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U.S., Brazil Agree to Eliminate Flight Restrictions

Dec. 7 (Bloomberg) -- The U.S. and Brazil agreed to end restrictions on flights between the two countries in 2015.

The countries plan to gradually lift a limit of 154 flights a week and will allow routes between any U.S. and Brazilian cities, Bruno Dalcolmo, head of international relations at Brazil’s national aviation agency, Anac, said in a telephone interview from Brasilia yesterday.

A preliminary agreement has been reached between negotiators for the two governments, while a formal accord still needs to be made, he said.

More supply, combined with a strong local currency, should reduce the average ticket prices, Dalcolmo said. For the routes between Brazil and Europe, which don’t face the same restrictions, the average tickets are priced 30 percent lower than those for routes to North America, he said.

If the Brazilian real continues to strengthen against the American dollar, which is what makes tickets less expensive for local consumers, “the air traffic between Brazil and the United States will also continue to grow,” Dalcolmo said.

The real rose 33 percent against the U.S. dollar last year, the biggest gain among the world’s major currencies. This year, it is up 4 percent, at 1.6785 per dollar.

The U.S. and Brazil may start an additional 28 routes next year and 28 more in 2012, Dalcolmo said. Another 49 flights might be created in 2013, with the same increase in 2014 before the restrictions are eliminated in 2015, he said.

First Destination

The number of flights between the two countries advanced by 15 percent from last year, according to Anac. The U.S. is the first destination for Brazilian travelers, with 2.76 million journeying there last year, the agency’s 2009 data show. The second-most popular destination is neighboring Argentina, with 2 million travelers.

American Airlines Inc. has the largest market share -- a 32.5 percent stake, while Tam SA has 30 percent, according to Anac’s 2009 data.

Sao Paulo’s Guarulhos international airport, the country’s largest, won’t be able to start new flights until 2013 because of capacity limitations, Anac said.

To contact the reporters on this story: Arnaldo Galvao in Brasilia at agalvao1@bloomberg.net Fabiola Moura in New York at fdemoura@bloomberg.net;

To contact the editor responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net

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