Tuesday, July 2, 2019
In late May, Congress voted to allow foreign airlines to operate domestic flights. Previously, foreign participation in domestic airlines was limited to 20%, concentrating the market in the hands of a few companies, although Avianca Brasil’s operations have been suspended. President Jair Bolsonaro promulgated the law on June 17 but vetoed a section that would have imposed a free checked baggage allowance.
- Domestic and potentially foreign operators will compete for Avianca Brasil’s assets.
- New fare rises are likely despite promises to the contrary.
- The economic slowdown may exacerbate pressures on domestic operators in the near term at least.