regional air show, also controls AviancaTaca, a tie-up with El Salvador's Taca.
The airline's aggressive Brazilian growth plan is likely to keep pressure on Brazil's two biggest carriers, TAM and Gol, which posted steep losses last year on fuel costs and a glut of new flights in the market.
Avianca boosted its capacity in Brazil by nearly 70 percent in the 12 months to January, aggravating a battle for market share that drove down ticket prices and profit margins.
Both TAM and Gol forecast modest growth and rising prices this year. TAM trimmed its 2012 fleet plan and Gol said on Tuesday it would cut 100 flights per day to help reduce costs and restore profitability.
Robust consumer spending and economic growth above the global average have attracted huge aviation investments in Latin America's biggest economy, especially as it prepares to host the 2014 World Cup and the 2016 Olympic Games.
Airbus and Boeing on Tuesday laid out their forecasts for Latin America, where they see a market for 100 new commercial aircraft or more yearly for the next two decades.