Argentina and Brazil recently issued details of federal assistance packages to help their ailing transport industries. Neither covers the granting of federal loans, but reduces tax burdens imposed upon the airlines of both countries, thereby cutting operational expenses.
The Brazilian government has introduced seven measures that could provide industry-wide savings of $255 million-$318 million, with tax reductions alone representing almost $145 million.
Chief among these is the suspension of duties on aircraft leases for the next 15 months and the suspension of taxes levied against aircraft-hull insurance premiums, with the Brazilian government now underwriting insurance against war and terrorist risk.
Other measures include waiving import duties on aircraft parts and the tax on fuel acquired by local carriers, and the elimination of a long-standing debt regarding duties against revenues generated on international routes between 1988 and 1999.
Meanwhile, in Argentina, where operational costs have risen almost 150% since January, the government has rolled out a relief plan for the country's airlines to take effect within a month. As proposed, the move covers a 50% cut in value added tax (VAT) on fuel for domestic flights and a VAT exemption on aircraft lease financing.
Argentinian carriers are also not now required to insure their aircraft locally, where premiums are higher. The government has also set minimum and maximum air- fare rates on domestic routes.
Source: Flight International
