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Fitch sees Brazilian aviation recovering faster than Latin American aviation

Image: Portal da Copa / CC BY 3.0 BR (https://creativecommons.org/licenses/by/3.0/br/deed.en)

Fitch Ratings, one of the three largest credit risk rating agencies in the world, released an analysis announcing the expectation of a slower recovery in global air traffic. For the biennium 2020/2021, the agency forecasts a decline in passenger demand above the global average in Latin America.

It is estimated that traffic in 2021 will decrease by more than 30% compared to 2019, the study reference year. Previously, the expected decrease was around 20%. Global air traffic is not expected to return to 2019 levels before 2024, but the pace of recovery is different between regions on the planet. The result reflects the still high infection rate from the new coronavirus and the restrictions on air traffic imposed in many countries.

Selected Brazil

In Latin America, Fitch expects a decline above the global average, with the exception of Brazil, which is recovering better than its neighbors on the continent. In this region, forecasts suggest that in 2020 demand for air travel will decrease by 75% compared to 2019. There will be a slight recovery in 2021, but still with an overall decrease of 50% from last year.

The region’s numbers are not only worse because of the Brazilian domestic market. The recovery in Brazil is better than expected. Preliminary traffic to the two largest companies in the country as of September 2020 is about 50% lower than last year, better than companies of other nationalities. Fitch predicts a drop of around 50% to 55% in 2020 and a 20% drop in 2021.

The agency recently published an analysis from Guarulhos International Airport (SP). For the facility, the São Paulo terminal will not return to operational level until 2023. Despite the extension, the recovery phase for the country’s largest airport will recover better than the global and regional average.

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