Today, what the future holds for Brazilian airlines. New restrictive measures amid a second wave. And the woes of remote work in pandemic times.
Are Brazilian airlines poised for a rally?
Without a doubt, the aviation industry was one of the sectors hit the hardest by the pandemic. But November demonstrated a spectacular rally for major airlines, with shares of Gol and Azul gaining 53 and 70 percent, respectively. The resurgence continued on Monday, even as states began rolling back their reopening processes ahead of a potential second coronavirus wave (more below).
What is behind the rally. A few reasons explain the recent recovery, among them:
- Improved cash flow: Azul and Gol renegotiated aircraft leases, reduced costs, and postponed the delivery of new planes. They have also frozen investment and reduced wages under a federal program to help companies during the pandemic.
- Demand is creeping back: In Q2, Gol and Azul suffered a decline in demand of 90 and 84 percent, respectively. But that number has been climbing back up, and Gol plans to end the year with 500 daily flights — 60 percent of its pre-pandemic levels.
- The dollar plunge: Airlines have many of their expenses pegged to...