SÃO PAULO— The latest chapter in the fight between Brasilia and the domestic airlines began last December when Gleisi Hoffmann, President Dilma Rousseff’s chief of staff, said "The government is considering allowing foreign companies to operate on domestic routes during the World Cup because ticket prices are very high"
Games will be played in 12 cities and tickets on some segments are now selling for as much as $1,200. Some fans will watch games in four or five different cities, tourism officials say. The hot England-vs.-Italy match, for example, will take place in Manaus in the heart of the Amazon basin.
Ms. Hoffmann talked about “abuse” in pricing, and said the obvious solution was more competition.
Last week Azul Linhas Aereas Brasileiras, Brazil’s third-biggest airline, said that it will charge a maximum price of $420 per leg of any travel during the month long event. By capping prices, the company will lose about 20 million reais in revenue.
Azul plans to cancel about 20% of its 900 daily flights during the June 12-July 13 soccer tournament because of a drop-off in demand from business travelers during the competition.
Azul will ask civil aviation regulator Anac to allow them to add about 300 more flights between the 12 host cities during the league play round of the competition, and to add another 300 flights during the knockout round of the competition, when fewer cities host games.
Viracopos airport, where Azul has its hub, is undergoing reforms to double capacity. Mr. Neeleman, Azul CEO, is confident that construction will be completed on time.
adapted from WSJ and The Globe and Mail
