After the storm, the sky of Brigadier in TAM Govt Aviation
The horizon opened up so quickly thanks to the combination of a change in behavior – many customers began to avoid commercial aviation to reduce the risks of contracting covid – and the commodities boom, which multiplied the demand for aircraft from agro customers. The strong demand for executive jets also benefits Embraer.
Farmers currently represent 40% of TAM Executive Aviation’s aircraft sales, says Maurício Amaro to Pipeline. Countryside customers mainly buy the King Air (from Beechcraft) and Caravan (from Cessna) models, which are capable of landing on different types of runways.
With record sales, TAM Executive Aviation increased net revenue by almost 48% last year, reaching R$ 165.6 million. The group does not open projections for 2022, but has already delivered 62 aircraft and closed the sale of 40 units for delivery next year. The order backlog for 2024 has also begun to be assembled.
The good moment also translates into margins, said Maurício. In the turbulent years that followed Lava Jato (the implications of the police operation on the executive aviation market came to earn the nickname Leva Jato), the company’s EBITDA margin reached negative 13%.
“I couldn’t see light at the end of the tunnel”, recalls the chairman, who is the son of commander Rolim Amaro. Now, the margin indicator is at 17% positive, a remarkable recovery.
In addition to the demand for aircraft, which should remain for the next two years, TAM Executive Aviation is strengthening its services area, with investments of R$ 10 million. To take advantage of the demand from the field, the company is going to open a maintenance center in Goiânia, an agribusiness hub. The unit joins the Jundiaí maintenance megacenter, in the interior of São Paulo, where the company has more than 7 thousand items in stock.
“Our biggest business is maintenance, but the sale of aircraft is the most profitable”, says Maurício. In the services area, TAM Executive Aviation also invested in the sale of parts in retail, an area where it had little activity but which helps to increase margins at a time when commissions paid by aircraft manufacturers continue to fall.
At the hangar in Congonhas, TAM Aviação Executivo also charters jets, but using seven customer aircraft, which reduces the fixed capital employed in this type of operation.
Source: Value Pipeline