Mission Statement
Aerospace Trade Mission to Brazil
Mission Description
The Deputy Assistant Secretary for Technology and Aerospace Industries will lead an aerospace trade mission to Brazil, May 14-20, 2000. The mission will include representatives from a variety of U.S. aerospace firms interested in gaining a foothold in the fast-growing Brazilian aerospace market.
Commercial Setting
General Aviation
Brazil considers aviation and aerospace industrial development to be a vital sector for national development and defense. Due to the vast size of the country, air transportation is a critical link in Brazil's infrastructure. The country is vitally dependent upon its civil aviation system to link the sparsely inhabited areas with major economic centers. Brazil also sees it as important for economic growth and military defense. Combining this dependence on air transport with the national policy to establish a modern market economy, U.S. commercial aircraft and parts' manufacturers have excellent market prospects in Brazil.
While there are about 500 companies in the Brazilian aviation industry employing approximately 50,000 people, foreign companies supply 95 percent of the market. Embraer, Brazil's largest aircraft manufacturer, is a major buyer of equipment and parts for its own production line, as well as a major international supplier in the aviation field. The U.S. is Embraer's largest customer. There are also six manufacturers of ultra-light aircraft and 12 FAA-certified repair stations in Brazil. The 1998 aircraft and aircraft parts market was estimated to be (USD) $1 billion. Total imports into Brazil of aircraft and aircraft parts in 1997 were (USD) $868 million and in 1996 (USD) $738 million. In 1997, the U.S. controlled 78 percent of Brazil's import market, followed by Canada with 17 percent and France with 5 percent. The Brazilian aircraft and parts market is expected to grow around 35 percent over the next three years. In addition, Brazil does not have a well-developed aircraft parts industry to supply the local market.
After the reduction of government intervention in the sector, the largest air transport companies-VARIG, VASP, TAM and Transbrasil-increased their sales profit by 63 percent in 1998. These results are expected to continue over the next three years. Also, the regional air sector represents 19 percent of Brazil's domestic flights and generates almost (USD) $3.2 billion per year. In 1998, the demand for aircraft-related equipment and parts increased 72 percent from the previous year.
Airports
On December 6, 1999, the Government of Brazil announced plans to privatize all of its 67 state run airports. The Government will begin implementing this multi-year project in early 2000. Private enterprises will not be able to purchase the airports outright. However, they will be granted multi-year concessions.
Currently, INFRAERO (Brazilian Airport Infrastructure Company) is responsible for the administration of all the Brazilian airports. INFRAERO was created to manage, operate and explore commercially and industrially all airports under its jurisdiction and subsequently under the Ministry of Defense. As Brazil's sole airport management and operation agency, INFRAERO controls more than 90% of all Brazilian airport traffic. INFRAERO is regulated by DAC (The Brazilian Civil Aviation Department) which will be eliminated and replaced by ANAC (The Brazilian National Agency for Civil Aviation) under the privatization guidelines in the next few years. Most important, ANAC will not be subordinate to the Ministry of Defense, but will be an independent agency reporting to the President of Brazil and will provide the directions for the airport public infrastructure concessions. The concessions will be given to private enterprises that offer the highest bid. The enterprises will have to pay annual fees to maintain their concessions.
Through the Government's airport privatization plans, consumers will begin to see a liberalization of the aerospace market that is now controlled by DAC. The liberalization and privatization of this sector will allow a reduction of domestic air ticket prices, which are very expensive compared to international air tickets and afford private enterprise an opportunity to enter Brazil's lucrative airport market.
Space
Through many different government and commercial programs, Brazil is establishing itself as one of the world's space fairing nations. Brazil is among the first Latin American countries to use satellites for domestic telecommunications and the demand for space-based products is growing. Brazil is hoping to create the first international commercial "spaceport" at its Alcantara launch site, as it is a competitive location for improving rockets' performance. Several U.S. and foreign firms are interested in using Brazil as a launch site, and current U.S. policy changes will soon allow U.S. rockets to be transported to Brazil for launch from the Alcantara site.
Mission Goals
The mission's goals are to gain first-hand market information and to provide access to key government officials and potential business partners for U.S. aerospace firms desiring to expand their presence in the Brazilian markets. New opportunities for U.S. firms are being opened by the liberalization of U.S. aerospace policy and the Brazilian Government's desire to open-up its aerospace markets.
Mission Scenario
Deputy Assistant Secretary for Technology and Aerospace Industries, Ellis R. Mottur, and his delegation will meet with senior officials from the Government of Brazil to obtain detailed information on trade policy measures Brazil is developing to open its market to U.S. participation. Similarly, the delegation will meet with senior officials from Brazilian airlines, aircraft manufacturers, space officials, and airport authorities to obtain in-depth information on opportunities for U.S. aerospace firms. Finally, participating U.S. firms will be introduced to qualified Brazilian business partners through mission events, site visits, and a series of one-on-one meetings. It is expected that there will be 15 participating companies in the mission.
Timetable
The mission is scheduled to commence in Rio de Janeiro on May 14-16, then move to Brasilia on May 17, and Sao Paulo on May 18-19, 2000. The U.S. delegation will depart Sao Paulo on Saturday, May 20, 2000. The precise schedule will depend in part on the availability of Brazilian Government and company officials and the specific goals and interests of mission participants. Recruitment for the mission will begin immediately, and should be concluded no later than April 25, 2000. Applications received after that date will be considered only if space and scheduling constraints permit.
Criteria for Participant Selection
Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Internet, press releases to the general and trade media, direct mail and broadcast fax, notices by industry trade associations and other multiplier groups, and at industry meetings, symposia, conferences, trade shows, etc.
A company's products or services must be either produced in the United States or, if not, marketed under the name of a U.S. firm and have at least 51 percent U.S. content of the finished product/service.
Any partisan political activities (including political contributions) of an applicant are entirely irrelevant to the selection process.
Contact
Ms. Kim Wells Telephone: 202-482-2232
Office of Aerospace Fax: 202-482-3383
International Trade Administration E-mail: Kim_Wells@ita.doc.gov
Room 2128 HCHB
U.S. Department of Commerce
Washington, D.C. 20230
Dr. Sean McAlister Telephone: 202-482-6239
Office of Aerospace Fax: 202-482-3113
International Trade Administration E-mail: Sean_McAlister@ita.doc.gov
Room 2128 HCHB
U.S. Department of Commerce
Washington, D.C. 20230