Airlines want to re-discuss kerosene price with government

Brazilian airlines asked the government this Monday (11) to set up a permanent dialogue table to discuss the price of aviation kerosene and heard a positive signal from Minister Paulo Guedes (Economy). The sector advocates analyzing all the factors that influence fuel prices – with the possibility, even, of evaluating Petrobras’ pricing policy.

Eduardo Sanovicz, president of Abear (Brazilian Association of Airlines), says that the intention of the meeting with Guedes was to request a channel for dialogue on the subject. “Our idea is to propose a permanent table of debate and dialogue involving all those who are related to an item that has completely gotten out of control, which is the cost of jet fuel,” Sanovicz said after the meeting.

According to the companies, fuel had already risen 76% in 2021 and now accounts for 50% of costs (instead of the traditional 30%) amid the war in Ukraine and the resulting soaring oil price.

The companies claim that the scenario generated a loss of R$ 16.5 billion last year for the sector and has led to an increase in ticket prices and the reprogramming of airline networks.

At least part of the rising values ​​are to blame for competition problems in the fuel market, in the sector’s view. Specifically, the companies complain about what they call Petrobras’ monopoly, oligopoly in the distribution chain, lack of transparency in fuel pricing and the oil company’s international parity policy.

“This is one of the themes [política de preços da Petrobras] which can even be debated. It doesn’t need to be reviewed in its entirety, it may not even be reviewed. But it is possible for us to open all her themes on the table and look one by one, and compare, for example, with the international market”, said Sanovicz on Monday.

He said that the intention of this Monday’s meeting was not to ask for tax relief. But the sector intends to put on the suggested dialogue table, as shown by the Sheeta number of items they see as problems – and the list includes both the price of jet fuel and the need for tax relief for the sector.

Executives are asking the government for a tax refinancing program (Refis) for the sector, or at least a deferral of air traffic control fees.

In addition, they ask for relief measures related to payroll taxation, hazardous work premium, Cofins applied to imports, state ICMS and income tax on aircraft leasing.

In the meeting with the president of the Chamber, Arthur Lira (PP-AL), the companies defended the importance of an MP (Provisional Measure) that cuts the Income Tax on the leasing of aircraft. The text was published by the government on December 31, 2021 and is still pending in Congress.

The MP reduced the income tax on aircraft leasing to zero until the end of 2023 and established a staggered increase thereafter to 1% in 2024, 2% in 2025 and 3% in 2026. MPs have immediate force of law, but must be ratified by Congress within four months to become definitive – otherwise, they are no longer valid (in this case, the rate would be raised to 15%).

In addition, the companies defended against Lira the importance of another MP, Voo Simples, which is seen by them as an instrument for simplifying the business environment. “We present to the president of the Chamber a current panorama of the air sector, impacted by the increase in structural costs with the war in Ukraine, and we emphasize the importance of the two MPs so that airlines are better able to guarantee a sustainable recovery, contributing to the development country’s economic and social life,” the organization said in a statement.

According to the sector, another exemption, that of PIS/Cofins on aviation kerosene (already approved by Congress and sanctioned by the government), has not yet reached companies and has little impact given the high costs of fuel.

“As we are going to set up a debate table, we internally discuss a series of themes. These themes, if the debate table is installed, will obviously be put to the interlocutors”, stated Sanovicz.

“I don’t want to go into details so as not to advance topics about which we are still not absolutely sure. The fundamental thing is to have a technical, rational, managerial debate as quickly as possible, because this is important for society as a whole,” he said. .

Sanovicz stated that the new instrument for dialogue between the government and the sector does not yet have a start date, but that it will be as soon as possible. According to him, Guedes suggested that the table, which would also be composed of the Ministry of Economy, should have the central participation of the Ministry of Mines and Energy.