Brazil airlines shares rise on relief amid Lula push for lower ticket prices

Shares of Brazilian airlines rose on Tuesday on investor relief that a government deal to lower ticket prices was not as heavy-handed as some expected, amid President Luiz Inacio Lula da Silva's personal campaign to make airfare more affordable. Carrier Azul rose over 4% in Sao Paulo trading, while rival Gol gained more than 3%, among the top gainers on benchmark stock index Bovespa, which was up 0.6%. Both agreed with Lula's government on Monday to cap prices for millions of domestic tickets. "Our view is the market expected something worse," analysts at Genial Investimentos told clients in a note, adding that the price-capped fares should not "significantly" reduce 2024 yields, an industry pricing gauge. Still, the Ports and Airports Ministry called the pricing agreement the "first step" of a program to bring down fares, and Lula floated the prospect of legislative action to tackle air travel costs at a 14-year high. "That is something both government and Senate will have to address, so that we can try and find a solution," the leftist president told an event late on Monday. "There is no explanation for the prices of airfare in this country." Airlines say the local market reflects a global trend, with heated demand for air travel after the pandemic and supply chain issues affecting planemakers' ability to deliver new aircraft that would increase capacity.<br/>