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AVH - Avianca Holdings SA News Story

$0.88 0.0  0.0%

Last Trade - 08/05/20

Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £2.50bn
Position in Universe th / 6846

UPDATE 1-Brazil Senate clears runway for foreign airlines on domestic routes

Wed 22nd May, 2019 11:31pm
(Recasts with vote in Brazil's Senate, context)
    SAO PAULO, May 22 (Reuters) - Brazil's Senate on Wednesday
passed legislation allowing foreign-controlled airlines to
operate domestic flights, opening up Latin America's largest air
travel market after years of debate. 
    The measure passed Brazil's Senate on Wednesday following
approval by the lower chamber on Tuesday. A change to baggage
fee rules means the bill requires the signature of President
Jair Bolsonaro before becoming law.*:nL2N22X1BC
    The new rules could soon boost competition in Brazil's
increasingly concentrated airline market.
    The country's air travel regulator ANAC granted on Wednesday
its first preliminary permit to a foreign airline to explore
setting up a domestic subsidiary, which went to Spain's Air
Europa. The carrier's interest had been announced on Saturday by
Brazil's infrastructure minister. 
    Lifting restrictions on foreign airline ownership in Brazil
had been on the agenda for years before former President Michel
Temer signed a temporary decree in December, which would have
expired without congressional approval.
    Foreign ownership was previously capped at 20%, but once
signed into law by Bolsonaro it will be lifted permanently to
    That may shake up Brazil's air travel market, which is
dominated by three airlines controlling 92% of the domestic
flights, according to ANAC. 
    Foreign airlines will now be able start domestic operations
in Brazil and global players will be able increase their stakes
in local carriers. Brazil's three largest airlines - Gol Linhas
Aereas Inteligentes  GOLL4.SA , LATAM Airlines Group  LTM.SN 
and Azul SA  AZUL.N  - have already received minority
investments from foreign carriers. 
    Currently, Delta Air Lines Inc  DAL.N  owns 9.4% of Gol, the
leader in domestic flights in Brazil. Qatar Airways owns 10% of
LATAM, Brazil's No. 2 domestic airline, and United Airlines
 UAL.O  owns 8% of third-place Azul.
    Brazil's No. 4 airline, Avianca Brasil, is going through a
bankruptcy reorganization, and is currently selling its most
profitable domestic routes, which could help a foreign player
jumpstart operations in Brazil. 

 (Reporting by Marcelo Rochabrun; 
Editing by Sandra Maler)
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