The aviation sector was one of the hardest hit with the COVID-19 pandemic and the restrictive measures that required social distancing and/or isolation (as applicable).
With a significant drop in demand and cancellation of international flights and reduction in the domestic market and with fear of triggering an unprecedented crisis in the area, which represented 1.9% of GDP, with an impact of 131 billion reais in 2018, besides being fundamental in the transportation of cargo of medicines and medical-hospital equipment, the Federal Government implemented through Provisional Measure the following measures:
(i) for those airport concession contracts signed by the federal government, the fixed and variable contributions due in 2020 may be paid until December 18, 2020.
(ii) the refund term for the purchase of air tickets will be 12 (twelve) months, subject to the rules of the contracted service and to the maintenance of material assistance, under the terms of the current regulations.
(iii) consumers will be exempt from contractual penalties, through the acceptance of credit for use within 12 (twelve) months, counted from the date of the contracted flight.
In addition to the above measures implemented through Provisional Measure No. 925 of March 18, 2020, the Government is looking into:
- Air Navigation Fares: the due dates for March, April, May and June 2020 will be postponed to September, October, November and December, respectively.
- Deferral of airport grants to the end of the year instead of being paid in July.
- Lines of credit from public banks, namely Banco do Brasil, Caixa Econômica Federal and Banco Nacional de Desenvolvimento Econômico e Social (BNDES) for working capital and company financing
- Abolition of slot cancellation from the regularity index calculation for obtaining historic rights by airlines until October 24, 2020.
- Extension, for 120 days, of the renewal of civil aviation qualifications, certificates and licenses.
We emphasize that in the face of the many variables that present themselves day by day in the context of the COVID-19 pandemic and its impacts on the economy, the Government continues to evaluate the many measures for the airline industry and so for now, the measures listed above are still under study.
The Aeronautical Law team at De Luca, Derenusson, Schuttoff Advogados – DDSA is available for further clarifications on the subject.