War in Ukraine slowing down long-awaited recovery of Brazil’s travel industry

On March 7, the share prices of the three largest travel sector companies listed on the Brazilian stock exchange B3 – airlines Azul and Gol, and travel agent CVC – plummeted to their lowest values in more than a year, with falls of 18, 17.36, and 10.49 percent, respectively. The three, along with oil and gas giant Petrobras, were principally responsible for the drop in Ibovespa, the benchmark stock index, that day.

This was related to another major price fluctuation: on the same day, Brent crude oil hit its highest level since mid-2008, after the U.S. began considering blocking imports from Russia.

The losses did not end there. During the first 15 days of the war in Ukraine, the three travel companies in question lost BRL 3.4 billion in market value. According to a calculation made by Onfly, a travel management startup, Azul, Gol, and CVC lost 21 percent of their market value between the Ibovespa trading sessions of February 24 — when the conflict began — and March 11.

These were among the index’s biggest losses in the period. (CVC has rallied in the stock market since posting the first positive earnings before interest, taxes, depreciation, and amortization in two years.)

After two years of pandemic, the national tourism sector had been preparing for recovery, but  the war has seen takeoff postponed once again. The first factor is of course the price of oil, which especially impacts airlines. 

Russia is one of the world’s largest oil...