Business Aviation in Latin America

 - September 12, 2006, 9:05 AM

Brazil’s largest business aviation services company, Líder Aviação, continues to spread its wings into new areas and anticipates a revenue increase of 40 percent this year.

“This has been a great year in terms of aircraft sales, charter services and offshore operations,” said Líder director Junia Hermont.

Belo Horizonte-based Líder attributes its rapid expansion to the growth of offshore gas and oil operations in Brazil. Earlier this year, the company received $41 million in financing from the U.S. Export-Import Bank to acquire six Sikorsky S-76C++s, which will bring the company’s offshore operations fleet to 16 aircraft.

Líder is the largest offshore helicopter charter operator in Brazil, and its acquisition of the six Sikorskys is part of a strategy to solidify that position, said Líder CEO Eduardo de Pereira Vaz.

Líder recently signed an agreement with Brazilian airport management company Infraero to expand its operations in Vitória, the capital of Esprito Santo. With the contract, Líder will have its own hangar, which can be used for offshore operations and executive aviation services. “With the recent oil discoveries in the region, demand for services in Vitória has been growing fast, and Líder wanted to be able to offer a broad range of services to its clients,” said Hermont.

Líder anticipates annual demand for its executive charter services to increase by 15 percent this year, in part due to travel requirements of those involved in the presidential and congressional elections. While the company has no short-term plans to expand its fleet of 15 charter aircraft, Hermont said Líder has been pleased with an increase in the number of hours flown per aircraft.

Líder has also expanded into aircraft management services, a move Hermont said has posted positive returns. “Businessmen don’t have the time to manage all the details of their aircraft and prefer to outsource these services,” she noted. With the addition of management services, Líder has seen overall demand for aviation services increase substantially.

Hermont said the company will also be expanding its relationship with Eurocopter later this year, which could further add to service-related revenues.

As for aircraft sales, Hermont said numbers have been strong this year to date, with sales of seven airplanes and one helicopter, and that Líder will surpass last year’s sales levels of 12 aircraft. “Sales are usually stronger in the second half of the year,” she said. And she added that there is a changing attitude among Brazilian business people with respect to aircraft ownership. “We’re seeing a lot of interest from companies that have never owned airplanes and [we] believe the industry is going to continue to expand.”

If there is a single factor inhibiting sales, it is lengthy backlogs. “Clients would like to receive their aircraft sooner, but with increased sales worldwide, it’s unlikely this will improve anytime soon,” concluded Hermont.