Wednesday, January 15, 2014

World Cup Fans May See Airfare Relief


Football fans daunted by rising airfares in Brazil during this year's World Cup would be smart to steel their nerves just a little longer. Relief may be around the corner.
This week, Brazil is expected to authorise some 1,500 new domestic flights, expanding travel options between cities hosting games in June and July. Tourists should see a wave of new routes open up - and a bit of reprieve from high prices.
That could also ease tensions between Brazil's government and local airlines, who have faced repeated threats of intervention if price increases get out of hand.
Brazil's domestic aviation industry, the third-largest in the world, has come under intense scrutiny as one of the biggest potential embarrassments of the tournament. With a dozen host cities scattered around the vast country, millions of fans are expected to stream from one overcrowded airport to the next during the month-long event.
Prices have spiked as demand overwhelmed domestic networks since world football body FIFA determined in December where the 32 teams will play their first round of matches. Fans trying to follow Argentina from their Rio de Janeiro opener to their second game in Belo Horizonte, for instance, have seen the cheapest tickets double in price.
With Brazil's reputation as a rising global power on the line, President Dilma Rousseff is anxious to pull off a smooth World Cup, the first held in South America's football powerhouse since 1950. Success in what she has called "the Cup of all Cups" is also likely to help her chances of winning a second term in October elections.
FIFA chief Sepp Blatter said on Monday no host nation had been so far behind in World Cup preparations as Brazil, where workers are rushing to finish new stadia and airport terminals for the tournament just five months away.
The extra flights requested by airlines would further tax the country's most overloaded airports. In Cuiabá, a city of half a million in Brazil's sweltering soy belt, proposed routes would boost air traffic by 48 percent during the tournament.
Rousseff's chief of staff, Gleisi Hoffmann, acknowledged this week that Cuiabá may need a temporary canvas terminal if construction at the airport is not finished by May.
In an effort to prevent price gouging, Hoffmann has also warned that the government could open domestic routes to foreign carriers, but experts say that may prove to be an idle threat.
The practice, known as cabotage, is highly uncommon outside the European Union. Australia and Chile are among the few nations that allow foreign-owned airlines to operate domestic flights without a reciprocal relationship from another country.
Five months would be a tight timeline for the regulatory somersault involved in a temporary cabotage scheme, said Carlos Ebner, the head of IATA in Brazil.
"From the operational point of view, it would be very difficult," he said. "It's not impossible, but logistically and economically it is very hard to see how you would bring a great volume of extra flights from foreign carriers."
Airlines often book their planes half a year in advance, and European or US carriers are unlikely to have spare aircraft during the peak northern summer travel season, according to Ebner.
Setting up check-in, maintenance and other support crews at far-flung Brazilian airports would be costly. So would staffing flights: foreign crews are required to rest for a day or more after the long international routes that bring them to Brazil.
Under normal circumstances, flying in Brazil is expensive, and not just because of its size. There is no low cost airline to drive prices down and two major carriers - Gol and TAM control over 70 percent of the market.
Those carriers have been cutting routes, trimming fleets and firing flight staff over the past two years in an attempt to restore profits wiped out by high fuel prices and a tough exchange rate. The World Cup has loomed as a chance to restore their suffering profit margins.
The third biggest airline, Azul, pledged this week to cap airfares during the tournament at BRR999 reais, adding to pressure on rivals. But smaller planes and limited access to key airports hinder its ability to compete on many routes.
With few major hubs, travellers also have little choice but to fly through the country's two biggest cities, Rio and Sao Paulo, adding hours to many itineraries.
A fan attending England's first three games will likely connect through a southeast hub for a flight to Manaus on the Amazon river for the faceoff with Italy. The next game is back south in Sao Paulo against Uruguay, followed by a match in Belo Horizonte with Costa Rica - 4,000 miles in the air, all told.
Flight options between many host cities are also scarce. There are just a handful of direct flights from Rio to Manaus, which cost up to BRR1,800 reais for a four-hour trip.
The extra flights should cover demand and keep prices from taking off, said Paul Irvine, the director of Dehouche, a travel agency based in Rio de Janeiro that specialises in luxury travel to South America.
But visiting fans may also have to adjust expectations.
"The prices may seem astronomical compared to flying on easyJet or Ryanair, but not compared to Brazilian airlines normally," he said.