SAO PAULO Jan 12 The Brazilian government has
drafted a decree allowing foreign companies to own 100 percent
of airlines based in the country, newspaper Valor Econômico
reported on Thursday.
Citing three unnamed aides to President Michel Temer, Valor
said the presidential decree in the works would also boost
regional aviation with subsidies favoring smaller planes like
those made by domestic planemaker Embraer SA.
The decree may be published by the end of January, according
to Valor. Media representatives for the president, civil
aviation agency Anac and officials at Transportation Ministry
were not immediately available for comment.
Foreign ownership of Brazilian airlines was the subject of
intense debate last year, with legislative uncertainty leaving
investors doubtful of whether the government would pass rules to
boost the struggling industry in the face of a harsh recession.
In March, former President Dilma Rousseff issued a decree
lifting the limit on foreign ownership of airlines from 20
percent to 49 percent. During congressional review of the
measure, however, lawmakers lifted the limit from 49 percent to
100 percent, leading Temer to veto the provision altogether.
This returned the limit to 20 percent.
Valor reported that the new decree's language about foreign
ownership was "quite simple" and provided far more details about
proposed subsidies for regional routes.
The draft proposal calls for subsidies of about 1.2 million
reais ($380,000) per route between select cities in
less-populated northern states covering the Amazon rainforest,
according to the report.
The measure would subsidize up to 60 seats per flight, Valor
reported, giving Embraer regional jets with about 70 seats an
economic advantage over larger planes from global heavyweights
Boeing Co and Airbus Group SE.
Valor also reported a proposed investment of 300 million
reais in 58 regional airports this year, down sharply from 7.2
billion reais in a plan announced by Rousseff in 2012 that got
($1 = 3.17 reais)
(Writing by Ana Mano; Editing by Brad Haynes and Lisa Von Ahn)