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Brazil eyes opening skies over World Cup to foreign airlines

By Andrew Downie

SAO PAULO (Reuters) - Brazil will decide in December whether to open its skies to foreign airlines during the World Cup, the head of the Brazilian tourism agency Embratur said on Tuesday.

Embratur's Flavio Dino acknowledged Brazil's domestic carriers may not have the capacity to meet demand during the monthlong competition and said companies that currently operate international flights to and from Brazil could be invited to take up the slack.

"We have the view that it is important to ensure more flights," Dino said. "We are replanning our air network. We may open the market to companies that just deal internationally."

With eight months to go before the tournament, soaring ticket prices have stirred popular outrage, highlighting a legacy of barriers to foreign airlines. Of the more than 100 nations that signed an open skies agreement with the United States, Brazil is one of a handful that have not put it into practice.

The decision about opening domestic routes would come after a World Cup draw in Bahia on December 6, Dino said. Only then will authorities know which teams are playing in which cities in order to predict the movement of fans.

Although the government has opened several major airports to private investment in an attempt to relieve bottlenecks before the World Cup, progress has been slow. Brazil's expanding middle class also means the number of air travelers has grown by about 10 percent per year since the middle of the last decade, according to Brazil's civil aviation authority Anac.

Brazil's two main airlines, Gol Linhas Aereas and Latam Airlines Group's TAM, have also been laying off pilots and slashing routes to restore profitability, raising concerns they will be unprepared for the onslaught next year.

An estimated 600,000 foreigners and 3 million Brazilians will be traveling around the country during the World Cup next June and July.

NINE HOURS BETWEEN VENUES

Brazil is the world's fifth largest country - bigger than all of Western Europe - and not all major provincial cities have direct flights to the main hubs of Rio de Janeiro and Sao Paulo. Flights between the Amazonian city of Manaus to the southern city of Porto Alegre, for example, often take nine hours or more with several layovers.

Both cities are among the 12 venues that will host matches during the tournament, the first World Cup in Brazil since 1950.

Dino said the government also wants to take action against airlines and hotels raising prices to abusive levels.

Local newspapers reported this month that some airlines were charging more than $1,000 for the 50-minute flight between Sao Paulo and Rio de Janeiro during the World Cup - more than some flights to New York.

An Embratur report said hotel prices in Rio de Janeiro, where the World Cup final will take place on July 13, would be more than twice that of Johannesburg, host of the last final.

The federal government set up a commission last week to monitor price gouging, but it is unclear just how much power it has to prevent private firms from charging what they want.

"It is not up to the government to set prices but we have legal mechanisms like the Brazilian competition law and consumer protection law that can be used to hinder prices abuses," Dino said in a conference call with reporters.

(Additional reporting by Brad Haynes; Editing by Leslie Gevirtz)

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