Draft bill threatens national airlines and causes "turbulence" in the skies over the Amazon.

Without fanfare, the Chamber of Deputies approved Bill 539/2024, authored by federal deputy Coronel Ulysses (União Brasil-AC) and deputy Cristiane Lopes (União Brasil-RO), which authorizes South American airlines to offer domestic flights within the Legal Amazon region. The proposal now goes to the Senate for consideration.

The initiative has two objectives. One is to stimulate competition among airlines to reduce the extremely high cost of airfare in the Legal Amazon, which encompasses Mato Grosso, part of Maranhão, and the entire Northern Region of Brazil. To give you an idea, airfare in the states of Roraima and Rondônia costs twice the national average.

Another objective, indirectly, is to expand the number of lines serving the Amazon region, including neighboring states. Although the Northern Region represents 45% of the national territory, it holds less than 25% of the country's active connection points.

The Ministry of Ports and Airports (MPor) has shown itself to be in favor of the bill. However, the bill has been received with caution by industry experts because it sets a precedent considered dangerous and nonexistent in other countries – that of dispensing with a rule that keeps domestic routes limited to national airlines.

The proposed law foresees a change to the Brazilian Aeronautical Code (CBA), specifically article 216, which states that "domestic air transport services are reserved for legal entities constituted under Brazilian law, with headquarters and administration in the country." However, nothing would prevent a complementary law from extending to international airlines the possibility of operating domestic routes in other regions besides the Amazon.

To make the picture even more murky, another bill – PL 1.600/2025, currently being processed in the Senate – also aimed at increasing the supply of flights and reducing ticket prices to the Northern Region, provides for the creation of the NorteAR Program, an economic subsidy plan for regional flights in the seven states of Northern Brazil.

The program authorizes the Union to use resources from the National Civil Aviation Fund (FNAC) to directly subsidize airlines operating regional routes. In exchange for the benefit, the companies are required to offer tickets at more affordable prices to the population.

Experts consulted by NeoFeed state that the possibility of both bills being approved would create a significant legal uncertainty for the major national airlines operating in the country – Gol , Azul , and Latam – in addition to representing an intervention in the commercial aviation market.

“If there were a profitable market for more flights in the Northern Region, Brazilian airlines — which have freedom of route and fare selection — would already be operating more intensively,” says Ricardo Fenelon Jr., former director of ANAC (the regulatory agency for the aviation sector) and partner at the law firm Felanon Barretto Rost Advogados.

According to him, the absence of operations by national airlines in the Amazon indicates that the demand is not economically viable. "Therefore, it would be surprising if foreign companies opted for routes considered unprofitable by national companies, which know the market," he adds.

Paradox

The justification for the bill approved by the Chamber highlights the harsh reality faced by residents of the benefited area, especially in Acre, Amapá, Amazonas, Pará, Rondônia, Roraima, and Tocantins.

Currently, to travel between neighboring states in the Amazon region, passengers are often forced to make connections in São Paulo or Brasília, resulting in expensive, time-consuming flights with inconvenient schedules, often in the early morning hours.

In practice, a paradox prevails for passengers in this region: the closer the destination, the more expensive the ticket. An air trip between Porto Velho (RO) and Boa Vista (RR), a distance of 1,500 km, can cost R$ 7,000 or more. In contrast, if the same passenger buys a round-trip ticket for the Porto Velho-New York route, they will pay R$ 4,700 for a distance of 5,000 km.

Of the ten Brazilian states with the highest average airfare cost, nine are in the North Region. In 2025, Espírito Santo consolidated its position as the state with the lowest average domestic airfare in the country, at R$ 532.29. Passengers in Roraima, the worst-ranked state, spent an average of R$ 1,410 on a plane trip.

Experts identify four factors to explain this discrepancy in airfare prices and the limited availability of travel in the Amazon region. The first is the combination of low demand and high yield (revenue per passenger per kilometer). In the North, few cities have a large volume of passengers, which makes less popular routes more expensive.

Another factor is the difference between domestic and international logic. International flights use aggressive Revenue Management strategies, involving airlines, hotels, transportation companies, and other sectors that deal with variable demand, offering promotions to fill aircraft for long distances – which explains why the Porto Velho-New York trip is cheaper than the Porto Velho-Boa Vista trip.

The third component of this combination is aviation fuel. In states like Roraima, Rondônia, and Amazonas, fuel prices are 12% above the national average, which puts pressure on costs—but doesn't alone explain such high prices.

Finally, there is the lack of competition. Brazil has only three major airlines, and factors such as litigation and regulatory instability discourage new entrants. On the other hand, they fuel the arguments of those who advocate for coastal air transport in the Amazon.

The Ministry of Planning, incidentally, has always defended the approval of Bill 539/2024, which has just passed in the Chamber of Deputies. In a statement to NeoFeed , the Ministry notes that "the measure helps to make the market more open and brings Brazil closer to a more integrated and competitive environment, in addition to signaling space for new operating models in the sector."

For the Ministry of Planning, the Chamber's approval of air cabotage can be seen as a positive step and is aligned with the Connect Agenda – a joint initiative with the Ministry of Development, Industry, Trade and Services (MDIC) that aims to modernize and strengthen Brazilian civil aviation, expanding the integration of air transport with the national economy.

Among the planned initiatives are the reduction of structural costs in the sector, such as aviation kerosene, stimulation of competition and operational efficiency, expansion of the air network, increasing the number of locations served, and improvement of the regulatory environment, reducing obstacles and uncertainty.

With the exception of the last point, all the initiatives mentioned are covered by the bill. “At the same time, it is important to make it clear that the impact of this change with the approval of the bill is limited and depends on other actions to materialize,” the MPor note continues. “Therefore, other aspects of the Connect Agenda gain importance, such as strengthening legal and regulatory security and reducing costs, essential points for the growth of air transport in the country.”

NeoFeed reached out to the Brazilian Association of Airline Companies (Abear) for its reaction to the two bills in Congress. "Abear does not have a position on the matter," the organization responded in a statement. The National Union of Aeronauts (SNA), also contacted, did not respond to the interview request.

Regulatory obstacles

The legal and regulatory obstacles stemming from the bill, incidentally, are cited by experts as the biggest knot to be untied.

“The diagnosis is clear: the Chamber's bill is a superficial solution to a deeply structural problem,” warns Ana Luisa Derenusson, an expert in the aviation sector and partner at the law firm DDSA Advogados.

“The real, and widely recognized, risk is that this 'regional exception' will become a gateway to unrestricted liberalization of the domestic market, creating a dangerous regulatory precedent that threatens the stability of national operators without guaranteeing a resolution to the Amazonian problem,” Derenusson adds.

Another expert, Diego Fernandes, a partner at the law firm Roenick Fernandes Advogados, goes further. He points out several obscure points in the text of the Chamber's bill that tend to encourage the opening of the precedent for air cabotage and give rise to a crisis in the national aviation sector.

Fernandes says that Article 216 of the bill, which was amended, does not restrict authorization to companies from specific countries - it refers to "foreign companies" without specifying their origin.

“The geographical limitation applies to the routes, not the operators,” he notes. “Any foreign company authorized for international flights in Brazil, regardless of where it is based, may apply for authorization for domestic routes originating from or destined for the Legal Amazon.”

Furthermore, Fernandes continues, the Brazilian Aeronautical Code had never allowed the domestic market reserve to be waived for geographical reasons – something that the bill now allows. With this, other regions with structural connectivity problems will be able to invoke the same argument in future legislative rounds, based on a consolidated legal basis.

The expert also mentions an impending political crisis. While Bill 539/2024 has just left the Chamber of Deputies, Bill 1600/2025, which provides for the creation of the NorteAR Program, is still awaiting a rapporteur in the Senate. "Both bills will arrive on the House agenda at the same time, with opposing premises: one betting on competition, the other on subsidies," warns Fernandes.

The worst part, according to him, is that the main solution already has a legal basis and is stalled due to a lack of regulation. This is the General Tourism Law of 2024 (Law 14.978), which already authorizes the use of FNAC to subsidize the purchase of aviation kerosene at airports in the Legal Amazon – it only depends on an executive decree.

In other words, the forgotten solution does not require a new law or a new vote, acting directly on the input that most burdens the Amazonian routes, without transferring public resources via direct subsidies to companies.

“All three measures are compatible with the two bills currently under consideration; the problem is one of political priority,” says Fernandes. “The real risk is that Congress will approve two new instruments while a third, already approved and potentially more efficient, remains without a decree.”