The United States and Brazil have concluded an agreement that will provide for a nearly 50 percent increase in passenger flights between the two countries as well as eliminate restrictions on the number of airlines that can provide U.S.-Brazil air service, U.S. Secretary of Transportation Mary E. Peters announced today.

"This agreement will help air carriers meet the growing demand for passenger and cargo services between the United States and Brazil," said Secretary Peters. "Now more than ever, it is crucial that we give U.S. carriers every possible opportunity to compete and succeed wherever passengers want to fly."

Any number of U.S. or Brazilian airlines now may fly between the two countries, removing the previous limit of four carriers from each side. The agreement also will, in four stages between July 2008 and October 2010, permit an increase in the number of weekly U.S.-Brazil passenger flights from 105 to 154 for each country's carriers, Secretary Peters added.

The agreement also will allow expanded air cargo services between the United States and Brazil. The number of weekly cargo flights may expand from 24 to 35 immediately, and to 42 in the year 2010. In addition, the agreement allows cargo charter flights to increase from 750 per year to 1,000 immediately and to 1,250 in 2010. U.S. cargo companies also will be allowed to transfer freight from aircraft to trucks for door-to-door delivery in Brazil.

Under the agreement, U.S. carriers may serve five new cities in Brazil - Fortaleza, Curitiba and three others to be selected by the United States. Currently, American Airlines, Continental Airlines, Delta Air Lines and United Airlines provide service between the United States and Sao Paolo and Rio de Janeiro. The agreement also allows, for the first time, U.S. and Brazilian carriers to provide certain types of service on a code-share basis with their partner airlines from third-countries.

The delegations agreed to apply the terms of the agreement on a reciprocal basis until it enters into force.