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LATAM's northeast Brazil hub pushed back by crisis

LATAM Airlines Group is unlikely to announce the site of a planned hub in Brazil’s northeast this year, as the country’s political turmoil puts the decision on hold.

LATAM, the parent of Brazil’s TAM, had earlier shortlisted three cities as potential locations for a new hub in the country’s northeast. It had initially planned to announce a decision by end-2015 but subsequently postponed this to the first half of 2016.

A decision might not be imminent this year, says Pablo Chiozza, LATAM’s senior vice-president for USA, Canada and the Caribbean.

“I don’t think it’s going to happen this year,” he tells Flightglobal in an interview in Washington DC. “We are going there [Brazil’s northeast] but everything got delayed by the Brazilian economy.”

The three cities that LATAM earlier shortlisted are Fortaleza, Natal and Recife. The hub is meant to boost connectivity between Brazil and Europe.

Brazil is struggling through an economic and political crisis as president DIlma Rousseff faces impeachment.

The political uncertainty has also thrown into question the timeline of ratification of the US-Brazil open-skies agreement by Brazil’s congress. Ratification of the deal is crucial in allowing LATAM to form a joint venture with Oneworld partner American Airlines, which is pending regulatory approval.

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