The legislative change initially introduced by Provisional Measure No. 863/2018 was confirmed by Congress on the last day of this 120-day period and was then signed into law by President Bolsonaro. It has now been converted into Law No. 13.842/2019, allowing all share capital of Brazilian airlines to be held by foreigners.
In practice, this means that foreign airlines can now establish local subsidiaries, and not just open branches in the country, which will allow them to offer domestic flights.
In addition to commercial considerations regarding the interest of foreign airlines in offering domestic flights in Brazil, the choice between establishing a subsidiary or opening a branch must take into account tax and regulatory consequences, among others.
The new baggage allowance rules were vetoed by President Bolsonaro, leaving regulation of this matter to the National Civil Aviation Agency (ANAC). The veto is subject to Congressional deliberation.
