Spotlight: The brutal pandemic impact on Brazil’s urban transport sector
Companies operating in the urban transport sector in Brazil posted massive losses last year due to the COVID-19 pandemic.
The first months of 2021 are likely to see them continue to struggle financially as the country’s vaccination campaign is moving at a slow pace and local governments are again imposing social distancing measures to combat a spike in infections.
Bus companies posted a combined net loss of 9.5bn reais (US$1.75bn) in 2020, according to national transport confederation CNT.
"The passenger transport sector has hit bottom and I believe it will continue at this level in the short term, but as vaccination progresses and schools start reopening, we can have a resumption, which will be later in the year," Eudo Laranjeiras, head of road passenger transport at CNT, told BNamericas.
According to Larajeiras, the reopening of schools is important for the urban transport sector as 25% of passengers transported daily in the country are linked to school activities.
The net loss posted last year was worse than projected by CNT, which at the start of the pandemic was estimating a loss of 700mn reais.
As a result of the massive loss and plummeting demad, the sector registered 61,436 layoffs in 2020.
Passenger demand ended last year at 61% of pre-pandemic levels, leading companies to reduce the fleet in circulation to 80%.
"Bus companies are adjusting their fleets to lower passenger demand, even after the pandemic, In Brazil I believe that we will have a bus fleet 20% smaller than before the pandemic,” said Larajeiras. “People are using more bicycles, transport apps, like Uber, to avoid mass transportation during the pandemic and a portion of these passengers will never return to the mass transportation system.”
A total of 15 companies and three consortiums that operated in the bus sector suspended or terminated their operations last year, according to CNT.
Trains and subways
The severe impact of the pandemic also hit train and subway operators hard last year.
The urban railway sector saw a passenger decline of 37% and its companies registered a combined 2020 loss of 8bn reais, according to passenger railway transport association ANPTrilhos.
At the end of last year, President Jair Bolsonaro vetoed a congressional bailout package of 4bn reais for bus, train and subway operators, arguing it would negatively impact the country’s already dire public finances.
The veto generated strong criticism from sector representatives and CNT and ANPTrilhos officials are trying to reverse the veto. "It will be very difficult to revert this veto, we are trying to convince the president but the country's fiscal situation is complicated," said Laranjeiras.
Sector outlook
The 2021 outlook for the sector is highly uncertain as local governments in major cities and states have once again imposed stricter social distancing measures amid rising coronavirus infections and fatalities.
In São Paulo, Brazil’s wealthiest and most populous state, the number of people infected in January reached 268,997 as of Wednesday, marking a monthly record since the beginning of the pandemic.
This situation led São Paulo to delay the start of school openings, which were initially expected for February. The authorities also imposed stricter opening hour restrictions for shopping centers, bars and restaurants.
Earlier this month, Brazil’s health authority (Anvisa) authorized the start of COVID-19 vaccinations but the limited number of vaccines available makes it likely it will be a slow vaccination campaign.
So far around 1.13mn Brazilians have been vaccinated, representing only 0.5% of the population, according to the Ourworldindata website, which is compiling worldwide vaccination campaign data.
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