Buoyant Brazil adds cargo capacity.(region focus: Latin America)

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Air cargo executives at UPS had expected 2008 to end with a bang in Latin America.

That's why UPS last year urged shippers to make advance reservations of premium-priced space aboard fourth-quarter flights to Mexico, Central America and South America. The final months of 2008 were disappointing, though. UPS and other air cargo carriers watched their volumes plunge from the levels of late 2007, and weak business conditions have persisted throughout much of Latin America.

The region's resilient exception has been Brazil.

This year, Brazil is the only Latin American nation where UPS again is charging premium rates for advance fourth-quarter space reservations. "Other than in Brazil, the market [in Latin America] isn't nearly strong enough to require those kinds of discussions," said Tom O'Malley, UPS vice president, air cargo, Latin America, and director of international flight operations at Miami International Airport.

Brazil's air cargo market strengthened in the summer after slumping for most of the year, air cargo executives say. "We saw a downturn in the Brazil market for a period of about six months, and now we're starting to see an up-tick [from] Miami to Brazil," O'Malley said in a June interview. "We are operating with full aircraft again to VCP," the Viracopos airport near Sao Paulo, Brazil. "Based on the performance of the last six weeks, we're expecting the Brazil market to continue to be firm" for the rest of the year.

Another important player in Brazil's air cargo market is Federal Express. The Tennessee-based integrator …