SAO PAULO, Dec 19 Reuters Shares of Brazilian airlines rose on Tuesday on investor relief that a government deal to lower ticket prices was not as heavyhanded as some expected, amid President Luiz Inacio Lula da Silva39;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 Lula39;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 pricecapped 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 14year 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 planemakers39; ability to deliver new aircraft that would increase capacity.

I39;m being called to Brasilia every week because of ticket prices, Azul Chief Executive…