Are GRU / GIG a major opportunity for SN and BRU ?

[quixoticguide]

http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG


The GDP growth is not relevant for to fly to a country.

[RoMax]

http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG
The GDP growth is not relevant for to fly to a country.

That depends, there is a direct relation between GDP (at least GDP per capita) and the propensity to fly of the local 'population' (in the broad sense of the word, can also be people working in the region which is often a result of a growing economy/GDP at least in case if this goes hand in hand with international investments, which is the case for Brazil altough it is not easy to do business in Brazil, you really need local contacts), but there are other factors which also influence this and eventually the propensity to fly flattens even with continuing GDP growth (that's the case in more mature markets, Brazil is not yet at that stage).

But (and in that I have to agree with Flanker) GDP is just one of many indicators. Import/export indeed is one of the other main factors, but realise that this does have a close relation with GDP development as well. Import and export in Brazil has been weaker than expected in 2013 as well and the expections for 2014 have been lowered. Also many of the major import/export goods/products of Brazil have a very limited relation with airline/passengers development.

This is no black or white story, you have to include numerous economic, demographic, strategic (airline wise),... factors.

[convair]

This is no black or white story, you have to include numerous economic, demographic, strategic (airline wise),... factors.

And geography!
For the same GDP per capita, domestic "flying" will always be bigger in Brazil than in e.g. Italy, not to mention Belgium!

[RoMax]

And geography!
For the same GDP per capita, internal "flying" will always be bigger in Brazil than in e.g. Italy, not to mention Belgium!

Indeed very true (there are more factors than those I gave, that's why I added the "..." :p ). In Brazil you have lots of people flying daily between the city they live and the city they work. Often not that far from eachother, but due to the lack of surface transport modes they have to fly for a convenient connection. Increased economic activity will result in more people flying, but in case of SN, you always have to wonder how much of that extra traffic will be intercontinental and what's the reason they fly. For example GIG, besides GRU the second Brazilian gateway. Of their 17 million passengers per year, only 25% is international and of that 25% there is a large share of continental routes (mainly Argentina, but also Colombia, Chile, Panama,...). Depending on the airport the share of international traffic is not even always growing, but many people only see the final growth numbers which often indicate huge growths indeed, but mainly on the domestic routes.

[quixoticguide]

That depends, there is a direct relation between GDP (at least GDP per capita) and the propensity to fly of the local 'population'.

And SN flies to 3 of the 5 countries with the lowest GDP in the world: Burundi ,Congo, Dem. Rep. and Liberia.

[RoMax]

That depends, there is a direct relation between GDP (at least GDP per capita) and the propensity to fly of the local 'population'.

And SN flies to 3 of the 5 countries with the lowest GDP in the world: Burundi ,Congo, Dem. Rep. and Liberia.

Fact is that there is a direct relation between GDP and propensity to fly. That SN serves these countries mainly thanks to the historic developments of Sabena on the African continent, doesn't mean there is a high propensity to fly in these countries.
To make it more accurate, depending on the market and the period we are talking about 65 to 80 percent of growth in air travel is a direct result from growing economic activity measured in GDP, the remaining 20-35 is not directly related to GDP growth. For example for traffic forecasts, GDP is ALWAYS included as the main factor, but mostly a certain additional factor (which is totally depending on the exact location (which determines demographics, geography,...) and the period we that's being considered) is added because as I said in my previous post GDP is just one of many factors that have an influence on air traffic development and usually air traffic development is above the growth in GDP (which is also something we see in mature western markets).

But the above only goes for a complete market, not for a single airline/route, that's also why your example of SN flying to some countries with the lowest GDP in the world, actually doesn't make sense. In the case of Brazil-SN there are many other things that have to be considered. But in your post this morning you stated GDP is not relevant and that's simply not true at all. It's just not the complete story.

[quixoticguide]

Only the GDP is not relevant. I agree with a factor in the complete story

[RoMax]

Only the GDP is not relevant.

GDP IS relevant... Just because we look at a certain route, it is just not the whole story, you have to include other elements to get the whole picture, that doesn't mean GDP is suddenly not relevant anymore.