Published On: March 8, 2018

Open Skies: Cheaper Flights to the US

Share This
Tags

ANAHEIM, CA - DECEMBER 13: Atmosphere at Disneyland's Sleeping Beauty's Holiday Castle and "Believe In Holiday Magic" Fireworks spectacular held at Disneyland Resort on December 13, 2007 in Anaheim, California. (Photo by Barry King/WireImage) *** Local Caption ***

This week Brazil’s Congress approved the Open Skies treaty between Brazil and the United States that clears the way for a partnership between American Airlines and LATAM Airlines. While the two airlines entered into an alliance last year, the alliance is a business arrangement. Open Skies is a legal treaty that will become law when it’s signed by President Michel Temer, which should happen quickly.

The previous business alliance between American Airlines and LATAM provided Brazilians with more options when flying to the US, which is the most frequent destination for Brazil’s international travelers. The alliance allowed for coordinating schedules and offering more connections between the two large companies.

passportHowever, Open Skies is expected to lead to increased interest by the entire US airline industry in the huge Brazilian market and therefore open up alliances between the other Brazilian airlines and US companies. Flights between Brazil and the United States are expected to surge by 30 percent as a result of Open Skies, according to Brazil’s tourism board, Embratur. The increase in the number of flights available between the US and Brazil will increase competition among the airlines. With more flights competing for flyers, prices should fall as well.

With the current alliance between American Airlines and LATAM, it’s possible to book a flight from Curitiba to Miami or New York or Los Angeles on American Airlines, while using LATAM to travel from Curitiba to São Paulo or Rio for the first leg of the journey before switching to American Airlines. This provides a welcome convenience for Brazilian travelers, who can check luggage in Curitiba all the way to the US. Flyers do not need to pick up their luggage in São Paulo or Rio, even though they are switching airlines, nor do they need to check-in again in São Paulo or Rio because the LATAM ticket agents in Curitiba provide boarding passes for the American Airlines flights to the US.

LATAM-1024px_01

Now, the Open Skies treaty will take this arrangement much further. The treaty allows for an unlimited number of flights between Brazil and the United States and should result in lower airfare prices because of increased competition. The previous alliance did not increase the number of flights to the US or lower flight prices.

The Open Skies treaty was originally proposed in 2011 but faced opposition from lawmakers who were lobbied by local airline interests in Brazil. The Brazilian airlines feared competition from US carriers, and the Open Skies treaty never became law. Now the Open Skies treaty will become law.

American Airlines applauded the treaty’s approval. “Open Skies treaties between two countries have proven to increase travel choices and enhance competition, resulting in greater benefits for consumers and positively impacting economic growth,” the airline said in a statement. “This deal benefits the whole of Brazilian society and is fundamental for the development of national aviation,” said Jerome Cadier, the CEO of LATAM Brasil.

New-York-City

The treaty was backed by GOL, Brazil’s second-largest airline, in which Delta Airlines has a 9.48 percent stake. Avianca Brasil, which hopes to seal a business deal with United/ Continental airlines in the near future is also supporting the treaty.

Brazil’s third-biggest airline, Azul, which started in 2008, initially opposed the treaty, arguing that it needed to establish itself in the Brazilian market before it was opened up to further competition.

Along with celebrations by Brazilians eager to fly to the US, Americans are also celebrating. In January of this year, the Brazilian government began offering its first electronic visas for Americans. Like Brazilians traveling to the US, Americans also must first purchase a tourist visa to visit Brazil.

Starting this year, however, Americans can file electronically for a tourist visa to visit Brazil. This is a tremendous increase in convenience for Americans as it’s no longer necessary to go to a Brazilian consulate in the US to obtain a visa. There are only seven Brazilian consulates in the entire US: Boston, Chicago, Houston, Los Angeles, Miami, New York, and San Francisco.

AmericanAirlines3

In addition to the increase in convenience by receiving the visa electronically, there is also a huge decrease in price. The cost of an electronic visa for Americans is now only U$40, whereas last year the tourist visa stamped inside a US passport from a Brazilian consulate cost U$160.

A similar electronic visa program has also been implemented in Australia, Canada, and Japan this year. Travelers apply online with an estimated approval time of 72 hours. Brazilian officials estimate that its new program will boost tourism from the US by at least 25 percent and possibly as much as 50 percent.

In the last 30 days, nearly 15,000 visa applications were requested by US citizens, an 87 percent increase from a year earlier. The number of Americans traveling to Brazil has increased 70 percent since Brazil introduced the electronic visa system in January, according to preliminary data gathered by the Brazilian government.

Following the implementation of the new electronic visa program, Brazil has reported record visitor spending. Brazil said international visitors spent U$779 million in the country during January, almost equal to what international visitors spent during the month of the World Cup soccer tournament in 2014.

[Research comes from the Travel Weekly website and the Reuters and Bloomberg news agencies.]

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>