=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/02/10/f= inancial1706EST0261.DTL ---------------------------------------------------------------------- Tuesday, February 10, 2004 (AP) Brazil's two biggest airlines put merger plans on indefinite hold (02-10) 14:06 PST BRASILIA, Brazil (AP) -- Following a year of negotiations, Brazil's two biggest airlines announced on Tuesday that they have put merger plans on hold indefinitely. Varig and TAM, Brazil's top air carriers, said that instead they would create a loosely defined "association" that will manage the companies' existing code-sharing agreement. Such agreements typically make it easier for passengers to book travel using either airline. Luciano Coutinho, a consultant for the two carriers, said a merger has been postponed indefinitely. He said the "association" may pave the way for an eventual merger between the airlines, but he offered no details on how that might happen. He said a merger "is a process that can't be done in weeks or months; it= 's a process that would take at least two years." He added, "We would like this process to take place in an environment of low risk," referring to heavy debts affecting both companies. Coutinho met Tuesday with officials of the Brazilian Anti-trust Agency. The agency recently called upon the two companies to define their merger plans or face cancelation of the code-sharing agreement. The anti-trust panel originally allowed the code-sharing agreement to be put together in March of 2002 as part of a temporary effort aimed at helping the two companies overcome financial difficulties caused by poor demand in the wake of a worldwide decline in air travel. Tuesday, the agency said it will study the possibility of allowing other Brazilian airlines to establish code-sharing agreements. ---------------------------------------------------------------------- Copyright 2004 AP