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By Tina Seymour

All the airlines are vulnerable to fuel prices, but given the way the currency exchange rates are working out, the Brazilian carriers may be laboring under the biggest exposure here.

I mentioned that the airline trade had more room left to go down. This appears to be the catalyst.

If Brazilian monetary policy officials get their way and guide the real lower, it will rob airlines like GOL (NYSE:GOL) and TAM (NYSE:TAM) of effective global purchasing power as they need to use depreciated reais to buy dollar-denominated jet fuel.

As Credit Suisse notes, Brazil does not allow airlines to pass on fuel surcharges to their domestic customers, so these companies will simply have to absorb the added cost and watch their margins suffer.

By comparison, Chile’s Lan (NYSE:LFL) and Panamanian carrier Copa (NYSE:CPA) are relatively protected from oil shocks, since they both have the ability to add fuel surcharges to their ticket costs and significant hedging programs in place.

On a pure market cap basis, the world’s biggest airlines are all based in Asia and Latin America.

On a relative Brazil-versus-Brazil basis, we would prefer GOL over TAM, given its cheaper valuation and lighter cost structure once you subtract out fuel costs — which should be a wash here since they apply across the board.

This is different from the last time we saw oil prices spike last fall. At the time, the airlines did fine because they were still riding a wave of growth euphoria. This time, commodity inflation could actually choke off some leisure travel and tourism, which means that not only the carriers but the airports are exposed here.