ANAC’s Plans To Review Passengers’ Rights02/02/2016
Brazil’s ‘Agência Nacional de Aviação Civil’ (‘National Civil Aviation Agency’ / ‘ANAC’) intends scheduling a public hearing this month to better understand public opinion on its proposed reforms of air transport regulations. The most polemical of the proposed reforms perhaps center on baggage rights, the level of passenger assistance that airline companies are obliged to provide, and the permitted percentage of foreign interest in a Brazilian airline company.
Considering the turbulent political and economic crisis in Brazil and in an attempt to bring Brazil into line with international standards and practices and create an environment that is more attractive to new companies, ANAC has announced that it intends to reduce airline passenger rights. The ultimate aim of the reforms is to lower the price of both domestic and international ticket prices, thus allowing a wider slice of the population greater access to air travel.
For consumers, one of the more controversial measures proposed by the Agency is the reduction of passengers’ baggage allowance, which are, at present, amongst the highest in the world. Currently, the baggage allowance stands at two pieces weighing up to 23kg each for domestic flights and two pieces weighing up to 32kg each for international flights.
“I don’t know of any other country in the world that guarantees two bags weighing 32 kilos on international transport,” declared Marcelo Guaranys, President of ANAC.
Also in relation to baggage restrictions, ANAC is proposing an increase in the weight of hand-baggage from the current 5kg to 10kg. The theory is that this will allow for the creation of lower fares for passengers travelling only with hand baggage.
“We have seen that, in other countries, baggage flexibility very often leads to a definite reduction in the ticket price,” says Guaranys.
A More Attractive Market
Such a measure would create a more attractive commercial environment for other entrants. However, in order for companies to consider moving into the Brazilian market, the laws governing the percentage of foreign equity permitted in a Brazilian airline company would have to change.
Currently, foreign interest is allowed a maximum of 20% in a Brazilian airline company – a figure the industry considers highly restrictive to the growth of competition in the sector. With the new proposals, ANAC is recommending an increase in this limit, thus greatly increasing the possibility of attracting the participation of foreign capital to the operation of domestic routes.
“This allows greater capitalization amongst the companies and can bring new companies to the country, benefitting the passenger, since it creates more competition and offer,” explained Guaranys.
Such equity-holding alterations coupled with the proposed baggage allowance changes, mean that international airlines may look afresh at the possibilities offered by Brazil’s burgeoning consumer-population, with the consequent effects for the country’s much-needed economic growth.
Another proposal is a revision to ANAC’s current rules covering passenger assistance by airlines in case of flight delay and cancelation, even when in response to factors outside its control, such as bad weather conditions or industrial action by airport staff.
Under the current rules, in the case of a one-hour flight delay, the airline must provide means of communication. If it is a two-hour delay, food must be provided. If the delay reaches four hours, the airline has to provide appropriate accommodation (on the airport premises), or transportation and hotel accommodation for out of town passengers. Besides this, in the event of a four-hour delay, the passenger can choose between being accommodated on another flight or a full refund.
“We need to understand what assistance we feel is suitable so that tickets will not be very expensive and people will continue to travel,” explained Guaranys.
ANAC administrative rules apply without prejudice to passengers seeking legal remedies before Brazilian courts.
Faced with passenger claims involving baggage damages or flight delays, and rescheduling due to missed or cancelled flights, the courts tend to view such eventualities as risks inherent to the air transport industry and adopt the guidelines established in the domestic Consumer Defense Code rather than the Montreal Convention, of which Brazil is a signatory. Brazilian Courts often award passengers the so-called “moral damages” besides actual and/or consequential damages, without observing the limitations of the Montreal Convention.
This has been a constant point of dispute raised by airline companies, one that has negatively influenced the respect with which Brazil is held by the international community of flight operators, and consequently restricted a large amount of possible international investment in the sector.
ANAC has yet to announce the date of the public hearing, but Felsberg Advogados’ Aviation Department is monitoring the issue closely. For more information, contact Isabel Andrade at email@example.com or on +55 (11) 3141-9105.