Brazil Deregulates Air Fares to South America

Brazilian airline Gol As of this Monday, September 1st, the Brazilian government will no longer regulate air fares from Brazil to the rest of South America. This should represent a significant reduction in prices, according to a press release from Brazil's National Civil Aviation Agency, ANAC.

"The fare liberalization," will totally change the workings of the air industry and ends the rebate limits which existed in Brazil until last February.

"We're hopeful that the increased competition (through discounts and rebates) stimulates the fall in final prices and benefits consumers, particularly in low season," added ANAC.

Until last February flight fares from Brazil to the rest of South America were limited to a maximum discount of 30% which as of March was increased to 50% and starting September 1st will be totally up to the air carriers to decide according to their marketing policies.

Because of the existing regulations and the discount policy at the time, before March, airlines carrying passengers other from South American countries to Brazil, could offer fares 50% cheaper than in the opposite direction.

With this decision Brazil joins the growing number of South American countries that already have an open-fare policy for regional flights, according to ANAC.

The open fares system will help "correct distortions" and should lead to a sustained fall in prices for flights originating in Brazil.

ANAC also said that the number of flights from Brazil to the rest of South America is rapidly growing partly because of several agreements signed recently with neighboring countries.

Last year two million passengers flew from Brazil to other South American destinations which represented a 20.5% increase over 2006, relegating Europe to the second most important market.

Mercopress

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