Brazilian authorities to lift foreign ownership cap on airlines
Rainer Uphoff (28May09, 14:01 GMT, 188 words)
Brazil is preparing to raise its current 20% cap on foreign airline ownership to 49% in a process which could become law before the end of this year.
A source from the defence ministry, which is politically responsible for civil aviation in Brazil, says a legislative proposal will be presented to the federal parliament "within a couple of months".
Initial drafts of the proposal have been tentatively accepted by the civil aviation administration, ANAC, and the defence ministry's consultative civil aviation secretary, SAC.
While no final date for the parliamentary hearings has yet been set, the ministry source expects no political resistance to the law.
"[It] allows Brazilian airlines to get better access to international capital while not giving up local control over a strategic sector," he says.
Brazil's airline industry has recently attracted a number of foreign, mainly US-based investors, some of which - such as US investment fund MatlinPatterson's acquisition of VarigLog and Varig - have faced legal problems.
Other recent investments in the sector include US carrier SkyWest's stake in TRIP Linhas Aereas and JetBlue Airways founder David Neeleman's involvement in start-up regional operator Azul.
This is the only way to salvage the Indian aviation industry...the Brazilians have made leaps and bounds in aviation..while the Indian aviation industry sits and collects dust...it needs to be opened up just like IT industry...