In order to facilitate the participation of foreign capital in civil aviation, the government has decided to abandon its proposal to transform the Brazilian Tourist Board “Embratur” into a tourism agency. The government is in a hurry to overturn the restriction on the share of foreign capital in airlines, currently limited to 20%. The idea is to stimulate the arrival of low cost airlines to the country.

“The priority is to overturn the limitation on foreign capital. The Embratur proposal is not satisfactory as it is because it takes money from System S (social services) in addition to other controversial themes,” said a Planalto spokesman.

Sent by the Executive to the National Congress a year ago, the proposal has not advanced through the committees and is still awaiting approval despite a request for urgency. In addition, two other projects were annexed to this proposal: one dealing with the national tourism policy authorizing the operation of casinos in resorts, and another which provides for a progressive increase of foreign capital in civil aviation from 20% to 49% to 100%, depending on the authorization of the antitrust authorities.

In the original proposal, the share of foreign capital in the air sector could reach 100%. An alternative proposal could be an application already submitted by Mr Alberto Fraga (DEM-DF), which removes from the need for authorization from consumer protection bodies to increased foreign participation. However, that would entail shelving the transformation of Embratur into a tourism agency.