By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – President Dilma Rousseff of Brazil signed on Tuesday (March 1st) a legislative decree issued by the Executive increasing the participation of foreign capital in Brazilian airline companies. According to officials, the participation limit for foreign capital in Brazilian airlines was increased from the current 20 to 49 percent.
With the measure, the Rousseff Administration hopes to attract new, foreign investments to the Brazilian aviation sector, hit hard by the country’s economic woes.
“This is a very favorable moment to attract foreign investment… we should not restrict the access of capital of these companies,” Interim Aviation Minister Guilherme Ramalho was quoted by Reuters on Monday as saying.
For the Brazilian Association of Airline Companies (ABEAR) any measure that brings the Brazilian aviation market closer to the international market is welcomed. “This initiative, along with the others which are currently being discussed at the SAC (Aviation Secretary) and Anac (National Aviation Agency), is positive since it expands the environment for lower cost aviation,” stated ABEAR president Eduardo Sanovicz in a press release on Wednesday.
According to Abear with the ailing economy, domestic air travel is registering some of the worst results since the entity started to compile data. Figures from the association show that the demand for domestic flights in January registered the worst result for the month in the entity’s history, falling by four percent in comparison to the same period last year. The retraction in January was the sixth consecutive decline for the sector.
The decree signed by President Rousseff on Tuesday will now be sent to Congress where it will have 120 days to be discarded or signed into law.