Air Transport World

Bumpy business in South America. (air freight service)(includes article on Federal Express)

Sao Paulo-Keeping your pace according to music being played is how the air-cargo business relates to its surrounding political/ economic environment. The performance becomes quite difficult when the floor beneath your feet also moves, sometimes turning quickly or bouncing up and down at a neck-breaking rhythm.

This is the best description of prospects for the early 90s at three of the most important air-freight markets in South America as they try to grow in the face of austerity programs, government monopolies and shortages of facilities.

in Brazil, the most industrialized country in the region, an aggressive foreign-trade policy resulted in 15% of all exports being shipped by air during the 1980s. And domestic traffic has been significant by far compared with national traffic anywhere else in this part of the world. Last year, domestic FTKs for the four major carriers increased 39.3% over 1988. One carrier, VASP, had its best year ever, posting an increase of 51.6% in FTKS.

Capacity always was below market needs and by year end, the government recognized this by granting rights to four entirely new all-cargo operators. One of these, a joint venture between a local company and the Australian conglomerate TNT, went after synergy by planning intermodality with its own fleet of trucks in Brazil. Varig, the largest South American carrier, enjoyed good international results.

Last year, for example, Varig's cargo revenues were $282 million, 23% of its total revenues. The airline operates a fleet of six Boeing 727-100 freighters, two DC-1030Fs, three Boeing 747-200 Combis and two 747-300 Combis. Between 1987 and 1989, its international FTKs jumped from 1.578 billion to 1.779 billion and 2.051 billion respectively.

Other carriers showed confidence in the market, too. Lufthansa, which operates five Combi and two full-cargo weekly frequencies into Brazil, announced plans to begin one more all-cargo service, although the plans did not come to fruition. …

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