Brazil: Forcing airlines to offer regional flights will harm competition – CADE

Brazil’s Administrative Council of Economic Defense (CADE) has expressed its concern over recent measures promoted by Congress, authorizing foreign airlines to operate within Brazil.

The Department of Economic Studies at the agency has declared that the proposal for airlines to be forced to offer regional flights as a condition for entering the market, as proposed by the amendment to Law MP863 / 2018, could have negative effects for competition.

According to the CADE; the obligation to operate a minimum of 5% of flights on regional and non-international routes in order to operate in the country could reduce foreign investment, since the clause would force these airlines to operate in unattractive markets. In particular, CADE estimates that the measure would have a direct impact on low-cost airlines that have expressed interest in entering the Brazilian market.