March 18, 2020 / 8:19 PM / 2 months ago

UPDATE 1-Brazil offers aviation industry limited relief from coronavirus

(Recasts with Brazil government relief measures)

By Marcelo Rochabrun

March 18 (Reuters) - Brazil on Wednesday announced measures to provide the country’s aviation industry relief from the coronavirus outbreak, allowing airlines and airports to defer certain fee payments, as pressure for government aid intensified across Latin America.

The moves excluded payment cuts, falling short of industry demands such as the lifting of certain taxes and reduced fees. Air navigation fee payments will be delayed by six months under an executive order.

One measure, which would require the legislature’s approval, includes delaying licensing fees that airport operators must pay the government.

The Brazilian Infrastructure Ministry had initially indicated the aid package would be announced earlier this week.

Brazil’s carriers said international travel demand has tumbled as much as 85% due to the novel coronavirus outbreak.

“The government is anticipating problems that could arise from the deepest economic crisis in the history of the aviation sector,” Infrastructure Minister Tarcisio Freitas said in a statement. “We will work to avoid lasting damage to Brazilian air transportation.”

Many countries in Latin America have shut down or restricted flights in recent days due to the coronavirus outbreak, heavily affecting regional airline operations and leaving passengers stranded.

Panama’s Copa Airlines issued the direst warning yet late on Tuesday, saying a “complete, temporary shutdown” of its operations was possible by April.

Copa had previously said it would reduce 80% of its flights and ground most of its fleet, in the most drastic steps taken by a Latin American carrier.

Copa uses Panama City as a hub for connecting North American and South American travelers through short layovers at Tocumen Airport.

Competitor LATAM Airlines said it would cut 70% of its flights.

The strain on regional carriers pushed credit ratings agency Moody’s to downgrade Azul SA, LATAM and Aeromexico late on Tuesday. Gol Linhas Aereas Inteligentes was put under review for a potential downgrade. (Reporting by Marcelo Rochabrun, additional reporting by Jake Spring in Brasilia; Editing by Bernadette Baum and Richard Chang)

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