(Adds ministry sourcing and comments)
SAO PAULO Jan 12 The Brazilian government is
drafting a decree to allow 100 percent foreign ownership of
local airlines, a Transportation Ministry spokesperson said on
Thursday, a move that could attract investors to a
Newspaper Valor Econômico, citing three unnamed aides to
President Michel Temer, earlier on Thursday reported that the
presidential decree would boost regional aviation with subsidies
favoring smaller planes such as those made by Embraer SA
The regional plan is not necessarily related to the decree,
the ministry spokesperson said, adding that next week the
government could announce investments in several airports.
The foreign ownership decree may be published by the end of
January, according to Valor.
Foreign ownership of Brazilian airlines was the subject of
intense debate last year. Legislative uncertainty left investors
wondering if the government would pass rules to shore up the
industry during Brazil's prolonged recession.
The spokesperson said the text was still being reviewed by
the ministry's legal department, after which it would go to the
chief of staff's office and then to Congress.
Spokespeople for the president and officials of the civil
aviation agency Anac did not return requests for comment.
In March, former President Dilma Rousseff issued a decree
lifting the limit on foreign ownership of airlines from 20
percent to 49 percent. Lawmakers raised that to 100 percent
during a congressional review. Temer in July vetoed the
provision, leaving the original 20 percent limit in place.
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 Lisa Von Ahn and Richard