IATA and aviation stakeholders in Brazil are launching an advocacy campaign to ensure lawmakers and government officials understand the importance of airlines to the country’s economy, which has been decimated.

Brazil is in what has been described as a “perfect storm” of political and economic crisis that has affected the Brazilian air transport industry, where domestic capacity has fallen 12% and international 4%, and the wider Latin American airline industry because of Brazil’s size and regional significance.

Brazil’s Central Bank anticipates a negative growth rate of -3.8% for 2016 and the country’s unemployment rate is 11.3%.

Brazil also has one of the most difficult business environments for airlines, with bureaucratic regulation, excessive fees and some of the highest oil prices in the world. These make it hard for Brazilian carriers to compete with foreign rivals that do not operate within the same constraints.

The country’s airlines achieved a significant step forward Dec. 13 when Brazil’s civil aviation authority announced new guidelines that would allow carriers to charge for checked baggage – a standard practice elsewhere. To date, Brazilian airlines are mandated to permit one piece of checked luggage on a domestic flight or two pieces on an international flight at no extra cost. Competitor airlines can charge for bags, giving them ancillary revenue and also creating confusion when a Brazilian passenger connects to a foreign airline that charges for a bag.

It is hoped that the new bag rule will come into effect in March 2017. However, some Brazilian lawmakers have said they will reject it.

IATA regional VP-Americas Peter Cerda told ATW this week that congress might not take the issue to the floor until its new session begins in February. That gives IATA and aviation stakeholders time in January to inform and educate lawmakers about the importance of aviation to national economies. Aviation indirectly supports 1.1 million jobs in Brazil and contributes $32.9 billion to Brazil’s GDP, Cerda points out.

“It’s about giving the industry more flexibility in how to run their business,” Cerda said. “Our campaign will be about letting the industry run as a business so that aviation can reach its full potential and be the driver to getting the country’s economy rolling.”

Another regulatory area where IATA and Brazilian airlines would like to see change is in the country’s highly penalizing conditions for flight delays; carriers are held responsible and fined for all delays, including those caused by outside factors such as ATC congestion or weather.

There has been no movement yet on that issue, but IATA is encouraged by progress it made with the country’s airspace and navigation provider, DECEA, which had intended to hike overflight fees by 37% from the 2016 fourth quarter – with none of the extra revenue going to commercial air transport. However, after hearing from IATA and aviation stakeholders, DECEA has agreed to cut the increase in fees to 4%.

“They came to the table, they heard us and they saw the light,” Cerda said.

The hope is that more officials and lawmakers in the country will similarly come round once they understand the economic importance of airlines and how Brazil is out of synch with common aviation regulatory practices and protocols elsewhere. But Cerda acknowledged any achievements will come through “small, baby steps”.

Beginning next year, IATA will also locate a permanent representative in Brasilia to help communicate aviation needs and potential to government officials.

Karen Walker karen.walker@penton.com