Recent developments and trends
Recent developments Are there any notable recent developments or trends in the aviation sector in your jurisdiction?
The most relevant development was a binding judgment rendered by the Supreme Court on two suits which had been pending for years: one involving Air France and the other involving Air Canada. Both cases concerned whether the Warsaw Convention and the Montreal Convention 1999 applied in Brazil, or if those conventions were superseded by the Consumer Protection Code.
Specifically, Air France concerned the liability limits for baggage loss, while Air Canada concerned the two-year statute of limitations. On May 25 2017 the Supreme Court found that the international conventions should prevail over the Consumer Protection Code in relation to liability limits for damages, as well as statutes of limitation in light of Article 178 of the Constitution. On the other hand, the Supreme Court found that the liability limits apply to property damages, but not moral damages, because Air France’s appeal did not include moral damages.
The full votes and reports prepared by the judges and partially read by them on May 25 2017 are unavailable, so further comment on the effects of their decision – not only regarding cases involving material damages for baggage loss and statutes of limitation, but also delays and moral damages – is not yet possible.
Court interpretations on the effects of Air France have varied. Some judges think that the conventions should apply to all baggage and cargo cases, while others believe that the effects of the Supreme Court decision are limited to baggage cases. Some judges have not yet communicated their interpretation as the full terms of the Supreme Court decision have not been published. More litigation can be expected until the courts decide that the conventions will be entirely applied.
Also relevant was the improvement of regulations on passenger rights. On December 13 2016 the Brazilian Civil Aviation Agency (ANAC) issued Directive 400/2016, which became effective 90 days later.
Directive 400/2016 is generally intended to apply to regular domestic and international carriage, as well as non-regular flights for which the company offers and sells individual tickets. It regulates the following:
- carriage of passengers;
- material assistance rules; and
- changes to the contract of carriage.
Among the most relevant innovations of this new regulation, it implemented a partial deregulation of the baggage allowance rules, to the extent that ANAC will no longer establish minimum allowances for checked baggage.
There is also a trend towards the liberalisation of foreign investments on local carriers. Currently, at least four-fifths of voting shares of Brazilian airlines must be owned by Brazilian citizens – foreign participation is limited to 20%. Further, Brazilian citizens must be appointed as officers of the carrier. The federal government has opined that limitations on foreign investments should be lifted, to the extent that foreign participation should not be limited at all, thus reaching 100% of the capital of air carriers established in Brazil. To date, no legislation has been passed to change the existing framework on foreign participation, although this is expected to change in the near future.
Domestic law What is the primary domestic legislation governing the aviation industry in your jurisdiction?
The primary legislation governing the aviation industry in Brazil is Federal Law 7.565/85.
International law What international aviation agreements has your jurisdiction concluded?
Brazil is a signatory of the Montreal Convention 1999, which was enacted internally in 2006 under Decree 5.910. Brazil is also a signatory of the following:
- the Warsaw Convention 1929;
- the Hague Convention 1955;
- the Guadalajara Convention 1961;
- the Guatemala Protocol 1971; and
- the Montreal Protocols 1–4 1975.
Brazil has also ratified the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment in Brazil, which was recently promulgated under Decree 8.008 on May 15 2013 (Brazil has lodged declarations under Article 39(1a), (1b) and (4), Article 53 and Article 54(2)). The Brazilian Aeronautical Registry was appointed as the entry point from which creditors request the authorisation code to proceed with the registration before the International Registry.
Brazil is also a signatory of the Chicago Convention on International Civil Aviation, which was promulgated under Decree 21.713 on August 27 1946. It has also signed amendments to Articles 3bis, 45, 48(a), 49(e), 50(a), 56, 61, 83bis and 93bis of this convention.
Other relevant aviation agreements that have been duly ratified by Brazil include:
- the Agreement on Sub-Regional Air Services between Brazil, Argentina, Bolivia, Chile, Paraguay and Uruguay;
- the Convention on the International Recognition of Rights in Aircraft (Geneva Convention);
- the Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface (Rome Convention) and the Montreal Protocol;
- the Convention on Offences and Certain Other Acts Committed on Board Aircraft (Tokyo Convention);
- the Convention for the Suppression of Unlawful Seizure of Aircraft (Hague Convention);
- the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (Montreal Convention) and the Montreal Supplementary Protocol;
- the International Cospas-Sarsat Programme Agreement; and
- the Convention on the Marking of Plastic Explosives for the Purpose of Detection.
Regulatory authorities Which government bodies regulate the aviation industry and what is the extent of their powers?
According to the Constitution, air transport is considered a public service, which may be performed by private entities under concession, to be granted by the federal government, in case of domestic air transport, or authorisation for international and non-scheduled air transport service.
Within the structure of civil aviation, the secretariat of civil aviation holds the highest office and has jurisdiction to:
- develop, coordinate and supervise policies for the development of civil aviation;
- develop and implement the strategic planning of civil aviation;
- develop and approve plans for concession of the exploitation of airport infrastructure; and
- coordinate the entities of the civil aviation system.
The sector is regulated by the Civil Aviation Agency (ANAC), which was created by Law 11.182/05. Its main roles include:
- implementing civil aviation policy;
- regulating and supervising civil aviation;
- representing Brazil before international organisations;
- issuing regulations and promoting the implementation of international standards;
- regulating and supervising the operation of air services by foreign companies;
- regulating the conditions and the appointment of Brazilian airlines to operate abroad;
- granting, permitting or authorising the operation of air services;
- regulating and supervising the concession of air services;
- inspecting aircraft;
- regulating takeoff and landing authorisation;
- granting or authorising the exploitation of airport infrastructure; and
- suppressing violations of the law.
ANAC has no power to grant antitrust immunity to air carriers, so under the perspective of competition matters, the aviation industry is also regulated by the Administrative Council for Economic Defence, which is the Brazilian antitrust agency.
Air carrier operations
Operating authorisation What procedural and documentary requirements must air carriers meet in order to operate in your jurisdiction?
In order to perform domestic scheduled air transport services, a concession from the federal government is required. Authorisation is required for foreign airlines which intend to carry out scheduled international air transport to and from Brazil. Non-scheduled air transport services also require authorisation from the Civil Aviation Agency (ANAC).
In order to render domestic services, companies must first obtain legal authorisation for operations from ANAC, following the requirements of Directive 377/2016. According to the directive, in order to obtain authorisation, companies must:
- obtain ANAC’s prior approval of its corporate documents and register these documents before the Commercial Registry;
- complete the homologation and certification processes according to ANAC’s directives (the Brazilian Rules of Civil Aviation and the Brazilian Rules of Aeronautical Homologation); and
- obtain a concession or authorisation, as applicable according to the service to be rendered. The concession or authorisation is granted only for companies operating airworthy aircraft that are appropriate for the service to be provided.
After issuance of the legal authorisation for operation, an operating certificate must be obtained before the company becomes eligible to enter into a concession agreement.
According to the terms of the relevant bilateral treaty, foreign airlines designated by the government of the country where they are established can be authorised by ANAC to operate in Brazil. After ANAC has issued its authorisation, the airline must submit all documents and the authorisation to the commercial registry of the states where it intends to operate in Brazil and create a local establishment (the Brazilian branch). Registrations with federal, state (depending on the state) and municipal tax authorities are also required.
The approval process also entails submission of the documentation required by local regulations in order to have the local operational specifications issued and to obtain approval of the relevant flight schedule.
Ownership and control Do any nationality or other requirements or restrictions apply to ownership or control of air carriers operating in your jurisdiction?
The Aeronautic Code establishes a limitation for foreign participation in the capital of national airlines. According to Article 180 of the Aeronautic Code, the concession for domestic operations will be granted only to legal entities established in Brazil, in which at least four-fifths of the voting stock belong to Brazilian nationals and provided that all of the company’s officers are Brazilian nationals.
Financial requirements What financial thresholds must air carriers meet to obtain operating authorisation?
No financial thresholds exist, as long as the requirements established by Directive 377/2016 are met.
Insurance coverage What is the required level of insurance coverage for air carrier operations?
Brazilian law requires all aircraft operators to have insurance covering the liability of the operator or airline. This insurance covers all compensation for physical injury or actual damage resulting from aircraft accidents or incidents, up to the limits established by the Aeronautic Code and the international treaties ratified by the Brazilian government.
The following risks may be excluded from coverage:
- losses arising directly or indirectly from acts of hostility, war or related events;
- losses directly or indirectly caused by or resulting from ionising radiation or radioactive contamination from any nuclear fuel resulting from the combustion of nuclear material, as well as due to the use of nuclear weapons;
- losses as a result of wind speeds equal or higher than 60 knots, earthquakes and other convulsions of nature, except when the aircraft is on flight or during maneuver;
- loss of profits and consequential damages directly or indirectly resulting from the non-operation of the relevant aircraft; and
- moral and aesthetic damage.
According to Law 10.744 of October 9 2003, in case of acts of war, terrorism and related events, the government must pay any damages arising from these events on behalf of Brazilian airlines. This responsibility will cover only bodily injuries, diseases, deaths or disablements, and will be limited to the amount of $1 billion. This law applies only for scheduled air transport services, thus air taxi companies and companies rendering specialised air services must retain a special insurance for this kind of coverage.
Safety requirements What safety requirements apply to air carrier operations, including with regard to professional and technical certifications?
There are a number of rules regarding safety, not only in the Aeronautic Code, but also in regulations issued by ANAC and the Ministry of Defence.
ANAC Directive 121 regulates several requirements to be met by Brazilian-based companies that are certified to perform scheduled air transport services. Among several other aspects, this rule establishes:
- requirements for operation on certain routes;
- communication capabilities;
- minimum requirements for ground handling;
- minimum requirements for aircraft maintenance;
- maintenance programmes;
- limitations for aircraft operations;
- aircraft configuration requirements (with mention to several mandatory emergency and safety equipment);
- training and training programmes;
- qualification standards; and
- licences required for crew, mechanics and flight dispatchers.
Directive 135 establishes similar rules applicable to companies that perform charter flights, air taxi companies and companies that render specialised air services.
Specifically, Supplementary Instruction 120-001 provides for several procedures associated with aircraft maintenance which must be followed by both companies regulated by Directives 121 and 135. Aeronautical Command System Regulation 3-3 of the Aeronautics Command also regulates proceedings and implementation of safety standards for prevention of accidents. Other aeronautical rules on safety and security apply to operators and companies in the infrastructure sector, which are issued according to the International Civil Aviation Organisation Safety Oversight System.
Accident and incident investigation is regulated by Aeronautical Command System Regulation 3-13/2013. According to this rule, the Centre of Investigation and Prevention of Aeronautic Accidents (CENIPA) – a department under the authority of the Ministry of Defence through the Aeronautics Command – is responsible for carrying out any investigation involving aircraft accidents or incidents. This rule sets out that all aircraft operators must communicate incidents and accidents. Currently, communications are made by means of an online system available through CENIPA’s website.
Environmental obligations What environmental obligations apply to air carrier operations?
Air carriers in Brazil are not subject to a large number of environmental obligations. Relevant matters such as environmental licensing, treatment of solid waste and aircraft noise mostly fall under the purview of airport operators. Despite this, it is worth highlighting environmental-related aspects that affect air carrier operations.
According to Directive 2/2003 from the Health Surveillance Agency, among other obligations, air carriers are responsible for packing and removing solid waste from the aircraft in accordance with the airport operator’s solid waste management plan.
Another obligation is established in Law 6.938/81. According to this law, the transport of dangerous goods is one of the activities considered to be a potentially polluting or natural resources consuming activity and, as a result, the Brazilian Institute of the Environment and Renewable Natural Resources determined that air carriers that perform this kind of service must be registered before the Federal Technical Registry of Potentially Pollutant Activities and provide annual reports of any dangerous goods transported.
Air traffic control How are air traffic control services regulated in your jurisdiction?
Air traffic control services are performed by the Department of Airspace Control (a military agency) subject of the payment of tariffs according to international criteria.
Routes Do any licensing requirements apply to specific routes?
Are any public service obligations in place with respect to remote destinations?
In 2014 the government initiated discussions on regional aviation. The discussions included investment in remote airports and subsidies for new flights to remote destinations. In 2015 Law 13.097 was issued establishing certain rules to enhance regional aviation. However, until now, the additional regulation of this law has not been issued. Consequently, relevant changes regarding remote destinations remain unseen.
Charter services Do any special provisions apply to charter services?
There are three directives establishing how a charter service request should be filed with ANAC. However, since these directives date back as far as 1993, some requirements are obsolete and need not be observed. In Brazil, the rules for the approval of flights are all old and for this reason ANAC has issued a new directive (Directive 440/2017), which will become fully effective in 2018.
Taxes What taxes apply to the provision of air carrier services?
Foreign carriers are generally exempted from taxes levied on income generated from air carriage services in Brazil, subject to reciprocity and signature of international treaties to avoid double taxation.
Brazilian carriers are normally taxed under federal income tax regulations and state tax rules.
Consumer protection and liability
Airfares Are airfares regulated in your jurisdiction?
According to Law 11.182/2005, air fares are not regulated.
Passenger protection What rules and liabilities are air carriers subject to in respect of:
(a) Flight delays and cancellations?
In case of flight delays, air carriers will promptly notify the passengers about the delay and the expected time of departure, using the communication means available. Air carriers will update passengers about the estimated departure time every 30 minutes. Written information about the delay must be provided if requested by passengers.
If the flight is delayed for more than four hours, or if the flight is cancelled or a passenger is unable to board a connecting flight because of the delay, air carriers must offer the following alternatives:
- boarding another flight;
- reimbursement of the fare effectively paid, including taxes and airport fees; or
- completion of the transport through other transport modes.
Passenger transfers in flight delay and cancellation scenarios are free and have priority over carriage of passengers who acquired tickets for the same flight at a later time. Re-accommodation is offered to passengers, who may choose one of either a seat in the first available flight of the air carrier or a flight operated by a third party to the same destination; or a seat in a flight of the air carrier at a date and time chosen by the passenger.
Passengers with special needs have priority when seats on other flights are being allocated. If an air carrier can anticipate a delay of more than four hours, it must promptly inform the flight’s passengers about these alternatives.
In case of flight delays and cancellations, material assistance must be offered as follows:
- Exceeding one hour: access to means of communication.
- Exceeding two hours: a meal compatible with the time of day, or a meal voucher.
- Exceeding four hours: hotel accommodation if there is an overnight wait and ground transfers when necessary, provided that passengers do not reside in the city of departure (in which case the air carrier is not required to offer accommodation, only ground transfers). Accommodation must be offered to passengers with special needs and their companions regardless of the overnight waiting period.
Material assistance must be provided until the moment the passenger chooses to be placed on another flight at a date and time of their choosing, at their own discretion or if they opt for reimbursement.
(b) Oversold flights?
An oversold or overbooked flight will have consequences for the air carrier if this action results in denied boarding. In this scenario the rules identified under the denied boarding section below will apply.
(c) Denied boarding?
Air carriers must compensate passengers who accept seats on other flights in order to avoid denied boarding. Further, in case of denied boarding, air carriers must offer the same alternatives applicable to flight delays of more than four hours.
Where passengers do not voluntarily accept compensation, in addition to offering alternatives and the obligation to provide material assistance, air carriers must immediately pay an indemnification to the passenger whose boarding was denied in the amount corresponding to 250 special drawing rights (SDR) for domestic flights and 500 SDR for international flights. This payment is made through bank transfer, in cash or in the form of a voucher.
(d) Access for disabled passengers?
Directive 280 was issued by the Civil Aviation Agency (ANAC) in 2013 with the purpose of regulating the service of passengers with special needs. According to this directive, passengers with special needs include:
- persons aged 60 and above;
- pregnant and lactating women;
- persons accompanied by an infant;
- persons with reduced mobility; or
- anyone for whom a specific condition limits their autonomy as a passenger.
(e) Lost, damaged or destroyed luggage?
In case of baggage loss, passengers will immediately formalise a claim addressed to the air carrier. Air carriers will return the baggage within seven days for domestic flights and 21 days for international flights. On expiration of such terms, air carriers must indemnify passengers for the loss.
Further, in baggage loss situations, the air carrier must reimburse the expenses of passengers who are outside of their city of residency. Reimbursement must be carried out within seven days as of the date on which the receipts are presented to the air carrier. The contract of carriage regulates the daily limits for reimbursement and applicable payment methods.
If the baggage is not found:
- the amounts previously paid as reimbursement of expenses can be offset with the amount of indemnification owed to the passenger; and
- the air carrier must reimburse the passenger for additional amounts paid for the transport of the baggage.
Air carriers may offer credits or vouchers as compensation, which can be accepted at the passenger’s discretion.
Where baggage has been damaged or mishandled, passengers must file a complaint within seven days. In the following seven days the air carrier must do one of the following:
- pay a compensation;
- replace the damaged item with one that is identical; or
- repair the damage (if possible).
Damage to fragile items may not be indemnified by the air carrier, depending on what is established in the contract of carriage.
(f) Retention and protection of passenger data?
In 2012 ANAC published Directive 255 in order to prevent and suppress acts of unlawful interference and facilitate clearance before the immigration, customs, sanitary and agricultural authorities. Under this directive, air carriers must collect information on passengers and crew and forward this information to the relevant authorities in advance to the departure of the flight.
Cargo What rules and liabilities apply to the air carriage of cargo?
Brazil is a signatory to the Convention for the Unification of Certain Rules for International Carriage by Air 1999 (the Montreal Convention), which was enacted internally in 2006 under Decree 5.910. The country is also a signatory of the following:
- the Warsaw Convention 1929;
- the Hague Convention 1955;
- the Guadalajara Convention 1961;
- the Guatemala Protocol 1971; and
- the Montreal Protocols 1–4 1975.
The Aeronautical Code (Law 7.565/86) regulates liability on air transport in domestic flights. In brief, this legislation has provisions that are similar to those established in the relevant international conventions, especially regarding limitation of liability. The Aeronautical Code sets out that in case of baggage loss and flight delays, airlines’ liability will be limited to an amount corresponding to 150 national treasury bonds, which corresponds to R1,755. In case of passenger death or injury, the Aeronautical Code sets out that airlines’ liability will be limited to 3,500 national treasury bonds, which corresponds to R40,950 (these calculations are based on ANAC Directive 37/2008).
Brazilian courts are inclined to deny enforceability to certain provisions of the Montreal Convention, especially those that deal with liability caps and the time bar for filing suits against carriers.
Precisely because there has been a great debate on whether the conventions apply, the Supreme Court accepted a baggage case in which Air France had been sued by a passenger. The lower court’s judgment denied compensation according to the limits of the Warsaw Convention (at the time the relevant facts took place, the Montreal Convention was not effective in Brazil) and awarded a higher compensation based on the Consumer Protection Code. Likewise, the Supreme Court accepted a suit filed by a passenger against Air Canada. The company defended the claim on the grounds of the statute of limitations having expired (since the suit has been filed more than two years after the relevant flight). In both cases the Supreme Court rendered a final judgment with binding effects on all lower courts of the country upholding the international treaty.
Although this decision has been rendered on passenger claims, not cargo, it is possible to conclude that its principles will also apply to liability regarding transportation of cargo.
Marketing and advertising Do any special rules apply to the marketing and advertising of aviation services?
No. All kinds of advertising and marketing in Brazil are regulated by Federal Law 4.680/65, Decree 57.690/66 and the Brazilian Advertising Self-Regulation Code. The latter was issued by the National Council of Advertising Self-Regulation.
Complaints handling Do any special rules apply to consumer complaints handling in the aviation industry?
A recent Supreme Court judgment will directly affect how consumer complaints are handled. As a result of the decision, the Montreal Convention will be used by courts more often instead of the Consumer Protection Code, which is adopted in most cases. This modification will directly affect how complaints are handled, mainly considering the indemnity limitations and the statute of limitation rules established by the conventions.
Aircraft register What are the requirements for entry in the domestic aircraft register?
All aircraft which have Brazil as the base of operations must be properly registered and observe the requirements of Civil Aviation Agency (ANAC) Directive 293/2013. Aircraft registration in Brazil must be carried out before the Brazilian Aeronautical Registry (RAB), a specific department within ANAC responsible for this matter. Aircraft ownership will become effective only on registration with the RAB.
Mortgages and encumbrances Is there a domestic register for aircraft mortgages, encumbrances and other interests? If so, what are the requirements and legal effects of registration?
Yes. The RAB also handles the registration of mortgages, encumbrances and other interest relating to aircraft. In order to register any of these interests, the agreement that created the interest must be properly registered with the Documents Registry Office (Law 6.015/73) and with the RAB (ANAC Directive 293/2013). Mortgages, encumbrances and other interests will become effective and enforceable against third parties on proper registration with the RAB.
Brazil has also ratified the Cape Town Convention, which was recently promulgated under Decree 8.008 of May 15 2013 (Brazil has lodged declarations under Article 39(1a), (1b) and 4, Article 53 and Article 54(2). The RAB was appointed as the entry point from which the creditor requests the authorisation code to proceed with the registration before the International Registry.
Detention What rules and procedures govern the detention of aircraft?
The detention of aircraft in Brazil may arise for different reasons:
- Aircraft may be detained as a penalty for certain infractions of the Aeronautical Code.
- The Brazilian Internal Revenue Service may seize aircraft following irregularities during importation.
- If the aircraft is used to commit a crime or was acquired as a result of a crime detention may be ordered.
- The Brazilian aircraft investigation board can detain aircraft if necessary for carrying out an investigation regarding aircraft accidents.
Safety and maintenance What rules and procedures govern aircraft safety and maintenance?
The Brazilian Rule on Civil Aviation 121 regulates several requirements that must be met by Brazilian-based companies that are certified to perform scheduled air carriage services. Among several other aspects, this rule establishes:
- requirements for operation on certain routes;
- communication capabilities;
- minimum requirements for ground handling;
- minimum requirements for aircraft maintenance;
- training programmes; and
- qualification standards and licences required for crew.
The Brazilian Rule on Civil Aviation 135 establishes similar rules applicable to companies that perform charter flights, air taxi companies and companies that render specialised air services.
Specifically, Supplementary Instruction 120-001 provides for several procedures associated with aircraft maintenance which must be followed by both companies regulated by the Brazilian Rule on Civil Aviation121 and the Brazilian Rule on Civil Aviation 135. Aeronautical Command System Regulation 3-3 from the Aeronautics Command also regulates proceedings and the implementation of safety standards to prevent accidents. Additional aeronautical rules on safety and security apply to operators and companies in the infrastructure sector, which are issued according to the International Civil Aviation Organisation’s safety oversight system.
Drones What is the state of regulation on unmanned aerial vehicles (drones) in your jurisdiction?
Drone operations in Brazil began to be regulated in late 2016. Existing drone operations are regulated by ANAC (Brazilian Rule on Special Civil Aviation 94/2017) and the Department of Airspace Control (ICA 100-40/2014). The commercialisation of any drone in the Brazilian market requires the previous homologation of the product with the National Telecommunications Agency.
Investigation How are air accidents investigated in your jurisdiction?
Accident investigation is regulated by Aeronautical Command System Regulation 3-13/2013. According to the regulation, the Centre of Investigation and Prevention of Aeronautic Accidents (CENIPA) – a department in the Aeronautics Command branch of the Ministry of Defence – is responsible for carrying out any investigation involving aircraft accidents, without prejudice to other authorities jurisdictions. Importantly, as provided in the Aeronautical Code (Aeronautical Command System Regulation 3-13) and Annex 13 of the Convention on International Civil Aviation, CENIPA investigations do not seek to attribute fault or liability to those involved in accidents.
Liability What liability regime governs death, injury and loss arising from air accidents?
When an accident occurs while the operator is performing air transportation services during revenue flights, causing injury to passengers considered end users of the service, the Consumer Protection Code will apply to litigation involving not only passengers and their families, but also third parties on the ground who would be considered bystanders and therefore entitled to benefit from the provisions of this legislation, without even having used the relevant service. Among others, the following rules will apply under the Consumer Protection Code:
- the air carrier will undertake strict liability for the damages;
- the judge may reverse the burden of proof and place it on the defendant; and
- the time bar for filing suits will be extended to five years from the date of the incident (as opposed to two years as set out in the Montreal Convention and the Aeronautical Code).
In these cases, any party may be brought into procedures seeking compensation, provided that such party may have contributed to the accident, which includes:
- air carriers, which would normally undertake strict liability under the Consumer Protection Code;
- the manufacturer of the aircraft involved if the accident potentially resulted from a defect of the product or the project; and
- the manufacturers of the components that could somehow have contributed to the accident.
Depending on the circumstances, pilots can be liable if their actions or omissions contributed to the accident, as well as air traffic control operators, airport operators and anyone whose actions or inactions could have contributed to the incident or the accident. Defendants are usually found jointly and severally liable for the damages awarded, so the court does not allocate liability according to levels of fault or participation of each defendant to protect plaintiffs. Actions for recovering damages paid can be subsequently filed by the parties that paid compensation, where the level of fault may be discussed.
Regulatory notification What are the reporting requirements for air accidents?
CENIPA’s Aeronautical Command System Regulation 3-13 establishes that all aircraft operators must communicate incidents and accidents. Currently, communications are made by means of an online system available through CENIPA´s website. In case the report is not provided, the Aeronautic Code provides for the assessment of a penalty of up to R4,000.
Ownership What rules govern the ownership of airports (both public and private)?
According to the Aeronautic Code, airports can be classified as civil or military (Article 28). Civil airports may be used for public or private purposes (Article 29). Civil airports used for private purposes must be built, maintained and operated exclusively by their private owners (Article 35). Article 36 sets out that civil airports used for public purposes may be built, maintained and operated by:
- the government;
- specialised public companies;
- states and municipalities; or
- private companies through a concession or authorisation process.
Operation What is the authorisation procedure for the operation of airports?
According to the Aeronautic Code, the construction of any airport must have prior approval from the Brazilian Civil Aviation Agency (ANAC). For civil airports used for private purposes, after the approval and once the construction process is completed, an authorisation to operate must be obtained from ANAC.
If the civil airport will be used for public services, the authorisation procedure for the operation is more complex due to the public interest in the airport. The process is called ‘homologation’ and a specific rule from ANAC regulates this process (Brazilian Rules of Civil Aviation 139).
What ongoing operating requirements apply (including obligations relating to safety, security and facilities maintenance)?
Airport operations entail the issuance of several technical documents certifying that operations will be conducted in an adequate manner. Airport operators should therefore have the following:
- the Airport Operation Guide (Brazilian Rules of Civil Aviation 139);
- the Airport Protection Zone Guide;
- the Noise Zoning Plan;
- the Heliport Protection Zone Guide;
- the Protection Zone Guide; and
- the Air Navigation Aid Guide (Aeronautic Code).
Further, the Brazilian Rules of Civil Aviation 107 issued by ANAC requires issuance of several plans in order to ensure the safety of civil aviation against acts of unlawful interference. The Brazilian Rules of Civil Aviation 153 applies to the operation, maintenance and emergency responses at airports. As a result of the risks associated with bird strikes, ANAC has also issued the Brazilian Rules of Civil Aviation 156 covering rules for wildlife risk management at airports.
Airport charges What airport charges apply and how are they regulated?
Airport charges in Brazil were all created and regulated by Law 6.009/73. Currently, the following fees are charged:
- boarding fees;
- connecting flight fees;
- landing fees;
- parking fees;
- warehousing fees; and
- wharfage fees.
In addition to these fees, Law 6.009/73 establishes three other fees due as a result of the use of facilities and services which support and secure air navigation.
Access What regulations govern access to airports?
Access to airports is regulated by the Brazilian Rules of Civil Aviation 183, issued by ANAC in 2011.
Slot allocation What regime governs the allocation of airport slots (including slot transfer, revocation and disputes)?
ANAC Directive 338/2014 applies to the allocation of slots in coordinated airports. Generally, the regulation follows the standards suggested by the International Air Transport Association (IATA) Worldwide Slot Guidelines, but has certain peculiarities, such as the inclusion of punctuality as one of the factors that could influence historical calculation.
Ground handling How are ground handling services regulated?
According to Brazilian legislation, ground handling is classified as an ancillary service. Until 2009 the establishment of any company to render ancillary services required prior approval by the Aeronautic Authority. With the issuance of Directive 116/2009, ANAC revoked this restriction and transferred to the airport authorities the obligation to control which service providers will be authorised to provide any kind of ancillary service. Air carriers in Brazil normally use the IATA Standard Ground Handling Agreement to establish all obligations and conditions for the rendering of ground handling services.
Governing regime Do any sector-specific competition regulatory/legal provisions apply to the aviation industry in your jurisdiction?
No. Competition matters in Brazil in all economic sectors are regulated by the Administrative Council for Economic Defence), according to the rules of Law 12.529/2011.
Code sharing and joint ventures What (if any) competition concerns arise in relation to code sharing and air carrier joint ventures?
Code shares and joint ventures usually do not raise competition concerns unless the agreement involves two air carriers with a high market share, which is evaluated depending on the number of overlapping routes or applicable commercial conditions (eg, joint price fixing). Generally, if the agreement is between air carriers with a high market share or it contains sensitive commercial conditions, the antitrust authority may deny the effectiveness of the agreement or impose certain restrictions (eg, the return of slots for a determined route).
State aid What rules govern state aid in the aviation industry? Do any exemptions apply?
Brazil does not adopt state aid rules for the aviation industry. However, this matter is the subject of several discussions in the World Trade Organisation after competitors of the Brazilian manufacturer Embraer received subsidies.
In 2015 Law 13.097 was issued establishing some rules to enhance regional aviation, including economic subsidies. However, until now, the required additional regulation of this law has not been issued.
In addition to this law, the government has recently been discussing the possibility of reducing the percentage of the state-level value added tax calculated over the price of the aviation fuel. However, nothing has officially been published authorising this reduction. Currently, in order to enhance the number of flights to the Amazon region, Acre, Amazonas, Amapa, Para, Rondonia and Roraima are authorised to grant discounts of state-level value added tax, according to the National Council of Finance Policy Agreement 73/2016.
Notable cases Have there been any notable recent cases or rulings involving competition in the aviation industry?
Yes. Recently the antitrust authority concluded the analysis of a joint business agreement between LATAM Airlines, Iberia and British Airways. As a result of the high concentration of market share in the Sao Paulo-London route, the antitrust authority approved the operation, but imposed restrictions, including that air carriers must make available slots in the route for any third carrier that intends to start operating this route.
Further, the antitrust authority concluded the analysis of a joint business agreement between LATAM Airlines and American Airlines for the Brazil-US market. Despite the high market share in the routes affected by this agreement, the antitrust authority approved the operation without restrictions.
Disputes What aviation-related disputes typically arise in your jurisdiction and how are they usually resolved?
Aviation-related disputes can be categorised as follows:
- injury or death resulting from aircraft accidents or incidents;
- suits for recovery of damages on cargo carriage; and
- suits filed by passengers claiming compensation for flight delays or baggage loss or delay.
There is a trend towards resolving disputes by mediation. Plaintiffs and defendants are voluntarily accepting mediation in accident cases in order to resolve the dispute quickly and avoiding lengthy litigation. In the last major aircraft accident in Brazil, a mediation chamber was created to encourage settlements. The airline, insurers, consumer protection agencies and the district public attorneys’ office all participated to assure transparency and protect the victim’s rights.
In passenger claims the majority of plaintiffs file suit before small claims courts where it is generally possible to claim up to as much as 40 times the national minimum wage. Given the high number of suits filed by passengers in Brazilian courts, airlines tend to adopt pro-settlement approaches in order to settle as many cases as possible and within reasonable parameters.
Cargo litigation normally follows the regular process. Plaintiffs are normally insurers of the consignees filing suit as subrogated parties.