TAM announces guidance for 2011
We announce our guidance for 2011 We believe in the market growth and in our ability to bring more Brazilians to fly with us São Paulo, January 25th, 2011 – (BM&FBOVESPA: TAMM4, NYSE: TAM) – We announce our estimates for 2011. Monitoring will be conducted quarterly and, in case of significant changes in market, macroeconomic or internal conditions, the forecasted indicators will be reviewed.
Historically, growth in demand from Brazilian domestic aviation market has a strong correlation and elasticity with the country's growth of about three times the GDP growth. In 2010 we observed a modification in the passenger's profile, with the migration of travelers from buses to the airlines, especially on travels above 800 kilometers. In line with this trend, still in 2010 we started our retail project, because we believe that much of the growth next years will come from middle class Brazilians that will fly for the first time. In 2011 the demand shall remain strong, driven by both passengers flying by business purposes, as for the leisure travelers. As a result of the combination of GDP growth and increase of new passengers, we estimate that the domestic market demand will grow between 15% and 18%.
Aligned with the demand growth, we will increase our supply by growing our fleet by seven aircraft, being two A330s, two A321s and three A319s. We will also continue to optimize our costs through a healthy utilization of our aircraft in the domestic market, growing our supply from 10% to 14%. In the international market will grow 10% with the launch of two new frequencies or destinations.
Through our retail project, we aim to succeed in increasing the volume of passengers at off-peak hours, which will contribute to increase the load factors. In the domestic market we believe in a range from 67.5% to 70%, while in the international market we expect an average of 83%. This combination of events drives us to believe that the recovery of the yields shall coexist with considerable demand growth.
With the dilution of fixed costs and our cost reduction efforts, we will be able to reduce our CASK excluding fuel costs by 5%.