Luggage Shuffle Creates Uncertainty and Alienates Foreigners, says President of Latam in Brazil

04/06/2017 - 15h10

The possibility of increasing the percentage of foreign capital in Brazilian airline companies, a measure that the government is considering once again this year, is like an "aspirin for a patient in the ICU" if structural changes aren´t made in the sector, according to Claudia Sender, President of Latam in Brazil.

Sender says that the reinstatement of payroll taxes and the failure of plans to charge for checked baggage worsen perspectives for an industry that has been operating for 19 months under reduced demand.

Folha - What are the perspectives?
Claudia Sender - We don't see any real return of demand. Our expectation for the year had been that we would be able to make the necessary adjustments to costs to manage to return to sustainability. Part of the adjustment was to have been from baggage.

Folha - What is the impact of this?
Claudia Sender - What would have been positive for the sector, charging for baggage, which would have aligned Brazilian practices with the rest of the world, didn't happen. But the negative part is happening. The reinstatement of payroll taxes should have an impact on the sector of R$400 million (US$ 127 million) in increased costs.

Folha - Does the baggage situation affect airport concessions?
It has an impact on airport operations because when there is a charge for baggage, in general, people check fewer suitcases, but it isn't huge.

Folha - I imagine that there is an impact in legal uncertainty. Everyone thinks about what could happen, because Anac (National Civil Aviation Agency) oversees airport concessions as well.
Claudia Sender - These changes generate uncertainty for the capital that is coming into the country.

Translated by LLOYD HARDER

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