Air Transport World

Rio Sul & Varig: Brazil's closest brush with U.S.-style alignments. (The Regionals of Brazil - part 2)

Rio Sul & Varig: Brazil's closest brush with U.S.-style alignments

Although no longer the nation's capital, this city remains the focus of many outsiders' impressions of Brazil. It is here, in the home city of Rio Sul Servicos Aereos Regionais S.A., where the links between Brazil's large and small airlines most closely parallel the synergies of North America's code-sharing regionals.

Rio Sul started life in September 1976 as part of the Brazilian government's program to establish five regionals charged with serving segregated, protected market areas (ATW, 3/87). Before reaching its 10th anniversary of operation, Rio Sul grew from serving 11 cities to 35.

Such growth seems surprising for a carrier that faces Brazil's most extensive offering of transportation alternatives. As Dr. Humberto J. de A. Costa, president of Rio Sul since 1982, explained it, "The state of Sao Paulo, where TAM is based, is the industrial engine that pulls the rest of the country. Rio Sul is the caboose.' While the executives of TAM, another southern regional, may disagree with Costa's assessment, government statistics show that TAM consistently reaps the highest market share. The reason for Rio Sul's lament is that with similar population pools to draw from, TAM's region has more business travelers who are easily pulled away from the network of roads that crisscross its region.

1986 record year

But Rio Sul's plan to expand further its route network stems from past success in attracting passengers. Growth in passenger boardings tracked closely Rio Sul's expanding route network. In fact, of Brazil's five regional carriers, only Rio Sul enjoyed growth in boardings every year since 1981, when the airline boarded 113,659 passengers. Growth averaged less than 10% for 1982 through 1985 before boardings shot up in 1986. …

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