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The Senate approves 100% foreign capital in the air and free luggage up to 23 kg of policy

The Senate approved on Wednesday (22) a temporary measure authorizing the participation of up to 100% of foreign capital in Brazilian airlines.

The text also provides free baggage of up to 23 kilograms for airplanes with more than 31 seats on domestic flights (see More Details Below).

This passage was not in the original text of the MEPs but was proposed by the rapporteur on the proposal, Senator Roberto Rocha (PSDB-MA) and by an accent approved by MPs during a vote Tuesday.

Following is the proposal for the sanction of Republican President Jair Bolsonaroo. The head of the executive has the right to veto a part of the proposal.

MEPs' analysis should have been made by the Senate on Wednesday. Since it was a temporary measure, the text had the force of the law since it was published in December 2018 by former President Michel Temer but had to be approved by Congress within 120 days. Otherwise, the rules will stop.

The lawmaker amended the Brazilian code for aeronautics and found that the concession or license would only be granted to companies that comply with Brazilian law and have their headquarters and administration in the country. However, this does not prevent companies from owning 100% of foreign capital.

Prior to the provisional measure, the Brazilian Aviation Code found that at least 80% of the airworthy capital must belong to the Brazilians – that is, it limits to 20% of the foreign capital with voting rights in the companies. The MP canceled this restriction and fully opened the companies to foreign capital.

The text also removes from the Brazilian Aeronautics Code the prognosis that the company's direction will be "entrusted exclusively to the Brazilians".

Senator Fernando Bezera (MDB-PE) said the full opening of foreign capital companies would increase competition and cut tariffs.

"We are making an important step towards opening new businesses, oxidizing the national air market, increasing competition, reducing tariffs and offering different levels of service to the needs of every passenger," he said.

In practice, the approved text prohibits, in the case of domestic flights, the collection by undertakings of baggage of:

  • up to 23 kg of airplanes over 31 seats;
  • up to 18 kg for aircrafts with 21 to 30 seats;
  • up to 10 kg if the airplane has only 20 seats.

With the text, in terms of flights, the suitability of luggage for smaller capacity aircraft will have an advantage.

Also, according to the proposal, for international flights, the allowable amount of luggage will be made from the part or weight system according to the criteria adopted in each area and in accordance with the specific provisions.

In 2016, the National Civil Aviation Agency (ANAC) issued a resolution that gives the passenger the right to carry cabin luggage up to 10 pounds in the cabin, but has allowed airlines to charge checked baggage.

At present, 23 kg of domestic flights and 32 kg of international flights are charged separately, with an additional ticket amount. Each company determines the collection criteria and the dimensions of the suitcases.

If President Jair Bolsonarot decides not to veto the deputies' section that forbids the collection of luggage, Anak's decision must cease to be valid.

Senator Reguffe (without DF party) defended the cash prize and said ticket prices did not fall when the luggage charge was met.

"When the indictment was found for luggage, it was said that the ticket price would fall, it did not fall, and that's not what will prevent a foreign company from coming here." The Brazilian market is big, big, everyone wants to come here Regguf said.

As the deputy would lose its validity, Senate leader Fernando Bezerra (MDB-PE) announced that it had reached an agreement to vote on the text on Wednesday.

According to the government leader, Planalto is committed to signing a bill or supporting the bill to allow airlines to operate at least 5% of their flights on regional routes for at least two years.

Such a proposal was in Roberto Rocha's report but was withdrawn from the draft when the text passed through Parliament.

"The government has committed itself through its leader and with the approval of the Civic House – by decree that will regulate the transformation bill – to redeem the device from the 5 percentage points to boost regional aviation to international companies that are going to enter the Brazilian market, "said Bezerra.

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