September 15, 2017 / 6:09 PM / a year ago

Brazil approves $100 mln American Airlines hangar in Sao Paulo

BRASILIA, Sept 15 (Reuters) - Brazil’s government has approved a plan by American Airlines Group Inc to build a maintenance center at Sao Paulo’s Guarulhos airport, a $100 million investment that will expand the carrier’s South American operations.

A resolution signed by Transportation Minister Maurício Quintella was published on Friday in the official gazette, approving an agreement between the airline and the firm operating the airport. It allows American to use land at the airport for up to 40 years.

Reuters first reported in March that the U.S. airline planned to set up its first aircraft maintenance center in South America at Sao Paulo’s international airport, where it will build a hangar.

The approval is the latest example of President Michel Temer’s efforts to attract foreign investment to help build road, ports and railways and modernize Brazil’s airports.

Private concessions are now operating the main airports and the government plans to sell shares in public airport operator Infraero through an initial public offering, potentially surrendering control of the agency.

Temer’s government has also discussed ending a rule that restricts foreign ownership of Brazilian airlines to a 20 percent stake.

This week, Brazil’s antitrust agency approved a business agreement between American and LATAM Airlines Group SA, Latin America’s largest airline. The agreement allows American to offer more connections and lower fares in the region, the U.S. airline said. (Reporting by Anthony Boadle, Editing by Rosalba O’Brien)

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