ssides
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Joined: Fri Feb 09, 2001 12:57 am

Differences In The GIG And GRU Markets?

Thu Mar 10, 2005 6:10 am

AA has just announced a second 5x weekly DFW-GRU nonstop.

I was wondering why AA went with GRU instead of GIG. Is there a significant difference in these markets? I know Sao Paulo is a bigger business center than Rio, but is Rio really that tourist-dominated? Or is there some other reason AA chose to add to its GRU schedule instead of launching GIG?

Just curious ...
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hardiwv
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Joined: Sat Oct 09, 2004 11:30 pm

RE: Differences In The GIG And GRU Markets?

Thu Mar 10, 2005 6:29 am

Interesting question and the answer is many-fold:

Regarding the American Airlines flights, the airline decided to increase flights to GRU (5 extra DFW-GRU) and proportionally reduced flights MIA-GIG from 12 to 7 x week. One of the reasons is that here are strong rumours that partner airline TAM will start daily nonstop flights MIA-GIG (1 x week MIA-FOR-GIG).

As for the GRU-GIG comparison, GRU is much stronger market. You cannot compare both markets. GRU gets many flights that dont even stop in GIG, such as SA)">DL, AZ, LX, KL, and SA. GRU has a very strong performance on business and first class, and is considered a "premier" market for many airlines, such as AA and BA.

GIG is mainly low-yield tourist/leisure-oriented market. Tourist class always packed, but business empty. The only exception is AF, which has a stronger performance in GIG (daily B747) than GRU (daily B777).

Over the last year, however, GIG has been improving its performance based on the following grounds: 1) divertion of flights SDU to GIG, means that traffic in GIG increased considerably allowing for onward domestic connections; 2) GIG is the number one destination in Latin America for international conferences/events; and 3) GIG is the oil/gas-business center in Brazil.

But you still cannot compare GRU and GIG. GRU is the power-house of Brazil, representing 50% of Brazil's GDP and the biggest city in South America.

In addition, GRU-GIG distance is less than 500 miles, so that pax arriving in GRU could very easily connet to GIG (Sao Paulo-Rio shuttle service has about one flight every 15min).

In 2004, in fact, GIG got relegated to fourth position in Brazil, with BSB assuming the rank of Brazil's number three hub (after GRU and CGH).

Rgs,
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Differences In The GIG And GRU Markets?

Thu Mar 10, 2005 7:18 am

Quoting Hardiwv (Reply 1):
But you still cannot compare GRU / SBGR), Brazil">GRU and GIG / SBGL), Brazil">GIG. GRU / SBGR), Brazil">GRU is the power-house of Brazil, representing 50% of Brazil's GDP and the biggest city in South America.


Two things:

1. It's 32.6%, not 50%. That share has been dropping also, but in a good sense (rest of the country is growing).
2. The entire state is responsible for that figure, not the city alone. EX: Embraer's headquarters are located in SJK / SBSJ), Brazil">SJK, not S. Paulo.

Also worth mentioning that RG's GIG / SBGL), Brazil">GIG-AB) (FRA / FRF / EDDF), Germany">FRA originates in CPQ / VCP / SBKP), Brazil">CPQ (1.5 hours away from SP)

The rest is all good Smile

Cheers,

PPVRA

Edit: Wrong numbers. Data is from 7.12.2004

[Edited 2005-03-09 23:30:02]
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incitatus
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RE: Differences In The GIG And GRU Markets?

Thu Mar 10, 2005 1:36 pm

The new flights also make it more convenient to connect to/from NRT and also with the new DFW-KIX due to start in November.
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hardiwv
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RE: Differences In The GIG And GRU Markets?

Thu Mar 10, 2005 11:28 pm



Quoting Incitatus (Reply 3):
The new flights also make it more convenient to connect to/from NRT and also with the new DFW-KIX

Of course, I would say AA is also eyeing possible onward connection from its expanded DFW hub.

We have to keep in mind that Brazilians are the foreign pax that more use the US to connect onwards; and are still number one in the rank after the new US transit Visa rules.

Rgs,
 
incitatus
Posts: 2749
Joined: Wed Feb 09, 2005 1:49 am

RE: Differences In The GIG And GRU Markets?

Fri Mar 11, 2005 12:38 am



Quoting Hardiwv (Reply 4):
We have to keep in mind that Brazilians are the foreign pax that more use the US to connect onwards; and are still number one in the rank after the new US transit Visa rules.

If the RG and AA sites are correct, the elapsed time on the northbound GRU-NRT will be faster with new GRU-DFW than the one stop GRU-LAX-NRT on RG.

I think the visa rules may deter some one time travelers but at $1600 or more the passengers doing GRU-NRT are not exactly broke, so if they apply for a US visa they'll likely get one. Lots of others, especially traveling for work, may already have visas.
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hardiwv
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RE: Differences In The GIG And GRU Markets?

Fri Mar 11, 2005 12:46 am



Quoting Incitatus (Reply 5):
more the passengers doing GRU-NRT are not exactly broke, so if they apply for a US visa they'll likely get one. Lots of others, especially traveling for work, may already have visas.

Incitatus: the US Dep. of State issued an ammendment to the US transit VISA rules, and Japanese-Brazilians have now a more flexible system, in which they can apply for a fast-track procedure, and longer transit visas.

For the Brazil-Japan pax, it shouldn't be a problem for getting US VISA; it is a question of paper-work, interview and time. Otherwise, the AA flight GRU-DFW//DFW-NRT will become a strong competitor in the Brazil-Japan market. Also keep in mind that most Brazil-Japan pax have dual passport and those with Brazilian passport have Japan VISA.

Rgs,

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