Agreement: Lisbon strengthened as the main hub between Europe and Brazil

Friday 28 June saw the finalisation of a new agreement on air services between Portugal and the Netherlands. Brazil, open sky agreement which eliminates the last remaining restrictions on the transport of passengers and freight. Signed between the civil aviation authorities of the two countries, the memorandum of understanding takes immediate effect and should result in an increase in the number of flights between the two countriesThis also includes the possibility of connections with third countries. Within this framework, Brazilian and Portuguese airlines will benefit from so-called fifth freedom rights, i.e. the right of an air carrier to embark and disembark passengers at intermediate points, for example in other European Union or South American countries. Other aspects of the agreement include full liberalisation of capacity, services, fares and code-sharing opportunities.

In fact, this agreement confirms the role of Portugal - and Lisbon in particular - as the Europe's natural gateway to Brazil, and vice versa. If we refer to the figures published by Eurostat for 2018, Portugal dominates the Europe-Brazil routes market. Out of 6.35 million passengers between the two countries, Portugal had a market share of 31,3 %That's almost two million passengers. This result puts the country well ahead of Spain, the second largest market with 1.1 million passengers a year to and from Brazil, and France, which ranks third with traffic approaching one million passengers.

In Portugal, the airports of Porto and especially Lisbon are both linked to Brazil. Three airlines share the market with Azul and LATAM on the Brazilian side and, in a dominant position, TAP Air Portugal. The Lusitanian company offers flights to 11 destinations in Brazil and carried over 1.7 million passengers on these routes in 2018, an increase of 7.8 % over 2017.

The entry into force of the new open skies agreement comes at just the right time for the carrier, which is in the process of modernising its long-haul fleet with the delivery of new Airbus A321LR and Airbus A330neo aircraft. TAP is the launch airline for the latter model, for which it has ordered 21 aircraft. It has already taken delivery of ten aircraft, three of which were delivered in June alone. Some of these aircraft have already entered service on routes to Brazil.

The arrival of the Airbus A321LR, the long-haul version of this single-aisle jet, will also make it possible to densify the network between Portugal and Brazil. The aircraft offers comfort similar to that of a long-haul aircraft in both business and economy class. But its small capacity of 128 seats - including 16 seat-beds in business class - will enable TAP to target new secondary destinations.

The company has already announced its intention to strengthen certain links with the A321LR, notably to Recife, Natal, Fortaleza and Salvador de Bahia from Lisbon, as well as between Porto and Sao Paulo. It is also studying the opening of a route to Maceio, a city of one million inhabitants on the coast between Recife and Salvador de Bahia. Capital of the state of Alagoas, this regional metropolis is a major centre for chemicals, sugar and ethanol production. A link to Lisbon would be the first of its kind.

Table: Evolution of passenger traffic between Brazil and the main European Union countries

(Source: Eurostat)