Brazil Lower House Votes to Allow Foreign Airlines in Domestic Market

By Newsfeed/Reuters

RIO DE JANEIRO, BRAZIL – Brazil’s Chamber of Deputies voted on Tuesday to allow foreign-controlled airlines to operate domestic flights in Latin America’s largest economy, opening the door to more competition in an increasingly concentrated market.

The chamber approved the original text of a Provisional Measure issued by former President Michel Temer in December that removed the twenty percent limit on foreign ownership of Brazilian airlines.

The approved text which will be sent to the Senate, also included a controversial provision ordering domestic airlnes to allow all passengers one free piece of luggage up to 23 kilos on flights having more than 31 seats. The upper chamber is expected to pass the measure, which would then go into effect immediately.

The removal of the restriction could lure a foreign carrier eager to jumpstart its presence in the domestic market or open the door for international airlines dramatically to increase their existing stakes in the largest Brazilian carriers. Air travel within Brazil has become more concentrated, with three airlines now operating 92 percent of all flights, according to the civil aviation regulator ANAC.

In a parellel development, Spanish-based Air Europa had already requested authorization to operate domestic flights in Brazil.

The airline’s decision, notwithstanding the faltering Brazilian economy and the problems faced by the aviation sector, was celebrated by government officials.