David Bishko stood like a marked man at the front of the Fulton County Government Center‘s legislative chamber.
Throughout a Sept. 20 Brazil business forum, Delta Air Lines Inc.‘s managing director for Latin America and Caribbean was the target of many good-natured jabs about the need for more air service to various parts of the country.
When he got his chance to speak, Mr. Bishko assured the audience that Delta wants more than anyone to expand in the region’s largest market.
“We prioritize, and without question our top priority in Latin America and the Caribbean is Brazil. Not only is it our top priority in this region, but it’s really one of our top priorities worldwide,” Mr. Bishko said at the Brazilian-American Chamber of Commerce Southeast event. He thanked chamber members and guests for forging business ties that encourage travel between the countries.
Brazil has the world’s fifth largest population, its seventh largest economy and the rights to host the two largest sporting events, the 2014 World Cup and the 2016 Summer Olympic Games. But for Delta, the country is only the ninth biggest market served from the U.S.
“To me that means a lot of opportunity,” Mr. Bishko said.
He presented Brazil as the capstone of Delta’s strategy in Latin America and the Caribbean, where it serves 55 cities in 32 countries. The region is the final frontier in Delta’s quest to become a true global carrier, the core of its strategy after emerging from bankruptcy six years ago, he said.
Delta already offers flights to Rio de Janeiro and Sao Paulo from Atlanta and also reaches Sao Paulo from New York and Detroit, but major structural and regulatory hurdles are hindering even further expansion in Brazil.
For one, both governments require business travelers and tourists to obtain visas, a process that can be onerous and expensive, Mr. Bishko said.
Adalnio Senna Ganem, Brazil’s consul general in Atlanta, has told GlobalAtlanta that it’s not so much the cost of the visa but the hassle of obtaining it that bothers Brazilian travelers.
Mr. Bishko also called for less regulation in the airline sector. He said an Open Skies accord would keep both governments from restricting destinations and capacity, boosting competition and bringing down high fares that have drawn the ire of travelers.
The U.S. has signed more than 100 such agreements around the world. An air transport pact signed last March in Brazil seemed to have laid the groundwork for Open Skies there.
Mr. Bishko also noted that the airport in Sao Paulo, the country’s commercial center, faces severe constraints both in gate space and landing slots, which makes it hard for Delta to schedule timely connections there.
“If we could fly more to Sao Paulo, we would,” he said.
Delta is reaching from Brazil’s hub cities into smaller destinations through a code-share agreement with GOL Linhas Aereas Inteligentes S.A.
The pact, implemented in February, allows Delta to sell tickets on 56 GOL connecting flights to 15 destinations across the country. The state of Bahia‘s tourism minister, Billy Arquimimo, who attended the event, asked in his remarks for more flights to his part of the country from the U.S.
Delta wasn’t alone among conference speakers looking at Brazil through a lens of optimism tinged with realism.
Taube Ponce, a senior trade specialist at the Georgia Department of Economic Development, cautioned that while the opportunities are immense for exporters, tariff barriers designed to protect Brazil’s domestic industries make it hard for products from smaller firms to compete.
“Everybody wants to be there and be doing business there, but it’s not for everybody,” Ms. Ponce said.
Still, while large companies comprised much of Georgia’s $850 million in exports to the country in 2010, smaller firms can succeed with unique products in spite of a protectionist tariff structure that stacks duties at the national, provincial and municipal levels, she said. Chemical manufacturers from Georgia have done particularly well.
Princeton Healthcare Inc. makes its living in Brazil by exporting knowledge instead of products, said Don Williams, the company’s CEO. Princeton started in Brazil in the early 2000s providing advisory services for hospitals but soon branched out into investment banking and infrastructure development.
Mr. Williams urged companies to get their foot in the door and then see where Brazil’s “tremendous opportunities” lead.
Small companies should make use of free services from the state of Georgia’s trade office in Sao Paulo or the U.S. Commercial Service‘s export resources, he said.
The state is planning three trade missions to the country in the coming months. The World Trade Center Atlanta is leading a delegation to Rio de Janeiro in October.
Since he first visited Brazil on a trade mission, the country has continued to excite Mr. Williams. It’s much closer than India and has better infrastructure than Africa, two other places Princeton Healthcare has worked. Brazilians are open to American technology and ideas, and of course, they have the benefit of the upcoming World Cup and Olympics, he said.
The Brazilian government is focused on developing small and medium-sized companies. Sebrae, the agency handling this outreach, has identified 650 opportunities for such companies within the $14 billion outlay for the Olympics, said Jose Castanhar, a professor at Fundacao Getulio Vargas.
In addition, the World Cup is projected to result in $17.5 billion in direct investment and $83.8 billion in economic impact, Mr. Castanhar said at the business forum.
The event, hosted by the Brazilian-American chamber, was part of the third Brazil Fest, an annual event organized by the Consulate General of Brazil in Atlanta to promote the country’s culture and business.
Visit www.bacc-ga.com for more information about the chamber.
Click here to learn more about the state’s upcoming trade missions.
