It is vital for Brazil's Congress to approve a bill opening up the country’s airline industry to foreign investment, in its original format and not with changes that could deter LCCs, José Ricardo Botelho, president of the National Civil Aviation Agency (Agência Nacional de Aviação Civil, ANAC) has warned in an interview with Bloomberg.
Years to attempts at encouraging greater competition in the domestic aviation sector, which is dominated by GOL Linhas Aéreas Inteligentes (G3, São Paulo Congonhas), LATAM Airlines Brasil (JJ, São Paulo Congonhas) and Azul Linhas Aéreas Brasileiras (AD, São Paulo Viracopos), have so far achieved little.
Now ANAC is concerned that any changes made in Congress to the proposed aviation law, such as forbidding airlines from charging for baggage and ancillary products, could make Brazil unattractive for companies considering entering the market like SKY Airline (Chile) (H2, Santiago de Chile) and Norwegian (Oslo Gardermoen).
Since taking power on January 1, the new administration of President Jair Bolsonaro has pledged to attract investments and boost the economy, and in April the aviation bill was approved by a congressional committee. But it must still be backed by both houses of a highly divided Congress.
ANAC has faced a public backlash over expanding baggage charges in the law, which populist politicians have threatened to strike out.
“This bill is the last step that would allow an increase in investments, jobs and competition in Brazil. We want to bring in low-cost companies, but if the changes proposed in Congress go through, that won’t be possible,” Botelho insisted.
“The only way to bring plane ticket prices down is with more competition, more companies. The changes that Congress is proposing to our bill would go in the opposite direction.”
