Coronavirus Crisis Spells Disaster for Brazil's Airline Industry, Say Companies

Ministry studies reducing kerosene tax, but there is resistance from the economic team


The entity that represents Brazilian airlines says that the impact of the coronavirus on the aviation sector represents a serious crisis that will require government intervention to mitigate the effects on airline companies.

The president of the Brazilian Association of Airline Companies (Abear), Eduardo Sanovicz, said that any estimate of loss would be premature, but points out that the companies have already adopted measures to reduce costs and routes.

"The crisis is serious mainly because it enters into unprecedented economic aspects. It is bringing the coronavirus together with the clash between oil producers", said Sanovicz in reference to the drop in the price of barrels on the international market.

Ministry studies reducing kerosene tax, but there is resistance from the economic team - Wikimedia Commons

The association, which brings together large national companies, presented the government with a package of proposals to mitigate the drop in demand caused by the spread of the virus.

Abear proposed reducing taxes on things like aviation kerosene, aircraft leasing, the payroll of employees, and the rates for airworthiness and landing.

The government is discussing measures to mitigate the effects of this crisis. After a meeting on Wednesday (11), Minister Tarcísio Gomes de Freitas (Infrastructure) stated that he is looking for solutions for the sector.

One of the first proposals was to taxes on aviation kerosene. Initially, Minister Paulo Guedes (Economy) resisted this plan.

Both companies and industry analysts say that, in addition to the restriction imposed by several countries on international travel, the coronavirus crisis may expand and also affect domestic routes in Brazil.

Translated by Kiratiana Freelon

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