Provisory Measure 1089 – CBA Reform – Part 1

Por Lucas Bernardes.

Provisory Measure 1089 revoked several articles of the CBA, which are inconsistent with rules already in place. Please find below the main changes:

• Air transportation services no longer require a concession or authorization from the Federal Government as a public service. The new concept of air transportation is : “a regulated economic activity of public interest”.
• ANAC´s mandatory approval of airline´s corporate documents have been revoked.
• The majority of the rules of the CBA dealing with bankruptcy and liquidation of air carriers, as well as the intervention of the federal government in situations of airline´s financial or operational distress, have been revoked.
  • NOTE: The majority of the rules of the CBA had already been derogated after the implementation of the Brazilian Federal law nr. 11.101/2005 – which restructured the judicial reorganization and bankruptcy legal framework in Brazil – so the modifications implemented will not severally affect the way a judicial reorganization or bankruptcy process of an air carrier would be processed.
• ANAC will have a general authorization to regulate scheduled and non-scheduled air transportation services, as long as the applicable bilateral treaties are observed.  Specific definitions and rules applicable to scheduled and non-scheduled air transportation services have been removed from the CBA.
• Mandatory prior approval by the aviation authority of agreements that result in the formation of consortiums, pools, connections, mergers, among others, between airlines have been revoked.  However, such agreements will need to comply with ANAC’s regulations, which ultimately may require the prior approval from the Agency.
• The concept of air transportation agreement has been changed to encompass the remunerated carriage by aircraft of passengers, baggage and cargo.  The reference to the transportation of mail has been removed from this concept.

• The obligation to keep the documents issued for air carriage and related services for the period of five years was revoked.
  • NOTE: Even though the obligation has been removed from the CBA, it is important to note that air carrier’s obligation to keep records involving air transportation and related services continue to exist, under the provisions of other laws, such as the Consumer Defense Code and the Civil Code, among others.
• The law no longer expressly compels air carriers to inform ticket fares but deferred to ANAC the authority to demand such information.  ANAC’s obligation to inspect and publicize such fares has been revoked.

NOTE: The modification carried out authorizes ANAC to regulate in more detail airlines’ obligation to disclose the ticket fares charged from passengers and create exceptions to such obligation if the Agency deems appropriate.  However, the requirement consisting in disclosing fares, currently set forth in ANAC’s regulation, remains in force.

• the definition on which services would constitute ancillary air transportation services has been removed from the CBA – so ANAC will now have more flexibility to regulate these matters.

The Congress will have to ratify this legislation by the end of February (extension for another 60 days may apply), otherwise it will lose its effects. Congress can also modify any of the rules implemented by the Provisory legislation.

This article is for general informational and educational purposes.  It is not intended as and does not constitute legal advice or legal opinions and should not be used as such.  You should not act or rely upon any information provided herein without seeking the advice of a lawyer.