Brazilian government relaxes its grip on air fares

Brazilian tourism could get a major boost from the government's decision to eliminate the minimum international flight prices within the next year.

According to the Diário Oficial (Federal Daily Gazette), the country's National Agency of Civil Aviation (ANAC) authorized the granting of discounts of 20% on established minimum fares for international travel outside South America.

Currently all Brazilian air fares must respect a minimum price but once the decision is published in the Official Gazette air carriers will be able to offer 20% rebates on the current fares. Three months later the rebate will increase to 50%, and another three months later to 80%. Six months later minimum prices will disappear and companies will be able to offer whatever fares they wish.

The discounts will be applicable to a list of ANAC minimum or floor fares for flights to, Asia, Africa, North America, Central America, Europe and Oceania. Earlier, last year ANAC had applied a similar gradual system for flights to South American countries originating in Brazil, which culminated last September. Brazilian domestic flights were the first to benefit from the new fares system, which is contemplated in the ANAC creation Bill.

According to Marcelo Guaranys, ANAC's director, the real reduction of price will depend on the competition between the Airlines. "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" he comments.