By Lise Alves, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – Brazil’s President, Michel Temer, lifted on Thursday restrictions to foreign capital participation in Brazilian airline companies. With the measure, the limit of 20 percent of foreign capital in national airlines ceases to exist and Brazilian companies may have 100 percent of foreign capital.
Officials say the lifting of restrictions was not aimed at helping Avianca, one of Brazil’s largest airline companies, but admitted the measure could help the financially ailing airline.
This week, Avianca filed a petition for judicial recovery (similar to US’s Chapter 11) in São Paulo. The company has a $144.6 million-dollar debt with suppliers and airports.
“Avianca, consequently, may benefit in this process. With this measure, some international company may be interested in improving the financial conditions of Avianca. ” stated President Temer’s Chief of Staff, Eliseu Padilha.
According to Padilha, with the measure the sector will become more competitive and the consumer will benefit from it.
“This solves one of the main problems of Brazilian aviation, which is the source of funding for aviation companies. With this, we have the opportunity to have the participation of foreign capital in the financing, regardless of its origin,” stated Padilla, during the press conference to announce the measure.
According to the Minister of Tourism, Vinicius Lummertz, the new policy will stimulate the emergence of new companies, and put Brazil’s tourism in another world level of competitiveness.
“It will promote the opening of new routes, the creation of new flights, the reactivation of airports and the reduction of the price of tickets for the traveler, because it deconcentrates and encourages the growth of the market,” said Lummertz.