E-NEWS UPDATE VOLUME 19 NUMBER 0824

UNEMPLOYMENT IN BRAZIL DROPS 8 PERCENT IN JULY

The unemployment rate dropped 8% in July over the June number which was also 8.1% over the same period last year. The Brazilian Institute of Geography and Statistics (IBGE) stated the drop in unemployment is a direct result of the economic recovery in the country. Cimar Azeredo, General Manager of the IBGE stated in his report that the job market is growing significantly in the country. Unemployment had grown in the first quarter of 2009 but turned around in April. The statistics which IBGE reported from its six metropolitan region study has employment of 21.3 million, growing 0.9% in July over June. Brazil's Labor Minister, Carlos Lupi, told Reuters that "I believe that unemployment with continue to drop this year". He forecasts that the unemployment rate will be between 7.6% and 7.7% by the end of this year. Viva Brasil with an "S"

BRAZIL, CHILE, PERU AND COLOMBIA RECOVERING

According to the July 19 article in MercoPress, South Atlantic News Agency, Brazil's Getulio Vargas Foundation and the University of Munich has released a report which has the four above mentioned countries in the process of economic recovery, while Argentina, Bolivia, Ecuador, Paraguay and Venezuela are in a recessive phase. The report adds that overall Latin America is in the midst of economic recovery with good prospects for the coming six months. The Economic Climate Index (ICE) shows the region with a surging tendency in July, close to the four points after having plummeted to its lowest historic record last January with 2.9 points. The Current Situation Index (ISA) also advanced but remains at an unfavorable level with 2.6 points. The report adds:  "However, even when the current situation is bad, prospects for the coming six months can be considered good".  The ICE ranking based on the last four quarters, has Peru leading with 5.3 points; followed by Brazil with 4.7, Chile with 4.3 points. Stay tuned for more good news.

THE E-FUEL MANAGER BY LARRY S. WEAVER

Last week the ATA said that the number of passengers being flown by US Airlines continues to fall despite large fare reductions. Passenger revenue dropped 21 percent year-over-year in July. Passenger traffic was not alone reflecting a weak global economy as cargo traffic has also dropped - some 15 percent (including an 18 percent drop internationally). It is easy to see why fuel demand is down some 13 percent from last year. World statistics from IATA show a similar trend in the world's airlines.

Although prices were down the beginning of last week, the huge draw in crude inventories in the US drove crude - and product - prices up the end of the week. The net was close to a "no change' in the price levels, meaning our prices will change very little this week with the changes to be implemented tomorrow morning. However, unless there is a big drop this week in prices - which we do not anticipate - monthly-based prices appear that they will be up over $0.1000 per gallon next week at the start of September.

Other news, briefly

Porsche sees Brazil and Chile demand growing

Mathias Bruck, President and Managing Director of Porsche Latin America, recently stated in an interview with Latin Business Chronicle that "We have good signs that things are picking up and at least have bottomed out." Despite the impact of the global crisis on sales of the luxury car in Latin America, he sees several encouraging signs with key markets like Brazil and Chile both seeing increased demand again. Stay tuned.

AeroSur is renewing its fleet in Bolivia

Humberto Roca, CEO of the Bolivian airline, announced that the delivery of its first B737-300 will be used on its route to Sao Paulo and within the country. He was also critical of the Bolivian government's actions to support the national carrier, BoA, at the expense of the 17 year old AeroSur. One to watch.

TACA to begin nonstop flights to Mexico City from Lima

The airline announced that it will launch three-time weekly nonstop service between Lima and Mexico City on November 1. It is also adding three-time weekly nonstop service between Lima and Cancun, Mexico. Currently the airline operates six-time weekly service between Lima and Mexico City with a stop in San Jose, Costa Rica as well as six weekly flights to Cancun via San Jose. Another one to watch.

Panama's Tocumen Airport reports 4.8% growth in arrivals

The airport received 2.3 million visitors in the first six months of the year for a 4.8% growth. It is forecasting a total of 5 million arrivals in 2009. The largest growth rate in the first six months was transit passengers which grew 27% in the period y/y. Way to go!

Two Czech Republic airlines to serve the Dominican Republic in October

According to an announcement by the Dominican Republic tourism department, two new nonstop flights will begin service on October 24 between the Czech Republic and Punta Cana on October 24 and December 26. The service will be operated by the private Travel Service and Czech Airlines.  Tourism is the driver.

Pluna launches nonstop Asuncion-Santiago service on September 15

The Uruguayan "born again" airline will begin three-time weekly CRJ900NG nonstop service between Asuncion, Paraguay and Santiago, Chile on September 15. The new service is the result of the Open Skies agreement between Chile, Paraguay and Uruguay. Way to go, Matias and good luck!

Chile to invest $4 billion in three years in infrastructure

The government has announced that it will invest $4 billion in infrastructure between 2009 and 2011. The Minister of Public Works, Sergio Bitar, said the government will be issuing RFPs for $1 billion investments in 2009, $1 billion in 2010 and $2 billion in 2011. The projects include highways, a tunnel in the Andes which will permit the transportation of cargo between Chile and Argentina, as well as a number of other projects which include ecological tourism roads for the development of tourism. Wow!