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South America aviation grows in Olympics boom

Oct. 3, 2012 at 5:04 PM   |   Comments

RIO DE JANEIRO, Oct. 3 (UPI) -- Brazilian aviation companies are beginning to respond to the expected boom in air traffic before the 2014 FIFA World Cup and the 2016 Olympics.

Dozens of enterprises have relocated from London to Brazil and southern United States to pick up from the conclusion of the Olympics in the British capital and to compete for business in Brazil before the World Cup and the Olympics.

Air traffic to Brazil is on the increase amid preparations for the two sporting events.

In addition, Brazilian government promoters are busy building up Rio de Janeiro and other Brazilian cities as destinations for tourism, business conferences and security-related activities.

Demand for security-related business in Brazil has responded to lessons learned during the London Olympics, although there is continuing resistance in the Brazilian government to farming out security jobs to the private sector, analysts said.

Allocation of security duties in London raised controversies and divided British government over its efficacy.

Brazilian airport authorities earlier announced plans for extensive modernization of passenger screen facilities, airport terminals and transport links between airports, Rio de Janeiro and adjoining cities likely to be used by sport officials and competitors.

In the run-up to the World Cup and Olympics, Brazil's Gol Linhas Aereas Inteligentes signed a $6 billion deal with Boeing for the purchase of 60 Boeing 737 Max aircraft as part of its medium-term expansion plan. Delivery of the aircraft is likely to begin after the conclusion of the events.

The 737 Max model is said to be suitable for the expected expansion in traffic in Brazil and adjoining destinations.

The 737 Max has new engines from CFM International and new winglets. Boeing said the design will deliver better fuel efficiency and fewer carbon emissions than earlier models.

"Boeing has partnered with Gol since their inception just over 12 years ago," Boeing Commercial Airplanes President and Chief Executive Officer Ray Conner said.

"We've watched them grow from a small start-up airline to a driving force in global aviation and we are proud to partner with them as the South American launch customer for the 737 Max," he said.

Gol's purchase of the 737 Max was prompted by fuel efficiency concerns. The airline has been losing money, partly because of higher fuel prices, and has responded to the rising energy by cutting back on its work force.

At least 2,500 positions at the airline have been put at risk by what the company says are rising energy costs. The airline is also under shareholder pressure to move back into profitability.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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