SAC ELEVATOR BRIEFING No. 4
Dear valued reader,
The Aviation Sector worldwide knew COVID-19 would leave nasty scars but everyone was hoping for a steady recovery within the 2nd half of this year. Fact is that while Europe is trying to open up its markets the virus is still raging in some areas thereby restricting free movement and posing great risks for travelers. East-Asia, that seemed to be well ahead in fighting the virus announced to block all border crossings for foreigners until end of August (or longer) and the Americas are still stuck in the middle of a desperate fight for saving lives and recovering stability. Reason enough to take a closer look at the once promising market of Brazil.
Impact of the Corona Virus Pandemic on the Brazilian Aviation Sector
COVID19 has had a dramatic effect on all sectors of life in Brazil and air transportation is no exception. First, the commercial aviation sector has been decimated, with flight schedules being cut by 90%, massive pay cuts for pilots and personnel, and hundreds of aircraft parked. Avianca first filed for bankruptcy protection and now is liquidating altogether. The other airlines are fighting for survival – all of which means that moving around the country just got much more difficult in the last 100 days.
Second, the private aviation sector has also been hit hard with most aircraft flying reduced schedules or going into storage until conditions improve. However, a rush to sell aircraft has not occurred, as most owners know they will need their private aircraft to move around the country and rebuild their businesses. Many are taking a wait and see attitude. The bright spot in Brazilian private aviation is in the agribusiness sector, where the devalued Real is bringing a 30%-40% increase in revenue in Reais as most contracts for commodities are in US dollars. This influx of cash, plus an increased need to travel and limited airline schedules is causing a need for aircraft in this part of the economy. Overall, the Brazil aviation industry is robust and commercial airlines will make a slow comeback, with private aviation leading the way. Historically Brazil has bounced back from recessions and economic crises fairly quickly and this should be no exception.
SAC Business Review
SAC is enhancing its presence in Asia adding an Aircraft Surveyor based in Hong Kong to better serve our clients’ needs in the region. Hong Kong is one of the busiest business aviation airports in the Asian region with many of the top tier operators based there.
SAC’s Asset Management unit has seen a strong rise in demand for its services globally. While some of our consultants were supporting a client with an aircraft transaction in Africa, our team was also conducting aircraft reviews in Belo Horizonte, Brazil and several other locations in Europe and Southeast Asia.
Meet the SAC Team
Name: Vilmar Strobl
Job Title: Associate Partner, Swiss Aviation Consulting
Location: Cidade Nova II, Campinas, Brazil
Vilmar, what is your background and what competences and experience do you have?
“My father worked for VARIG BRAZILIAN AIRLINES, so I grew up in the aviation world.
At the age of 18 I graduated as Aircraft Maintenance Technician in São Paulo and with two more years of school I got approved for my ANAC license.
Soon I performed heavy maintenance and line maintenance for VARIG at their major hubs. In 1991 I moved to Switzerland and got involved in business aviation maintenance focusing more on maintenance inspections (EASA license), troubleshooting and engine runs. In the year 2000 I obtained my FAA mechanic license and worked for Continental Airlines for more than 5 years before engaging in sales and CRM for technical services back in Switzerland. From 2011 on I worked in Continuing Airworthiness Management for business jets such as Citation, Challenger, Gulfstream and Falcon. Since 2017 I am back in Brazil as Aeronautical Consultant and Associate Partner of Swiss Aviation Consulting.”
What are the challenges of business aviation in Brazil?
“Having in mind the territorial extension of Brazil and the difficulty of adapting to the geographic needs of each state, general aviation is quite diverse in many aspects and needs.
Rivers predominate the northern regions (Amazon). In the vast central region gravel runways are most common and in the most developed south-eastern (São Paulo) and southern region modern runways are equipped with the latest available equipment. For each of these regions there is a specific way to approach customers and to deal with their needs.
Due to the lack of technical support in the northern and central regions of Brazil many aircraft owners bring their aircraft for maintenance, repair and modifications to south-eastern (São Paulo) where most of the well-equipped hangars are placed.
Another big challenge for the aircraft owners as well as for the airlines is the US Dollar rate fluctuation making it really hard to keep up operations in all aspects. But we are still a young country with a lot of unexplored resources and a great future to come.”
What do you like about your work?
“During work I very much enjoy meeting the people involved with the operations and maintenance of each aircraft. Having a good conversation and getting to know their day to day work makes every inspection a pleasant and inspiring experience. Aviation is a people business… and a very small world.”
What do you enjoy doing when you are not working?
“In my free time I like to follow Formula 1, learning the latest developments and rules, working on the restoration of my 1973 sport classic car and travelling.”
What is something most people don’t know about you?
At the beginning of 2020, after a long career well consolidated in the technical area, I was invited to teach aviation to young students at EDAPA Aviation School. I currently teach Aeronautical Inspection principles and Fuel Systems. It is a great feeling as the students are very receptive and eager to learn.”