São Paulo, 27 January 2011 – TAM Airlines estimates that for 2011 the demand in the domestic Brazilian market will grow between 15% and 18%. The company’s analysis indicates that demand will remain strong, driven by both passengers flying on business and for leisure. Historically, growth in demand in the Brazilian domestic aviation market has a strong correlation with GDP growth.
"In 2010 we observed a change in passenger profile in Brazil, with the migration of travellers from buses to airlines, especially on journeys of more than 800 kilometres. In line with this trend, still in 2010, TAM started its retail project, because we believe that much of the growth in the coming years will come from middle class Brazilians that will fly for the first time”, says Líbano Barroso, TAM Airlines’ CEO.
Aligned with demand growth, the company will increase its supply by increasing the fleet by seven aircraft; this includes two Airbus A330s, two A321s and three A319s.
“We will also continue to optimize our costs through the healthy utilization of our aircraft in the domestic market, growing our supply from 10% to 14%. In the international market the supply will grow 10% with the launch of two new frequencies or destinations”, explains Marco Antonio Bologna, TAM S.A.’s CEO.
TAM Airlines expects that its retail project will increase the volume of passengers at off-peak hours, and this will contribute to an increase in overall load factors. In the Brazilian domestic market, TAM Airlines expects its load factors in 2011 to be in a range of from 67.5% to 70%, while in the international market the expected average is 83%. This combination of events leads the company to believe that the recovery of the yield will coexist with considerable growth in demand.
With the dilution of fixed costs and the company’s cost reduction efforts, TAM Airlines is expected to reduce its costs per available seat kilometre (CASK), excluding fuel costs, by 5% in 2011.
TAM will monitor its estimates quarterly and, in case of significant changes in market, macroeconomic or internal conditions, the forecasted indicators will be reviewed.
Provision on future information:
This notice may contain estimates for future events. These estimates merely reflect the expectations of the Company’s management, and involve risks uncertainties. The Company is not responsible for investment operations or decisions taken based on information contained in this communication. These estimates are subject to changes without prior notice.