December 21, 2017 / 12:02 PM / 5 months ago

Brazil plans to end Open Skies negotiation with EU

BRASILIA, Dec 21 (Reuters) - Brazil’s civil aviation regulator ANAC intends to close the negotiation of an Open Skies treaty with the European Union after eight years without reaching agreement, a senior ANAC official said.

The stumbling block has been the EU’s refusal to grant Brazil the so-called fifth freedom traffic rights, which would allow Brazilian airlines to pick up passengers in EU countries when they continue to destinations outside the bloc, he said.

“Unfortunately, we are considering ending the negotiations because they are not going anywhere,” ANAC director Juliano Noman said in an interview on Wednesday. “The EU does not want to give us fifth freedom. We do not think that is reasonable.”

No Brazilian airline now flies to Asia, but ANAC wants to prepare for expansion to a region where Brazil’s business ties have grown since China became its number one trade partner.

Stops to refuel in Europe and take on passengers would enable Brazilian flights to Asia, Noman said.

Brazil’s lower house of Congress on Tuesday approved an Open Skies agreement with the United States that includes the fifth liberty. That would allow Brazilian airlines to reach Asia via the U.S. West Coast.

European Commision member Violeta Bulc wrote to Brazilian Transport Minister Mauricio Quintella last month urging Brazil to continue negotiating.

“It is unfortunate that our positions have recently widened on the only main outstanding issue, the so-called fifth freedom traffic rights,” she said in a letter seen by Reuters.

But Brazil sees no future in reaching a bloc-wide Open Skies accord with the EU and wants to update bilateral agreements with a dozen European countries that have not been changed in the eight years of talks with the European Commission in Brussels.

The ANAC has been resorting to provisional authorizations for airlines that have hit their limit on flights to Brazil.

They include TAP Portugal, which flies to 10 Brazilian cities, and KLM, which is building a hub in the northeastern Brazilian city of Fortaleza with partner Air France.

LATAM Airlines Group SA and Azul Linhas Aéreas , the only two local carriers that fly to the EU, are currently using less than their quota.

More Brazilians were flying to Europe as Brazil pulls out of its worst recession and growing demand would push up fare prices if more flights are not added, Noman said. (Reporting by Anthony Boadle; Editing by Edmund Blair)

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