Avianca To Add Eight Airbus Planes To Brazil Fleet

June 21, 2012

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Avianca Brazil will add eight Airbus jets this year, growing its fleet by nearly a third and keeping downward pressure on ticket prices in a market where the biggest airlines are struggling to restore profits.

Avianca's chief executive Jose Efromovich told reporters that the airline was adding three more planes than originally planned due to better-than-expected passenger traffic.

The planes are part of nearly BRR3 billion reais (USD$1.5 billion) the company plans to spend between now and 2016, according to a statement. The eight aircraft will be added to an existing fleet of 26 planes.

Avianca owner German Efromovich has hinted that the airline was looking to buy 50 new planes for its Brazil fleet for delivery by 2017.

Avianca's expansion plans are in contrast to Brazil's larger carriers, which are cutting jobs and capacity to restore profits after heavy losses last year.

Gol lost BRR710 million reais in 2011 and is bringing in a new chief executive as it shrinks its workforce by nearly 1,000 and cuts at least 80 flights daily.

Market leader TAM, which lost BRR335 million reais last year, is set to complete its takeover this week by Chile's LAN Airlines, which some analysts expect will transfer planes in Brazil to faster-growing countries in Latin America.

After years of double-digit growth, Brazil's air passenger traffic slowed sharply in recent months, advancing just a few percent from a year earlier as high fuel prices, crowded airports and a stagnant economy weighed.

But the promise of a growing middle class and international traffic to the 2014 World Cup and the 2016 Olympic Games has still attracted aviation investments in Latin America's biggest economy.

Recent consolidation among Brazilian airlines left Avianca in a more distant fourth place. Rivals Trip and Azul announced a merger last month to create Brazil's third-biggest carrier with about 14 percent of the domestic market, nearly three times Avianca's share.

Efromovich controls AviancaTaca, a tie-up with El Salvador's Taca, as well as the separately operated Avianca Brazil. The AviancaTaca group is one of the region's leading commercial carriers with more than 100 routes in 14 countries.

(Reuters)