=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/2004/03/17/f= inancial1546EST0193.DTL --------------------------------------------------------------------- Wednesday, March 17, 2004 (AP) Brazil's two largest airlines cancel merger plans, maintain code sharing (03-17) 12:46 PST SAO PAULO, Brazil (AP) -- Brazil's two largest airlines, Varig and TAM, canceled plans Wednesday f= or a merger but said they would continue a code-sharing agreement that has helped both carriers reduce empty seats on flights. Varig and TAM announced plans for the merger a year ago amid a worldwide travel slump and a currency crisis in Brazil that forced Varig, Brazil's largest carrier, to the brink of bankruptcy. But Varig managed to reduce its losses last year and posted an operating profit for the first time in years during the third quarter of 2003. Both airlines have benefited from a recovery in the Brazilian economy and a corresponding rise in travel. A union of the two airlines would have given Varig and Tam about 70 percent of Brazil's domestic flights, a move that could have hurt VASP and Gol, the country's two other major carriers. One of Brazil's three antitrust bodies said Wednesday that Varig and Tam will be allowed to continue to operate flights jointly. ---------------------------------------------------------------------- Copyright 2004 AP