As the build-up to the FIFA World Cup in Brazil gathers pace, there are signs that the country could falter when it comes to delivering tourists and football fans to their desired destinations once in Brazil – with obvious knock-on consequences for travel retailers.

 

According to data given to TRBusiness by aviation intelligence group, OAG, there is a mismatch between airline capacity to Brazil, and within it.

 

While seat capacities into and out of Brazil in June and July – the months when the tournament takes place – are up by +13% and +7% respectively, internal seat capacity in June, the key month of the event, is down by close to -4%.

 

John Grant (below), Executive Vice President, OAG, tells TRBusiness: “Domestic capacity for June remains -3.7% less than that offered last year, but international capacity has increased by +13% year-on-year for June. So, as an overseas visitor you can get there, but once there you are stuck!”

 

CAPACITY CRUNCH

This capacity crunch has worsened since OAG first reviewed the situation in March. Then, OAG’s analytics showed that Brazil’s domestic seat capacity was down by -0.5% and -3% in June and July 2014 respectively. This is despite the Brazilian Civil Aviation Authority authorising its carriers to operate nearly 2,000 additional flights during the World Cup this summer.

 

“While this (decline) is consistent with Brazil’s trend to cut capacity, 600,000 overseas visitors are reported to be travelling to the games,” says Grant. “With the group stages of the World Cup spread between 12 cities across the country [see map], fans will need to travel huge distances to attend the matches. Air travel, in most cases, is the only realistic option – Rio to Manaus is a drive of 1,768 miles.”

 

Brazil has a well-developed domestic air network, the fourth largest in the world after the USA, China and Japan, including the world’s second largest domestic low-cost carrier network.

 

However, Brazil’s domestic market has recently been softening as the economy has slowed. As a consequence, carriers have reined in capacity according to OAG. For example, in March 2013, seat capacity was +11% higher than March 2014: 11.8m seats compared with 10.5m.

 

Grant points out: “Given the country’s good availability of low-cost carriers, football fans might be expecting competitive fares. However with demand outstripping supply, this may not happen.” According to a report from Bloomberg, TAM, one of Brazil’s biggest airlines, may charge as much as BRL 2,600 ($1,160) for a one-way ticket during the tournament.