RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/201
4 October 2001
(01-4786)
Council for Trade in Services Original:  English
COMMUNICATION FROM BRAZIL
Review of the GATS Annex on Air Transport Services
Present Situation of Commercial Air Transport in Brazil
A. INTRODUCTION
1. Commercial air services in Brazil, as in many other countries, have been increasingly
benefiting  larger portions of the country’s population, making civil aviation an essential tool for social
and economic development. As a consequence of the huge growth observed in aircraft movement, it
has become necessary to expand airport infrastructure and air traffic control and navigation systems,
in order to ensure high levels of operational safety conditions. Thus, the evolution of air transport has
required the expansion and modernization of airport and air traffic control systems, involving also
economic and political aspects for the provision of such services.
2. With respect to the economic aspects, in the early days of commercial aviation, there was
significant support from the State to airlines, airport services and air traffic control and management,
especially aimed at providing financial feasibility to the aviation business, which was regarded as
essential for the progress of a country.  For a long time, there was a strict regulatory scenario for civil
aviation activities, comprising technical, operational and economic aspects of air and airport services.However, the last decades have seen a significant reduction of State intervention in the context of
regulatory reforms focused on the commercial and economic dimensions of the sector. These have
resulted in a more favorable environment for the greater participation of private capital in the
activities linked to civil aviation. This process is in keeping with the general trend towards policies
aimed at increasing competition and efficiency in the sector, including through privatization of
airlines and airports.
B. T
HE EVOLUTION OF BRAZILIAN AIR TRANSPORT IN THE LAST DECADE
3. Brazilian air transport has been increasingly driven by private capital over the last years. The
only airline constituted with public funds was under the control of one of the states of the Federation.
However, it was privatized in the beginning of the last decade.
4. Starting from the beginning of the 90’s, the Brazilian Department of Civil Aviation (DAC)
has been conducting a gradual opening process of the air transport market in order to offer to the
users, passengers and cargo different alternatives of air transport  services within a competitive
environment in which market forces prevail. In th is context, efforts have been made to limit the
regulatory action of the State to the control mechanisms aimed at the operational safety and at the
quality of services rendered to the public.
5. From an economic viewpoint, air transport has gone through several periods of oscillation due
to the cycles and conditions experienced during its development process.  However, from an overall
perspective the growth rates of the  air transport sector have always been higher that those of the
economy as a whole which points to multiplier effects of the sector given its important backward and
forward linkages.S/C/W/201
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TABLE 1 – GENERAL SITUATION OF THE SECTOR  (05/09/01)
Theme QUANTITY
AIRLINES
Regular
Non-regular (charter)
Air Taxi
Individual Air Taxi
Aerial Work (Agriculture)
Aerial Work (Advertisement)
Aerial Work (Surveying)
Aerial Work (Prospecting)
Air show
Aerial Work (Photography)
TOTAL22
07
410
18
276
38
22
05
01
09
808
AIRCRAFT
Airplane
Rotorcraft
TOTAL:9.993
    832
10.825
FLIGHTS AND MOVEMENTS
Domestic
Regional
TOTAL NATIONAL:
National Airlines
Foreign Airlines
TOTAL INTERNATIONAL:
 TOTAL :FLIGHTS
815
491
1.306
144
277
421
1.727MONTHLY MOVEMENTS
18.892
10.416
29.308
2.372
3.976
6.348
35.656
AIRMEN
Pilot
Airline
Commercial
Private
Subtotal
Flight Attendant
Flight Engineer
TOTAL :AIRPLANE
7.163
16.807
37.624
61.594
19.164
1.462
82.220ROTORCRAFT
649
1.869
2.823
5.341
-
-
5.341TOTAL
7.812
18.676
40.447
66.935
19.164
1.462
87.561
AIRPORTS
Public
Private
TOTAL:706
1.367
2.073S/C/W/201
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TABLE 1– GENERAL SITUATION OF THE SECTOR (05/09/01) (Cont'd)
Theme QUANTITY
HELIPOINTS
Public
Private
TOTAL: :34
275
309
AIRCLUBS 198
SCHOOLS
COURSES
Total:347
1.705
2.052
REPAIR STATIONS 413
DAC EQUIPMENT
Simulators
Twin Engine
Single Engine
Aircraft
                 TOTAL:13
60
447
520
6. The significant growth in the landing and take-off movements of aircraft in the major airports
resulting from the intense utilization of air transport in the recent years has been causing air traffic
congestion and delays in these operations due to the insufficient capacity of airspace control systems
and airport infrastructure. In order to deal with these congestion situations, appropriate regulations
were adopted which were aimed at systematizing the existing capacity through the creation of “slots”,
reorganization of air traffic and optimized utilization of airport infra-structure.
TABLE 2  TOTAL AIRCRAFT
Updated data as of September 2001
Total Aircraft  (Airplane + RotorcraftS/C/W/201
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TABLE 3  AIRPLANE MOVEMENT (LANDING + TAKE-OFF)
Updated data as of September 2001
7. However, the new trend of air transport liberalization policy primarily requires an adequate
capacity in the airspace control and airport infra-stru cture system in order to allow for the continuous
and sustainable growth of civil aviation.  Thus, several efforts have been made by Brazilian civil
aviation authorities aiming at the expansion of the capacity, efficiency and safety of air transport, as
recommended by the International Civil Aviation Orga nization (ICAO). With respect to liberalization,
Brazil has adopted measures to give access to new entrepreneurs into the airline business rendering
differentiated and more accessible services, thus contributing to the development of the domestic air
transport market.
TABLE 4   AIRLINES
Updated data as of September 2001
Total General (Domestic + International )
Scheduled Airlines Non -Scheduled - airlinesS/C/W/201
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TABLE 5  AIR TAXI
TABLE 6 - SPECIALIZED AIR SERVICES
TABLE 7 – MOVEMENT OF PASSENGERS (Embarked + Disembarked)
Air Individual Air taxi
Specialized air services
Total  (Domestic+International)S/C/W/201
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C. ENVIRONMENTAL IMPACT :  THE BRAZILIAN CONCERN
8. The intense utilization of air transport has resulted in increased environmental impacts,
especially in the neighbouring areas of airports due to the noise resulting from landing and take-off
operations and, in the upper atmosphere, by the emission of gases due to the combustion of fossil fuel
with consequences in the ozone layer.
9. Some improvements have been achieved in our region along the last twenty years, with the
natural renewal of airline fleets, with the replacement of the first generation of extremely noisy
aircraft by more silent and less polluting ones, particularly within the domestic market.
10. As for the international lines, the companies ha ve been accelerating the process of fleet
renewal with the purpose of attaining greater co mpetitiveness. To that effect, they have been
operating with the most modern existing aircraft to  meet the requirements of Chapter 3 – Annex 16 of
ICAO.
11. The implementation of a new aeronautical noise standard is currently under discussion in the
context of the Committee of Aviation Environmental Protection (CAEP), envisaging a greater
reduction in the sound emission levels.
12. This discussion deserves special attention from the ICAO Member States due to the costs
resulting from the devaluation process of older and noisier aircraft as well as the costs related to fleet
renewal in order to maintain high levels of compet itiveness, especially in the international routes.
13. Brazil is the only developing country with an active participation in the CAEP. It has been a
CAEP member since the early 1980s.
D. THE LIBERALIZATION OF AIR TRANSPORT IN BRAZIL
14. The Brazilian civil aviation authorities have encouraged the international airline associations
to utilize code-sharing operations, as well as agreements for the development of common  proceduresamong the States of the region.
15. The milestone of this initiative was the signature of the Agreement of Fortaleza which is now
being reviewed with the objective of obtaining better conditions for regional opening and further
expansion to other States of the region.
16. Thus, Brazil is seeking to discuss with its MERCOSUR partners on the possibility of giving
the terms of the Agreement of Fortaleza a broader context in order to strengthen international air
transport within a regional framework.
17. The trend of the Brazilian civil aviation policy has been towards international liberalization,
with the objective of making international travel an  easier operation for the airlines involved and less
expensive and complicated for its users.
18. It should be emphasized that Brazil has been pursuing policies aimed at ensuring growth for
its national airlines.  The country retains 1.8% of the air transport world market, being the 13
th country
in volume of passengers transported, with an annual growth rate of 12.5% in the last 6 years.
19. With respect to commercial aviation operational safety, Brazil holds a 0.5% accident rate for
each l million take-offs, one of the best aviation performances in the world.S/C/W/201
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TABLE 8 - ACCIDENT RATE PER MILLION TAKE-OFFS
(Big Jets Built in the Western Hemisphere)
(Flight Safety Foundation)
E. THE REVIEW OF THE GATS ANNEX ON AIR TRANSPORT SERVICES AND THE FURTHER
APPLICATION OF THE AGREEMENT IN THE SECTOR
20. The review of the GATS Annex on Air Transport Services provides us with an excellent
opportunity to share information about the reality of each country as well as about the latestdevelopments  in terms of air transport as a whole. It also gives the opportunity to assess the role of all
services directly or indirectly related to traffic rights.
21. However, with respect to the possibility of a further application of the General Agreement on
Trade in Services in the air transport sector, Brazil is strongly decided to endeavour so that traffic
rights and all the segments directly involving traffi c rights remain excluded from the coverage of the
Agreement continue to be discussed or negotiated within the parameters of ICAO bilateral or
multilateral agreements.
22. Brazil recognizes that a great effort is still needed towards the liberalization of international
air transport.  This is being done and will necessarily continue to be carried out within the context of
ICAO, which has statutory responsibility with respect to international air transport and, especially, its
safety and protection.
23. To this effect, Brazil invites Members to join efforts to strengthen ICAO in its role as the
privileged and appropriate forum for the permanen t strengthening and development of international
air transport safety, where all sector issues are dealt with, and all the necessary guidelines have been
approved by consensus since 1946 aiming at the achievement of the best possible environment for
international air transport.
24. Finally, it is important to mention the regu latory measures proposed by ICAO that give
special treatment to the evolution of air transpor t activities in developing countries. This is an
additional reason why hard aviation rights and regulations should continue to be dealt with under the
jurisdiction of ICAO, since the basic traditional principles of the General Agreement on Trade in
Services, as they are today, cannot become applicable to traffic rights and services directly related to
traffic rights  in the middle and long terms without implemen tation of deep changes in the operational
structure of air services, the extent and impact of which can not be properly assessed  from the present
stand point.
USA/CANADIAN
0.5EUROPE  0.8
CHINA 4.6
ASIA  2.7CAR/LAM  4.3
OCEANI A O.6MIDDLE EAST  2.7S/C/W/201
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25. To assume and to strengthen the role of ICAO  as the leading instance of international air
transport is to assure that the evolution of air services will be governed by the perfect balance of
passengers and cargo safety, adequate standards of competition and high technological and
environmental requirements, benefiting not only WTO and ICAO Members, but the billions of
individuals whose ordinary lives are directly or indirectly affected by air services operations.
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