Flying South

摘要

Brazil, Latin America's largest economy, is becoming a strong player in the international maintenance, repair and overhaul (MRO) market. The increase in maintenance outsourcing and the relatively low labour costs in Brazil have allowed MRO providers such as VEM, GE Celma and TAM Technical to flourish, despite the problems of the country's airlines. Varig Engenharia e Manutencao (VEM), the wholly owned MRO subsidiary of the troubled Brazilian flag carrier Varig, has profited from its cost advantage. For many contracts, VEM estimates it is at least 20% cheaper than US-based MROs and 30% to 40% less expensive than rival European workshops. Although consolidation among MRO providers appears to be the only way many of them will survive into the near future, Evandro Braga de Oliveira, VEM's chief executive, says that while VEM may sell a minority stake to raise additional capital for its parent company, there is no intention to cede control to outside investors.