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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.
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