Argentina flu fears hit Brazil airline Gol

By Cesar Bianconi

SAO PAULO, July 8 (Reuters) - Brazilian airline Gol (GOLL4.SA) has seen a "sharp" drop in passenger numbers on flights to Argentina, the company's chief executive said on Wednesday, where the H1N1 flu virus has so far killed 60.

Brazil's southern neighbor is the most important foreign destination for the airline but the company said the seat occupancy rate on the routes had fallen 50 percent in the last few weeks, leading to cancellations of some chartered flights.

CEO Constantino de Oliveira Jr said there were no plans to reduce the number of regular flights to and from Argentina but added that the idea had not been ruled out.

"If there are no passengers, we can't maintain the service," he said at a news conference.

The Sao Paulo-based company is revamping routes and cutting costs after a plunge in demand for travel and costs related to the takeover of rival Varig in 2007 led to six straight quarters of losses through the end of last year.

Over the past months, Gol also ended flights to European and North America destinations and trimmed the frequency of flights to some South American capitals.

Argentina has closed schools and given time off work to public-sector workers to curb the spread of the flu, which has been most prevalent in and around the capital, Buenos Aires. Some areas have declared emergencies and closed some public places.

Brazil's government has advised citizens to avoid travel to the country. Several Brazilians have returned home from trips to Argentina infected with the illness.

Argentina operates 14 daily flights to Buenos Aires, Cordoba and Rosario. Canceled charter flights were mainly to popular Andean ski destination Bariloche.

Oliveira said Gol generates around 90 percent of its revenue from domestic routes and that the Argentina routes account for less than 3 percent of Gol's revenue. Oliveira said new flights to the Caribbean offset some of the revenue losses. (Writing by Peter Murphy, editing by Matthew Lewis)