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Brazilian Government Plans on Increasing Foreign Investments in Airline Industry

03/31/2017 - 11h51

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NICOLA PAMPLONA
FROM RIO

The government is elaborating a proposal that will reduce restrictions concerning foreign investments in Brazilian airline companies. The plan would allow companies to initially sell up to 49% of their shares.

In 2016 the government tried to eliminate the restriction altogether by trying to allow companies to sell up to 100% of their shares, but was forced to back down due to a lack of support in the Senate. Currently, foreign investors are only allowed to hold a 20% stake.

"We are battling, among other things, to attract more investments for airline companies", said the director of the Civil Aviation Secretary, Dario Rais Lopes, during a lecture on Thursday (29). "The 20% limit is suffocating companies", he stated.

According to him, the government is working on a provisional measure that addresses the issue.

One of the strategies involves gradual shifts in the field. In order to overcome adversities, there will be an attempt to avoid the loss of national control over companies at first, limiting foreigners to hold 49% of company shares - a ceiling that had already been proposed by the Dilma Rousseff government.

The aviation sector endorses this stance, but it is met with resistance even by congressmen belonging to the governing coalition who are worried about the loss of sovereignty. "[Allowing foreign investments to flow in] is a global tendency", said Peter Cerda, the IATA (International Air Transport Association). "In Brazil, companies are still controlled by the same families that created them".

Traducido por AZAHARA MARTÍN

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