Brazil Allows Foreign Airlines to Fly Domestically

Brazil’s Ministry of Tourism announced that Air Europa Lineas Aereas registered an enterprise based in Brazil, the first time an international carrier has established Brazilian operations. Brazil’s Minister of Tourism Marcelo Alvaro Antonio stated: “It consecrates the opening of the Brazilian market to foreign investment”. Brazil set a target of increasing foreign tourists from 6.6 million to 12 million by 2022 and increasing international tourism revenue from USD 6.5 billion to USD19 billion.

Previous law places a 20% limit on foreign ownership of a Brazilian airline. The new law scraps that ban. Foreign airlines (or any outside investor) can increase their stakes in Brazilian airlines. The law also loosens rules that restrict domestic flights to Brazilian flag carriers. That could quickly lead to “foreign” airlines serving domestic routes.

Gol is currently the largest domestic carrier in Brazil. Delta owns a 9.4% stake in the company. United Airlines own 8% of Azul and Qatar Airways owns 10% of LATAM.