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Brazil's Azul to fly Rio de Janeiro-Sao Paulo route, challenging Gol, LATAM

SAO PAULO, Aug 12 (Reuters) - Brazil's No. 3 airline, Azul SA, said on Monday it would start operating 17 flights per day between Sao Paulo and Rio de Janeiro, the country's most transited route, currently dominated by the country's No. 1 and 2 carriers.

Flights on the route between Brazil's two largest cities came up for grabs after the No. 4 airline Avianca Brasil ceased operating in May after filing for bankruptcy.

LATAM Airlines Group and Gol Linhas Aereas Inteligentes, which already operate the lion's share of the more than 100 daily flights on the route, had in recent months spent millions of dollars to try to further increase their shares.

But Brazil's antitrust regulator in June issued a report raising concerns about market concentration in the domestic airline industry. The civil aviation regulator, ANAC, also said it would take back Avianca Brasil's landing and departure rights in Sao Paulo's airport as part of a plan to redistribute them later.

Azul will begin to operate the flights on Aug. 29, the company said in a securities filing. (Reporting by Marcelo Rochabrun Editing by Sonya Hepinstall)