COVID-19: Brazil offers support for airports, airlines

The Brazilian government is trying to mitigate the effects of the COVID-19 crisis on the country’s aviation sector. 

The week saw President Jair Bolsonaro sign a decree with measures to support airlines and airport operators as the number of flights and passengers has dropped drastically due to the pandemic.  

Under the decree, the government authorized concessionaires to postpone the payment of their monthly fees to December. 

To support the airlines, it extinguished the collection of a US$18 ticket fee for international flights. The measure comes into effect in 2021. 

In addition, the government looks to reduce the number of legal disputes between passengers and airlines. 

"The new rule also seeks to regulate situations that gave rise to lawsuits for moral damages, in the relationship between passengers and airlines, making Brazil a less competitive market for the entry of new airlines," the infrastructure ministry said in a statement. 

AIRPORT ACTIONS

The new rules come as the Bolsonaro administration is worried about the COVID-19 impact on the agenda of airport concessions. 

The government has insisted that there is sufficient appetite among investors to move ahead with the plan of auctioning 22 regional airports in the first quarter of 2021. 

However, the plan is at risk since major airlines operating in Brazil, including LATAM, Gol and Azul, are cutting costs by reducing the number of routes that involve regional airports, mainly for small and medium-size cities.

In an effort to solve this problem, the country’s civil aviation authority, ANAC, authorized companies operating small and private jets – so called air taxis - to sell tickets to a wider range of passengers. 

"ANAC believes the expansion of capacity by air taxi companies is another initiative to support the sector in facing the crisis, in addition to an increase of new regional routes for passengers and professionals who need to travel to cities with air travel restrictions," it said in a statement. 

GRIM FIGURES

Globally, industry-wide revenue passenger-kilometers (RPKs) fell by 86.5% year-on-year in June, compared with a 91.0% contraction in May, according to the International Air Transport Association (IATA). 

"Domestic RPKs flown by carriers in Brazil declined by 84.7% annually - a modest improvement on the 91.1% fall in May,” said IATA. “The country has the second largest number of infections worldwide which has been - along with a large number of airline bankruptcies in the Latin America region - hindering a faster recovery in the country’s domestic air travel so far."