US Airways eyes Rio routes as it seeks to enter Brazil market


Looking to shore up shaky international capacities, four major U.S. airlines applied to the Transportation Department for coveted routes between the U.S. and Brazil. The four included US Airways, a newcomer to the market.

American, Continental and Delta also applied for new routes, most of which would be open for service starting June 1. Spirit initially had expressed interest but withdrew its application, saying it would likely reapply for access to the Brazilian market in 2010.

For US Airways, this would represent its first foray into South America's largest market. The other airlines are looking to build service on a key, growing north-south international haul as the recession whittles down demand on transatlantic and transpacific services.

US Airways applied for rights to operate seven weekly flights, beginning either in June or October, between Charlotte and Rio de Janeiro using 767-200s.

The proposed service would originate in Philadelphia, stop in Charlotte and continue to Rio. The return flight would operate with A-320s from Charlotte to Philadelphia.

US Airways President Scott Kirby told analysts last month that the carrier's preference would be to operate between Charlotte and Sao Paulo, Brazil's financial center, "but there are no rights open for Sao Paulo, and we expect both markets to be profitable." The airline hopes eventually to serve both cities, Kirby said.

With its estimated $190 billion in exports, newly found oil reserves and the promise of big business in a down economy, Brazil is a tantalizing opportunity for US Airways, and it urged the DOT to act fast.

"This selection proceeding has been delayed far too long already, and it is time to move forward promptly," the airline's DOT application said.

Others also recognize the market's potential.

"Brazil is one of the more promising emerging economies out there and, given its relative proximity to the United States, it can be served via all U.S. carriers more or less, which increases the demand for U.S. carriers wanting to serve it," said LECG consultant Darin Lee.

New U.S.-Brazil routes became available under agreements reached between the two countries last year. The DOT late last year asked for applications from carriers seeking to operate seven additional weekly frequencies limited to points in the north, northeast and midwest regions of Brazil as well as Belo Horizonte and Rio.

Airlines also can apply to operate seven additional weekly combination service frequencies to any point in Brazil authorized for service from the U.S. starting in October.

American applied for three weekly frequencies to operate nonstop service between New York Kennedy and Rio, using B767-300 aircraft with 225 seats. The carrier wants to start in June, and if that application is denied the airline is also applying to begin service in October.

Continental applied for daily New Orleans-Houston-Rio service beginning in June.

Delta applied to operate daily nonstop service between Atlanta and Rio. The airline proposed year-round service starting Dec. 18, using 215-seat 767-300ER aircraft.

At the end of last year, Delta started service between Atlanta and the Brazilian Amazon city of Manaus and the northeastern coastal destinations of Fortaleza and Recife.

Delta has been hoping for the agreement to open up even more routes, particularly to Rio and, even more desirable, to Sao Paulo, both of which are markets the airline already serves.


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