The average airfare price in 2020 was the lowest in 20 years

According to the Domestic Airfares Report (in Portuguese only)., published on March 2^nd, by the National Civil Aviation Agency (ANAC), the average price of the fare sold in 2020 was R$ 376.29. This was the lowest annual value recorded since the beginning of the times series, which began in 2002. In comparison with the same period in 2019, when the fare was R$ 439.89, the average ticket price retreated by 14.5%.

From January to December 2020, approximately 9% of airline tickets were sold with fares below R$ 100.00 and 53% with a face value below R$ 300.00. Tickets above R$ 1,500.00 represented 1.5% of the total amount sold. In 2019, the percentage of tickets sold below R$ 100.00 represented 5.5% of the total. In the same period, 44.3% of tickets were sold for less than R$ 300.00.

In the 4th quarter of the year, the domestic airfare showed a retraction of 8.3% compared to the same period of 2019, being sold for R$ 412.90. The index had a reduction in all quarters of the year. In the same period, the price per kilometer flown (Yield Average Domestic Airfare) was R$ 0.3001, down 19.5% compared to the 4th quarter of the previous year.

The three Brazilian airlines with the largest market share – which accounted for 99.4% of the demand for domestic air transport of passengers – recorded a reduction in the average domestic fare accumulated in 2020, compared with the same period of the previous year.

Gol had the lowest average fare in 2020, R$ 347.58, a 16.9% lower fare compared to the previous year. Next came Latam, with an average value of R$ 359.50, a reduction of 13.4%; and Azul, with R$436.90 – 13.3% less than the values seen a year earlier.

Industry components and costs that influenced the fare price

Regarding the most significant industry costs, from September to December 2020, in comparison with the same months in 2019, the price of fuel showed relatively lower values, while the exchange rate rose in the period. Aviation kerosene, which corresponds to about 30% of the operating costs and expenses of air transport services provided by Brazilian companies, had an average price 18.6% lower than in the 4th quarter of last year.

The exchange rate oscillated during the last quarter of the year. In October, the exchange rate was 5.63 R$/US$, going to 5.42 R$/US$ in November and to 5.15/US$ in December. On average in the 4th quarter, the exchange rate was 31.1% higher than in the same period of 2019. The exchange rate has a strong influence on the costs of fuel, leasing, maintenance, and aircraft insurance, which altogether account for about 50% of air service costs and expenses.

Annual context of the industry

The year 2020 was marked by the most severe health crisis experienced in a century, which consequently hit the world economy hard, especially civil aviation. The new coronavirus caused the adoption of sanitary measures and border control between countries, resulting on major impacts on commercial aviation.

As a result of the pandemic, in the first months of the year, the offer of flights decreased more than 90% in Brazilian air transport. In the year-to-date, compared to 2019, the supply presented a retraction of 47% in the domestic market. In the comparison between periods, 2020 showed a reduction of 52.5% in the number of paid passengers transported. It was the lowest amount since 2006.

Methodology of the airfare report

In compliance with Resolution 140/2010, the data are registered monthly with ANAC by the Brazilian scheduled public air transport companies based on tickets actually sold to adult passengers for domestic flights on all airlines in public offers.

The face value of the air fare registered with ANAC corresponds to the remuneration of public air transport services and does not include the value of the boarding fee or the value of optional services. The data of tickets sold under special conditions, such as customer loyalty programs, corporate fares, tour packages, fares for groups of passengers, gratuities, fares for employees and children are not subject to registration.

Before publication, the data are subject to inspection by ANAC to verify their consistency and timing. In case of an infringement, the company is subject to an administrative proceeding that may result in the application of administrative penalties.