ABSTRACT
This chapter provides an overview of the external macroeconomic changes in South America that have contributed to the development of low cost carriers (LCCs) in the region, followed by a more detailed analysis of Brazil, the region's predominant LCC market. An analysis of the air transport market in South America during the period 2001-2010, LCCs' seat capacity increased from 4 per cent in 2001 to 26 per cent in 2010. Considering the significant growth of the LCC sector in South America it is worth analysing the LCC phenomenon in the region and, in particular, the case of Brazil. In comparison to other countries in South America, Brazil has some unique characteristics that fostered the flourishing of LCCs. In terms of its landmass, population size and gross domestic product (GDP), Brazil accounts for approximately half of each of these three factors in South America, favouring an overall need for the development of air transport.
