Press

Rio 2016 Olympics: faster, higher, stronger?

26 Aug 2016

Brazil, the fifth largest country in the world by area and by population, covers more than eight million square kilometres of rainforest, grasslands, swamp, semi-desert, mountains and beaches...

Original story: http://www.charterbroker.aero/mag_story.html?ident…

Brazil, the fifth largest country in the world by area and by population, covers more than eight million square kilometres of rainforest, grasslands, swamp, semi-desert, mountains and beaches. The event takes place in the middle of winter; the average temperature is around 28°C and the chance of rainfall is low. It sounds lovely, but Brazil is also a country ravaged by a political corruption scandals, an economic and security crisis, polluted water and the Zika virus.

The president faces impeachment over allegations the administration used money from state-run banks to augment the budget during her re-election campaign, implicating several Brazilian construction companies responsible for many of the Olympic infrastructure projects. The country is in its worst recession since the 1930s and Olympic budgets have been slashed.

Brazil borders 10 other countries so there are more entry points to manage, but while security issues are high on the agenda, police and firefighters have been striking because they haven’t been paid. There is so little money, some of their cars have no petrol in them. “Welcome to Hell,” said a sign at Rio’s Galeão International airport during their strike, “whoever comes to Rio de Janeiro will not be safe.” A recent survey of residents in the northern and southern zones of Rio’s favelas found that more of them are now afraid of the city’s police force than they are of the drug traffickers and illegal militias that operate in and around the city.

The sailing and rowing competitions are being held in Guanabara Bay which is contaminated by high levels of pollution, bacteria and viruses. And the country is in the grip of the Zika virus, a mosquito-borne disease against which the World Health Organisation urges visitors to take precautions. Despite this, more than half a million spectators are watching around 10,000 athletes compete in more than 300 events in 28 sports played at 32 venues across four regions of the city of Rio de Janeiro. If 16 per cent use private jets, as was the case for the World Cup, that would have made over 80,000 potential charter customers. Was Brazil ready for them? The number of empty seats in the stadium suggest not.

“Brazilians are last-minute sprinters. It is part of our culture,” says Eduardo Marson, chairman of Brazil’s general aviation association ABAG. But as far as the Olympics are concerned, last-minute probably means missing out. In London the planning for general aviation at the 2012 Games was performed seven years ahead of time. ABAG director general Ricardo Nogueira has suggested: “The authorities were minimising any [aviation] risk to zero, by not having any aircraft flying.”

The main business aviation airports in Rio are Galeão International and Santos Dumont. Other smaller airfields only handle very small aircraft and helicopters. Galeão is an Airport of Entry (AOE), open 24/7 with full ground handling but no GA terminal. Lider Aviação has been selected as the official business aviation handler there, and has brought in staff from its other bases to handle the demand. Business jet parking space is split 70/30 between Lider and Universal Aviation.

Santos Dumont is a domestic-only airfield with no customs, immigration or quarantine (CIQ) facilities. Official estimates were for 900 to 1,000 business jet operations at these two airports on 5 August, the opening day. The five Olympic football host cities are served separately outside of Rio at Belo Horizonte, Brasilia, Manaus, Salvador and Sao Paulo. At any AOE in Brazil, CIQ is cleared in the commercial terminal, so GA passengers need to take a van to the passenger terminal then stand in line for clearance with airline travellers.

At the 2014 World Cup business aviation had to compete with commercial airlines for limited slots at Brazil’s major airports. There had been little expansion of the air transport infrastructure to accommodate the influx of air traffic, and instead existing facilities were used much more intensively. Alongside that, the widely applied no-fly zones meant an artificially low cap was placed on many flight operations.

Since the Games take place over the course of just over two weeks, for the most part in and around the city of Rio de Janeiro, Air Charter Service CEO Justin Bowman felt that only a very few would choose to travel by chartered jet. He compares it to his experience of the London Games in 2012: “We saw very little inbound activity.”

The view at Avinode

In the run up to the Games a number of athletes showed concern about making the trip, along with the fact that the games will be no place for pregnant women due to fears surrounding the Zika virus. Julio Sosa, sales director LATAM, Avinode, says: “Demand for tickets is as low as Brazil’s morale.” In March, fewer than half of the available tickets had been sold, and while sales picked up it is by no means a sell-out. On top of this, the country’s economy shrank by 3.8 per cent in 2015, and is under further strain thanks to the current political crisis and its struggle to pick itself back up after spending $11 billion on its World Cup.

This feels like a colossal weight. “But, here at Avinode, we think there is light on the horizon,” says Sosa. The company had examined its data from around Brazil’s World Cup and Russia’s 2014 Winter Olympics in Sochi in order to predict how Brazil’s 2016 Olympic Games might look and what it could mean for the country’s economy.

“The data from previous events highlighted the fact that all airports should look to hire a significant amount of staff to account for a large increase in travellers,” he says, “everyone from customer service staff to cleaners and ground support, which should slightly improve the levels of unemployment within the country.”

5,200 slots taken in 24 hours before 2014 World Cup

Latin America is the third largest region for private aviation, so it goes without saying that a global event such as Rio 2016 should have presented a spike in private air travel as spectators flocked to the stadiums in style. This was certainly the case with Brazil’s 2014 World Cup. Held in the capital, Avinode recorded that charter requests into Brazil rocketed with over an 800 per cent increase compared to June of the year before. “It’s a good indication that this pattern will repeat for the Olympics,” Sosa says.

In 2014, the pattern in requests for private flights into Brazil mostly reflected historical trends of a consistent level, that is until June 2014, the opening day of the World Cup. Requests exploded from several hundred in the whole month of May to several hundred on 10 June alone, two days before the start of the competition. In both June and July 2014, requests for travel into Brazil rose an incredible amount, by the tens of thousands. The majority of requests were to depart from Russia, the US and then the UK, but over the two months of the competition requests came from 68 separate countries in total. People were also travelling intra-country, with the majority of all requests coming from within Brazil itself, indicating that visitors were travelling privately between stadiums.

Heavy jets including the 10 passenger Falcon 2000, the 19 passenger Challenger 604 and the 13 passenger Global Express/6000 received the most requests, so Avinode predicted similar interest now.

“But that was football,” says Sosa, “one of the world’s most loved sports being held in the country which is home to, I think, the world’s best team. Is it fair to use the World Cup as a benchmark for the 2016 Olympics?” So Avinode also looks at the data for the 2014 Winter Olympics in Sochi, Russia.

Sochi 2014 Winter Olympics

Russia in February generally brings blisteringly cold temperatures, enough to put anyone off making the trip. But not in Sochi. The winter months here are typically much warmer than elsewhere in the country, by an average of 10°C, which would have had a positive impact on the number of spectators to the games. “As with the Brazilian World Cup, the Russian Olympics reported a massive hike of more than 500 per cent in additional requests to fly into Sochi airport compared to those in the February of the previous year.

“Again, heavy jets were the most requested aircraft with Embraer’s Legacy 600 leading the way and Bombardier’s Challenger 604 following. Interestingly, Cessna’s Citation XLS super light jet was also among the most requested, showing more of a diverse interest from smaller groups of travellers. And like Brazil’s World Cup, most of the requests to fly into Sochi came from within its own country, followed by Switzerland and the UK.”

The highest number of flight requests to arrive in Sochi were, unsurprisingly, on the day before the opening ceremony and on the day of the opening ceremony itself. But people were still requesting flights throughout the games and demand picked up towards the end of the competition for the final rounds and medal-giving ceremonies.

With such a consistent and large number of requests for these games, Avinode believes that, based on these two separate but wholly relevant events, the 2016 Rio Olympics should have offered some positivity during the country’s testing times. “With more visitors comes more tourism, more money and more promotion. Ultimately this can only help Brazil in edging its way up and out of its current state of gloom,” concludes Sosa.

Serving the Hungarian team

Global brokerage Air Partner had teamed up with Budapest-based travel company Tensi Sport & Holiday, the official travel agent for the Hungarian Olympic Committee and authorised ticket reseller for the Games, to offer direct flights from Budapest to Rio on four dedicated aircraft. Air Partner was also responsible for transporting the entire Hungarian Olympic team over to Brazil.

The arrangement came about as Air Partner’s sales agent in Hungary, Tensi Aviation, is the partner company of Tensi Sport & Holiday. Air Partner country manager Bernhard Egger comments: “There are many people in Hungary who would love to support their national team out in Rio but the route is not served by scheduled services and as such, the journey is quite a mission.”

Most charter will come from spectators, not athletes

For Tracey Deakin, COO at California-based Le Bas International, there has been very little interest in this event. “We had one VIP sports personality flying down, but because Rio is very well served by international airlines, and because the people primarily going down are sportsmen and women with their families, they tend to go scheduled.”

He explains that within sports like football, basketball and baseball, players are professional and attract a lot of sponsorship. So when they fly, accompanied by their large entourages, the sponsor will meet all those costs. Olympians don’t tend to attract the same level of sponsorship so the economy of commercial flight trumps the luxury of the private experience.

Le Bas has seen a little more interest in the Winter Olympics than the summer Games, and has flown the US team around in the past. “But apart from that, nothing.” says Deakin. For the World Cup he had aircraft based in Brazil to meet the needs of client corporations who had based their people in large hotels for the duration of the tournament, and who were then flown there and back to the venues for each match.

“There were no problems for business aviation at that time but we had prepared about a year and a half in advance for that one,” he says. “And we are already working on the next World Cup.”

If it’s not problems at the Brazil end, disruptions at the country of departure may impact negatively on charter business. Fabrice Mandon, commercial manager at France-based Kevelair, reports: “The market was low here actually, due to strikes and conditions in France itself.”

Brazil – a void to avoid?

Luis Barroz, CEO at Dallas, Texas-based brokerage Horizon Air Charter, had done some advertising for the Games but had not been overly proactive. He worked closely with international handlers, finding out how it would all work and what lead times and permits should be in place. “But we haven’t really got our hands too dirty with it,” he says.

While he saw considerable activity around the London Games, it was just not the case for Brazil. “The bad press and all the scares about the Games deterred everyone. There was not too much buzz about the whole thing,” he adds.

However, despite the general pessimism, online booking platform Victor has reported private jet flights to Rio nearly doubled for August, suggesting a clear appetite for Olympic travel. The company looked at booking requests for the second half of July versus the first half of August, when the Games began, and found an increase of 44 per cent to Rio and 32 per cent to Brazil generally.

But the last word must go to Oliver King, managing director at Avinode, who says: “Looking at our data we can see that flight requests for Rio shot up by over 1,000 per cent over the Games’ opening weekend compared to the same period last year. In August 2015 Rio was not even among the top 10 Latin American cities to visit, falling behind more popular destinations in the Turks and Caicos islands, Mexico and the Bahamas. Demand for Rio should have remained high for the duration of the Games, and as we head into autumn it will be interesting to see which cultural or political events will shape the trends in future flight requests and movements.”

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