The CEO of Azul Linhas Aéreas, John Rodgerson, who has been with the company since its inception nearly 15 years ago, has expressed his concern about the viability of the low-cost airline model in Brazil. His perspectives are based on his extensive experience, including a previous period at JetBlue.
Initially inspired by Southwest Airlines, created by Herb Kelleher, GOL (Brazil’s first low-cost airline) evolved its business model to suit the Brazilian context. Meanwhile, Webjet Linhas Aéreas (a low-cost airline that began operations in 2005 and was acquired by GOL in 2011) focused on online sales to reduce costs. However, Rodgerson notes that operating a low-cost model does not necessarily mean offering lower fares to customers.
Barriers to Low-Cost model adoption in Brazil
According to a report by our media partner Aeroin, Rodgerson cites ‘Costo Brasil‘ as a main barrier, which includes high fuel prices, a weak currency, and a high degree of litigation, disproportionately targeting the Brazilian aviation industry.
He comments on infrastructure challenges: «If a low-cost airline enters here and (for operational issues) Santos Dumont airport closes, the operator is responsible for all costs (accommodating passengers and legal fees).» This, Rodgerson asserts, makes the current low-cost model unfeasible in Brazil.
Economic impact on Brazilian travelers
Rodgerson points out that the absence of new airline entries into the market, despite regulatory changes allowing 100% foreign capital and the end of free checked baggage allowance, proves the model’s inviability. He emphasizes that this situation harms Brazil’s low-income population by forcing higher average fares.
Flybondi’s ambition: Will the Argentine airline work in Brazil?
The company that opened the low-cost Argentine market, Flybondi, has long expressed its intention to operate domestic flights in Brazil.
However, its CEO Mauricio Sana recently stated in an interview that the level of litigation mentioned by Rodgerson discourages investment in the Brazilian market. While the company would move forward in obtaining an operating certificate in the near future, a change in conditions could shake the intentions of the low-cost carrier.
