Airline group discusses high costs with Brazil officials

By Gabriel Araujo

SAO PAULO (Reuters) – Airline foyer group IATA met with Brazilian authorities officers this week to debate the excessive prices confronted by carriers within the nation, which they are saying have hindered President Luiz Inacio Lula da Silva’s efforts to convey down airfares.

Demand for air journey in Latin America’s largest financial system has been robust, however airways complain about working prices, similar to excessive kerosene costs and extreme litigation, whereas struggling to extend capability and cope with provide chain points.

The federal government has been eager to seek out methods to make airfares extra reasonably priced as ticket costs hit Brazil’s foremost shopper inflation index.

Measures thus far have included credit score traces to fund engine upkeep plans, and the federal government has beforehand mentioned it was working to construction a fund of as much as 6 billion reais ($1.21 billion) to assist finance carriers.

“We’d like this authorities to help the trade,” IATA’s regional vp for the Americas, Peter Cerda, informed Reuters earlier than assembly Vice President Geraldo Alckmin and different cupboard ministers.

“It’s crucial,” he mentioned, noting that carriers in the USA and Europe have obtained authorities help.

Brazil’s foremost airways have struggled financially in recent times following the COVID pandemic disaster.

LATAM Airways (OTC:) exited chapter in 2022, whereas Gol filed for chapter safety within the U.S. final month. Azul restructured its debt in 2023.

IATA had beforehand urged Brazil’s authorities and oil agency Petrobras to tweak the way in which jet gas is priced within the nation to convey down prices, however the state-run oil firm has resisted the proposal.

Petrobras, which is answerable for many of the nation’s refining exercise, says it has been reducing costs since final yr and the Brazilian market is open without spending a dime competitors.

($1 = 4.9639 reais)