SAO PAULO, Sept 29 (Reuters) - Brazilian airlines expect to burn through 7.3 billion reais ($1.8 billion) of cash this year and at least 50 percent more in 2016 as a plunging local currency drives up costs for fuel as well as leases, industry association Abear said on Tuesday.
Brazil's currency, the real, has weakened 36 percent against the U.S. dollar so far this year, worsening a long-running crisis in the local airline industry.
Gol Linhas Aereas SA has posted 14 straight quarterly losses while rival LATAM Airlines Group SA has suffered with the performance of its local TAM unit.
Abear President Eduardo Sanovicz estimated that airlines' costs would rise 24 percent this year due to the stronger dollar, while revenue is seen rising just 4 percent amid a sharp economic recession.
If the real recovers next year to an average 3.88 per dollar, Sanovicz estimated that airlines' cash burn would rise to 11.4 billion reais. If the currency keeps weakening to an average 4.44 per dollar, cash burn could climb to 12.1 billion reais, he said.
Abear is pressing the government for relief on airport fees and fuel taxes to save airlines an estimated 6 billion reais in 2016.
But President Dilma Rousseff has little fiscal room to maneuver as she pushes an austerity program aimed at avoiding another Brazilian downgrade from the credit ratings agencies. ($1 = 4.12 Brazil reais) (Reporting by Priscila Jordao; Writing by Brad Haynes, editing by G Crosse)