In December Brazil advanced a rule to eliminate foreign ownership restrictions on airlines operating inside the country. There had been a 20% cap, and currently Delta owns 9.4% of Gol, Qatar 10% of LATAM, and United 8% of Azul — three airlines that control 92% of the Brazilian market.
The rule was temporary, requiring legislative action followed by the President’s signature. The legislative hurdles were the easy part. The rule is meant to benefit the Boeing-Embraer deal and to attract foreign investment in the nation’s airline sector.
However the nation’s President doesn’t like one part of the legislation: a legally mandated free baggage allowance.
Taking to his YouTube account, President Jair Bolsonaro declared,
How many times have you seen [advertisements], lunch for BRL15 with free fizzy drink. Does anyone actually think the fizzy drink is free?… The baggage is included in the price”. Mr Bolsonaro added: “I’m inclined to veto [the article of the bill which reintroduce the baggage allowance]…
Man checked a can of beer as luggage on a Qantas flight.
Nothing is really free. Requiring free checked bags will mean higher ticket prices. Even though airlines report big money from checked baggage fees that’s really an accounting fiction, moving money out of airfare. There is likely incremental revenue (and higher costs associated with lengthier boarding processes as everyone carries on bags).
He isn’t wrong to take issue with this provision, although it reminds me of U.S. President Bill Clinton a href=”https://www.nytimes.com/1996/02/25/us/clinton-will-advise-schools-on-uniforms.html” target=_blank>promoting school uniforms, the sort of small ball issue normally delegated to a deputy assistant undersecretary.