Brazil aerospace sector seeks to dodge economic turbulence

Brazil may be in the midst of an economic storm, but sitting back in a leather seat on Embraer's latest luxury jet, Gustavo Teixeira says the aviation industry is dodging the turbulence.

The crisis "is on our radar but hasn't hurt us," the Embraer executive said in an interview aboard a glistening Legacy 500 jet displayed at the inaugural International Brazil Air Show, held at Rio de Janeiro's Tom Jobim Airport.

Brazil, Latin America's biggest economy, may be best known right now for a deep recession, political instability and a mammoth corruption scandal ripping through the political leadership.

But the first ever Rio air show, backed by Airbus, Saab, Lufthansa, the IATA travel industry association and other international players, hopes to show that aviation opportunities in Brazil and across Latin America are sky high.

"This is the right time. During a crisis, you need to bring people together," Paula Faria, director of the air show, told AFP.

According to the Brazilian Aviation Institute, two years of recession have taken a measureable toll.

The country's fleet of commercial planes fell from 727 to 686 in 2016, while the overall stock of planes rose just 0.1 percent to 21,895.

However, the aviation institute's president, Francisco Lyra, said the industry is "resilient" and that Brazil is a sure bet when it comes to air travel investment.

"In a continent-sized country the only practical, efficient way of traveling is by plane," he said in a speech.

- Think globally -

Embraer is the third biggest airplane manufacturer after Boeing and Airbus, an unusually prominent Brazilian high-tech success story with a strong line in executive jets.

Speaking aboard the Legacy 500, which seats up to 12 passengers and has a $21.5 million price tag, Teixeira said the secret was having a global footprint.

Embraer exports about 90 percent of its production and the biggest market is North America, so while "there's a regional component, it doesn't have a big impact," said Teixeira, sales director for Latin America.

"When Brazil's credit rating went down, Embraer's credit rating remained at investment level. People understand the quality of our product, the quality of our service and they understand that we are a global player."

Rafael Alonso, Airbus president for Latin America and Caribbean, told AFP that while airlines were looking to delay new Airbus deliveries because of falling passenger numbers, Latin America's growing middle class means plenty of potential for the European giant.

"Brazil has just had its biggest crisis in history but we are seeing signs of recovery and the indicators are starting to look a bit more optimistic," he said. 

"Brazil is a country with currently less than 0.5 (air) trips per inhabitant and we predict that by 2035, this will more than double."

Teixeira said small, nimble executive jets will also continue to take off. Even if they seem like the ultimate luxury, in huge countries like Brazil business leaders may find them a necessity.

"Brazil has 5,500 municipalities and of these, about 130 are served by commercial aviation," he said. "But if I'm not from these 130, how am I going to get around?"

source: AFP