Brazil decides against opening to foreign carriers

Associated Press Updated: December 2, 2013 at 3:47 pm • Published: December 2, 2013 0

RIO DE JANEIRO (AP) — Brazil has decided against opening more routes for foreign air carriers for next year's World Cup, certain it can handle the millions of sports fans who will use airplanes to get around South America's biggest country.

In an interview with The Associated Press, Civil Aviation Secretary Wellington Moreira Franco said the idea of expanding routes for foreign carriers "was never considered." Moreira Franco said that Brazilian carriers can handle the load with 600,000 foreigners and more than 3 million Brazilians expected to head to matches.

Some fear Brazil could be stretched, its creaking airports already strained. The country has limited rail service, the road network is underdeveloped and overtaxed, and flying will be the only alternative for most traveling to the 12 host cities. The tournament opens June 12 in Sao Paulo and wraps up July 13 in Rio de Janeiro.

Brazil is just a little smaller than the United States or China, and it can take 10 hours to fly the 2,000 miles (3,200 kilometers) from the Amazon city of Manaus in the northwest to Porto Alegre in the southeast — depending on the connections.

Moreira Franco said plans should be announced in the next few days, perhaps pegged to the outcome of Friday's World Cup draw, when teams will be placed by lot into eight four-team groups.

"We will improve and increase the aerial grid to offer more flights," he said. "With that, not only will we take care of the demand, but it will cause a decrease in prices (of tickets)."

Moreira Franco's statement contrasts with that of Flavio Dino, president of the state-run Brazilian tourism agency Embratur, who said in a recent interview that the government was considering more foreign carriers.

"We have the view that it is important to ensure the expansion in the supply of flights," he said. "We will re-plan the flight grid in Brazil and take other measures subsequently if so required. ... If necessary, we may further open the market to companies that only do international flights currently."

Robert Mann, an independent airline industry analyst and former airline executive, doubts local carriers can handle the surge.

"Any of the Brazilian carriers will think they can do this on their own, but the problem is they will end up flying airplanes full in one direction and empty in another," said Mann, who is based in New York. "If they say they can do this on their own, they really haven't thought it through."

Mann listed three bottlenecks: airport terminal capacity, air traffic control capacity and limited passenger capacity for domestic carriers.

"I haven't operated an airline in Brazil for almost 20 years, but when I last did, it was a bureaucratic nightmare."

Another analyst suggested there may be few problems because casual tourists will stay away.

"I think they'll handle it just fine," said Savanthi Syth, an analyst with Raymond James, a financial services company. "The regular traffic stays away and gets backfilled with traffic related to the World Cup."

Many of Brazil's airports are outdated, particularly in Rio de Janeiro and Sao Paulo. Airports in both cities are getting minor facelifts, but major improvements won't be ready until after the Cup.

Moreira Franco acknowledged there will be few upgrades for the World Cup, but said things would be ready for the 2016 Rio de Janeiro Olympics. He said airport privatization aimed at improving services had taken longer than expected.

"In the Olympics we won't have any problems of any nature," Moreira Franco said "We are having some (problems) today because of the structure of Brazilian airports, and only now are we working to bring them up to the 21st century."

James Carrol, an American engineer who travels regularly between the United States and Brazil, summed up problems as he departed Rio's main airport.

"We're concerned about the load that's coming next year and the following year," he said. "I think the language barrier is going to be fine, but being ready to handle all the airplanes coming in? We don't think it's going to be ready."

High prices are a concern, through for some it won't matter.

In an email to the AP, Dubai-based United Aviation Services, which provides business, charter flights, and tour packages, estimated that 11 percent of visitors to the World Cup will travel into and around the country by private jets. UAS's estimate for South Africa four years ago was 7 percent.

UAS also estimated 3,000 business aircraft will be flying in Brazil during the World Cup. Its figures indicate hotel prices will be higher than they were in London for the 2012 Olympics, though it said it could not say how much higher.

Embratur, the state-run tourism agency, has said rates may increase up to 500 percent during the World Cup in some hotels offered by the FIFA-appointed agency MATCH Services. The Brazilian Justice Ministry has asked hotels to explain, and Brazil President Dilma Rousseff has created a committee to monitor hotel prices.

The government may have little clout, however, since airlines and hotels are free to set prices.

Local newspapers reported last month that hostels in some host cities were charging $435 per night, per person, for a room with a shared bath. Some flights between Rio de Janeiro and Sao Paulo — a 45-minute shuttle — are selling for $800 round trip, and could be even higher during the World Cup.

Online travel services show prices for some mid-range hotels in Rio topping $1,500 a night during the World Cup.

"It's the equivalent of peak-season flying," said Mann, the airline industry analyst. "If you want to go somewhere when everybody else wants to go, you can expect to pay more. That's just economics 101. No one is going to repeal the laws of economics for this event."

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Follow Stephen Wade at http://twitter.com/StephenWadeAP

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