Brazil’s aviation industry is set to receive a much-needed financial lifeline as the Chamber of Deputies has approved a significant amendment to the National Civil Aviation Fund (FNAC) law. This amendment unlocks a BRL 5 billion (USD 888 million) credit facility aimed at bolstering the nation’s struggling airlines.
The approved proposal will empower the FNAC to serve as a guarantor for loans needed by airlines. This financial support is anticipated to come primarily from Brazil’s development bank, BNDES, and could also be directed towards innovative initiatives, such as funding renewable aviation fuel production projects within the country.
This rescue package arrives at a critical juncture for Brazilian airlines, which have been navigating severe financial headwinds in recent years. Both LATAM Airlines Group and GOL Linhas Aéreas have sought Chapter 11 bankruptcy protection in 2020 and 2024, respectively. Azul Linhas Aéreas Brasileiras, another major carrier experiencing financial strain, is currently in discussions with stakeholders to improve its financial stability, with a possible Chapter 11 filing still under consideration.
The approved bill signifies a substantial step towards stabilizing Brazil’s aviation sector. This financial injection is expected to provide much-needed liquidity for the carriers, supporting their operations and bolstering the broader national tourism industry. The move signifies a proactive approach by the Brazilian government to address the challenges facing its aviation sector and ensure its continued role in driving economic growth.
