Brazil Lets Airlines Offer Discounts on International Flights

American Airlines The Brazilian government is starting to loosen its grip on international airline tickets including those to the United States and Europe. From now on airlines will be able to charge up to 20% less than the minimum established by the  National Agency of Civil Aviation (ANAC), as announced Wednesday, April 22.

In July, discounts allowed will reach 50% and in October, 80%. It's expected that in one year ANAC will let the market decide what price to charge, without any restriction.

The decision goes into force as soon as it is published in the Diário Oficial (Federal Daily Gazette), which should occur this Thursday (April 23). According to the ANAC, the price controls were against the 2005 law that created the agency.

Today, the minimum price for flights to the United States originating in Brazil is US$ 708. To travel to Germany, France, Italy or the United Kingdom a Brazilian until now could not pay less than US$ 869. Flying to Japan cost at least US$ 2,046.

Some foreign airlines have immediately decided to reduce their prices, according to the ANAC. Brazilian airline TAM, however, had opposed the measure together with the National Union of Airline Companies (SNEA) trying unsuccessfully to prevent the new rules.

They argued that this deregulation would jeopardize Brazilian airlines. If it weren't for TAM and the SNEA, the reduced prices would have started in January.

The hands-off approach began last year with air tickets from Brazil to other South American countries. Since September these flights have no minimum price anymore.

While the discounts are optional, ANAC says that it's hopeful that companies will lower the prices of their tickets. According to ANAC's director, Marcelo Guaranys, the real reduction of price will depend on the competition between the companies:

"Where there's more market competition the reduction will be higher. So, we imagine that markets like the United States and some European destinations will have a reduction in the short term."



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