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Brazil is a massive country and so if you are on a short holiday you will want to fly internally. If you will be flying to a number of destinations it is definately worth looking at getting an air pass. These must be bought outside of Brazil and they are not valid for Brazilian residents. It is possible to fly up to 9 times and the air pass cannot last longer than 21 days. TAM is the best provider of air passes and more information is available on their website. Varig, Brazil's national carrier, has problems at the moment so it is recommended to avoid them as many flights are cancelled.
The number two airline internal to Brazil at this time is Gol Airlines ( www.voegol.com.br). They do not offer air passes but are consistently the least expensive airline to most destinations in Brazil. They also have a more modern fleet of planes with many flights using a Boeing 737. TAM uses Airbus but also some Fokker 100 planes that are a bit older. TAM also has a bit of a rocky record with the Fokker 100s with 9 incidents since 1990. The other nice advantage Gol has is that a foreigner can purchase tickets via their web site with a foreign credit card (AMEX only though). TAM does not accept foreign credit cards (issued on banks outside of Brazil) at this time.
In addition to the above there are smaller airlines that just operate in a few states. For the southern part of Brazil Trip Airlines covers the states of Mato Grosso, Mato Grosso do Sul and Amazonas. This airline flies to some of the smaller airports which the bigger airlines ignore; for example Alta Floresta In Mato Grosso. Unfortunately the web site is only in Portuguese. Ocean Air is another internal airline. It covers about 34 cities, mainly on the coast.