Background on Key Players and Context
The International Air Transport Association (IATA) and the Latin American and Caribbean Air Transport Association (ALTA) have voiced their “profound concern” over a bill passed by Brazil’s Chamber of Deputies. This legislation mandates that airlines include checked and carry-on baggage within the base fare of a ticket. The bill still needs to be debated in the Senate.
IATA and ALTA are influential organizations representing global and regional airlines, respectively. Their concerns carry significant weight as they advocate for the interests of airlines worldwide. The bill, supported by lawmakers from the Workers’ Party (PT) and backed by populist sectors and consumer protection unions, aims to address a growing perception that airlines are charging “excessive add-on fees” for services previously included.
Key Concerns Raised by IATA and ALTA
IATA and ALTA have classified the initiative as a “historic setback,” warning that it could jeopardize the sector’s competitiveness, escalate operational costs, and ultimately result in pricier tickets for consumers.
- Competitiveness at Risk: The organizations argue that the legislation could undermine the airlines’ ability to compete effectively in the market, potentially leading to reduced services or increased fares.
- Increased Operational Costs: By forcing airlines to include baggage allowance in the base fare, carriers may face higher costs, which could be passed on to consumers.
- Potential for Higher Ticket Prices: IATA and ALTA caution that the bill might result in more expensive air travel for passengers, as airlines attempt to offset increased expenses.
Government’s Perspective and Industry Response
The Brazilian government and some congressional members view the bill as a means to “protect consumers” by reinstating free baggage allowance. However, the airline industry and sector analysts consider it more of a political response than an economic one.
In most liberalized air markets, including the United States, European Union, Chile, Mexico, and Colombia, airlines have the freedom to set prices and charge for additional services differently. This flexibility allows airlines to cater to diverse customer preferences and market conditions.
Call for Dialogue and Reconsideration
IATA and ALTA urge the Senate to reconsider the proposed legislation and engage in open dialogue with the industry to ensure consumer protection without compromising the sector’s competitiveness and affordability.
“We call on lawmakers to prioritize what genuinely benefits passengers: affordable, safe, and sustainable air connectivity. Restrictive legislation that raises costs will harm everyone: passengers, communities, and the economy as a whole,” stated IATA and ALTA jointly.
