Brazilian president Jair Bolsonaro has signed a bill into law allowing foreign airlines to operate domestic flights in Latin America's largest air market in a move that could usher in new competition or lead foreign carriers to buy up the local players.
The bill had started as an executive order issued by former president Michel Temer in the last days of his tenure in late 2018. Brazil's Congress made the measure permanent last month, but included some changes that required a presidential signature.
Bolsonaro signed the bill into law this week, but vetoed a section of the bill that would have banned carriers from charging customers certain baggage fees. The proposed measure had been opposed by the airline industry, as well as by Brazil's antitrust regulator, CADE.
A Market Dominated By Three Carriers
Brazil's domestic air market is dominated by three carriers - Gol Linhas Aereas Inteligentes, LATAM Airlines Group and Azul SA. Together, they control more than 90% of the domestic market.
Concerns About Market Concentration
A financial crisis with airline Avianca Brasil, which has not operated flights in several weeks but was once the country's number four airline, has raised additional concerns about market concentration.
Spain's Globalia, which operates the Air Europa brand, has already expressed interest in operating domestic flights in Brazil.