On June 19, 2019, Provisional Measure 863, dated December 13, 2018 (MP 863/18) was converted into law (No. 13,842/2019), which: (i) modifies art. 181; (ii) revokes clauses I and II of the main section and paragraphs 1, 2, 3 and 4 of article 181; and (iii) repeals arts. 182, 184, 185 and 186, all from the Brazilian Aeronautical Code – Federal Law no. 7.565 of December 19, 1986 (“CBA”).
The changes made to the CBA now authorize the participation of 100% (one hundred percent) of foreign capital in companies providing scheduled and non-scheduled public air transport services. Before the change came into effect, the limit for foreign capital participation in air transport companies was limited to 20% of the voting capital. The measure aims to attract foreign investment to the air passenger transport market in Brazil.
This is stated in the justification to PM 863/18:
“Among the results expected from the opening of the airline industry to foreign capital include increased competition and the deconcentration of the domestic market, an increase in the number of cities and routes served by scheduled air transport, a reduction in the average ticket price, the improvement of managerial techniques and the incorporation of new technologies in the companies’ management process, the diversification of services and products, and better connectivity of the domestic air network with international flights.”
After the due legal procedures, on May 28, 2019, MP 863/18 was forwarded by the Senate, for presidential sanction with changes in the text, in relation to the initial proposal. In effect, a new article was included in the aforementioned legal diploma that would oblige airline companies to offer a minimum baggage allowance per passenger, in the following terms: (i) at least twenty-three kilograms (23 kg) for aircraft above thirty-one (31) seats; (ii) at least eighteen kilograms (18 kg) for aircraft with thirty (30) to twenty-one (21) seats; and (iii) 10 kg (ten kilograms) for aircraft with up to 20 (twenty) seats. However, the aforementioned inclusion was vetoed by the President when the law was sanctioned, and converted into law (13.842/2019) according to the text published in the official gazette on 06/17/2019.
The justification used to justify the veto was that the baggage allowance issue “is a theme alien to the original object of the Provisional Measure, restricted to the participation of foreign capital in Brazilian airlines.
The provisions of Law No. 13,842/2019 took effect on the date of its publication.