Aviation - Industry - South America Market, Share and Trends 2023-2028

Summary of Aviation

The aviation industry plays a vital role across South America, supporting millions of jobs and accounting for significant trade, tourism and business travel flows within the region. In 2023, South America accounted for approximately 5% of the estimated $826 billion global aviation market.

Brazil represents the largest aviation market in South America, valued at an estimated $15.83 billion in 2023. This accounts for over 40% of the region’s total aviation market size. Brazil has a well-established domestic network along with expanding international services by home-based carriers like LATAM Airlines and Azul Brazilian Airlines.

Other South American aviation markets include Argentina– valued at around $4 billion annually. Argentina has seen steady growth in air travel in recent years. Colombia also has a growing aviation sector worth an estimated $3 billion in 2023, driven by airlines like Avianca.

Chile and Peru have aviation markets valued at approximately $2 billion and $1.5 billion respectively. These countries have invested heavily in new airports and infrastructure to support tourism and trade. Overall, the aviation industry plays a vital role in South American economies and remains a crucial promoter of domestic, regional and intercontinental connectivity.

Recent Trends and Insights

South American aviation sector has seen the growth of low-cost carriers across domestic markets. Airlines like Chile’s Sky Airline and Colombia’s Viva Air have expanded regional flight networks– leading to a rise in passenger numbers. However, high inflation affecting countries such as Argentina and Brazil has impacted the industry in 2022.

Carriers throughout South America are focused on modernizing fleets with new, more fuel-efficient aircraft models. Airlines have been replacing aging planes with new ones like the Airbus A320neo, Boeing 737 MAX and Embraer E-Jets, aiming to improve efficiency and reduce operating costs. These new aircrafts also offer passengers enhanced comfort on longer regional and international routes.

Initiatives to strengthen regional connectivity through open skies agreements have shown a rise. The South American Open Skies Agreement has allowed greater freedom for airlines to operate new routes between cities across international borders within South America. This has expanded flight options and boosted tourism within the region. Overall the long-term outlook for aviation in South America remains positive as economies continue developing.

Air traffic recovery in the region since the lifting of pandemic restrictions has varied by country depending on domestic health protocols and economic conditions. Chile and Colombia have seen strong recoveries in 2022 with traffic nearing pre-Covid levels on many routes. However, recovery in Brazil and Argentina has faced obstacles from inflation and currency volatility impacting passenger spending power. Carriers are hopeful for continued improvements as these macroeconomic challenges ease.

Product Insights

Major aircraft manufacturers like Airbus, Boeing and Embraer actively market their families of narrowbody and regional aircraft to South American airlines seeking to modernize or expand their fleets. This has supported growth in the commercial air sector of the regional aviation market.

Maintenance, repair and overhaul (MRO) facilities in countries such as Brazil, Colombia and Argentina have also been investing heavily to develop capabilities for modern aircraft types. As local fleets incorporate new models, these MROs aim to provide efficient support services.

General aviation is another growing segment in South America, as the corporate and business aviation sector expands along with high net-worth individual demand. This has driven increased activity– for private jets, helicopters and related services. Overall, manufacturers are well-positioned to continue supporting the modernization and needs of South American airlines and fleets going forward. Hybrid-electric and electric aircraft trials aim to establish commercial and cargo routes where feasible given power and weight limitations.

Key Companies

Some major players within this vast domain of industry are

• LATAM Airlines
• Azul
• Gol
• LATAM Technical Training
• Aeroman
• TAM Aviação Executiva

Regional Analysis

Brazil accounts for the largest share of the South American aviation market, valued at an estimated $15.83 billion in 2023. As the largest economy in South America, Brazil sees significant domestic and international air traffic each year. Major Brazilian airlines like LATAM Airlines and Gol Linhas Aéreas Intelligences dominate the domestic market, connecting key cities like São Paulo, Rio de Janeiro, and Brasília. International routes from Brazil to destinations in North America, Europe and other South American countries are also popular.

Argentina has the second largest aviation market in the region, valued at around $5.72 billion. Argentina’s flagship carrier Aerolíneas Argentinas connects major domestic points between Buenos Aires, Cordoba, Mendoza and others. International routes from Buenos Aires to destinations in Europe, the United States and neighbouring South American countries also see strong demand.

Colombia is another key aviation market in South America worth an estimated $4.72 billion. Colombia’s aviation sector has grown steadily in recent years, supported by a growing economy and tourism industry. Leading carriers like Avianca and LATAM Colombia operate domestic and international services within South America as well as North America and Europe.

Countries like Chile, Peru and others are also seeing steady growth in passenger and air cargo volumes as their economies develop further trade and tourism links within South America and globally. Regional carriers in these countries connect major domestic routes while also operating international services. Regional organizations such as the Pacific Alliance have worked to strengthen air transport links between member nations including Chile, Colombia, Mexico and Peru via open skies agreements. Such initiatives have supported increased trade and tourism activity within the member countries through expanded connectivity options.

Market Segmentation

By Type:

• Commercial aviation
• General aviation
• Military aviation
• Civil aviation

By End user:

• Airports
• Aircraft manufacturers
• Aviation service providers
• Aviation authorities

By Sub-Sector:

• Domestic aviation
• International aviation
• Regional aviation
• Low-cost aviation
• Business aviation

By Countries:

• Brazil
• Argentina
• Columbia

Our Methodology

We have offered a well-founded review of the South America’s regional aviation market along with ongoing trends and upcoming projections to highlight proximate investment opportunities in this report. Moreover, an extensive analysis of any future prospects, challenges, competitors, or navigating aspects is also provided. A methodical detailed regional examination is presented.

Primary Research  

Our multi-pronged research approach includes interviews with industry leaders and a global survey of advanced manufacturing professionals to gain qualitative insights. We utilize our proprietary databases encompassing key performance indicators worldwide in order to collate relevant data points. A multivariate forecasting framework considering historical performance, current dynamics and qualitative factors are utilized to develop market sizing and growth projections through 2029.

We supplement our primary research with a careful examination of secondary materials such as– case studies, news stories and references from other sources. Organizations can benefit from the strategic advice and conclusions offered because they will be better equipped to respond to the dynamic nature of this industry and seize emerging possibilities.

We employ a comprehensive and iterative research methodology focused on minimizing deviation to provide the most accurate market estimates. Our research utilizes a combination of bottom-up and top-down approaches across segments and utilizes databases, primary research insights and industry experts for analysis.

Raw data is obtained from multiple sources and thoroughly filtered to ensure only authenticated and validated sources are considered. We collect data from raw material suppliers, industry associations, technology providers, and buyers to gain a holistic perspective.

Quantitative Analysis

Our market estimates are derived through statistical models, beginning with collection of historical data and analysis of macro- and micro-economic factors influencing the market. Gathered information on market dynamics, technology and pricing trends are utilised to build the models.

Econometric and technological models are applied to project short- and long-term market potential respectively. A bottom-up approach is preferred to minimize errors. Key parameters considered include market drivers and restraints, material pricing trends, regulatory scenarios, and capacity additions.

Weights are assigned to these parameters based on impact analysis and market forecasting is performed via statistical tools and techniques. We believe this methodology results in an accurate and realistic market picture.