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Rivals line-up for Transbrasil routes

Transbrasil's loss of its route-operating permit on 2 January has led to Brazil's leading carriers swiftly moving to secure the airline's remaining assets. Transbrasil suspended operations on 3 December, leaving its traffic rights open to bids after 30 days.

Last week, the Brazilian civil aviation authority, the DAC, gave Transbrasil six months to resume its activities. This is the maximum limit under Brazilian law that a carrier can remain inactive without losing its operating license and its route permits, so Transbrasil has to resume flying by early June.

TAM and Varig have already begun talks with unions and the Brazilian government to absorb Transbrasil's airport installations and route network. Low-fares carrier Gol Transportes Aéreos is also planning to bid.

Local analysts see little hope that Transbrasil will be able to resume its services, notwithstanding continuing negotiations with an undisclosed potential airline partner to relaunch some scheduled flights with a fleet reduced to two Boeing 737-300s, one Boeing 767-200 and two Embraer Brasilias.

Before suspending flights, Transbrasil's route network consisted of 90 daily flights to 22 destinations, and these are the prime targets for TAM and Varig in their discussions with the Brazilian government. Transbrasil slots on the Rio de Janeiro/S‹o Paulo shuttle service alone are said to be worth around $67 million.

TAM has indicated its willingness to absorb Transbrasil's routes, installations and its 1,200 employees - a plan that has the backing of local aviation unions. Varig, on the other hand, has pressed for the opening of a bidding process to acquire Transbrasil's routes.

Although DAC is empowered to reallocate services from scheduled carriers unable to meet theirobligations after a 30-day period, the Brazilian government agency says it would not do so in the near future.

DAC sources say that while every possibility is being examined to keep Transbrasil alive, the withdrawal of licences is at the agency's discretion once it has ascertained that the carrier is no longer viable.