Jerome Cadier, CEO of LATAM Airlines Brazil, has issued a serious warning about the consequences of Brazil’s recently approved tax reform. According to the executive, the implementation of the new tax structure could lead to an approximate 25% increase in airfare prices across the country.
Cadier acknowledged that the reform represents a necessary step forward for the broader Brazilian economy, but he warned it introduces «massive sectoral distortions» that directly impact the aviation industry. Despite assurances given during legislative discussions, Cadier claims the reform will result in a «brutal tax increase» for the airline sector. He stressed that airlines will not absorb this cost: «They simply on the tax paid by engers,» he said, underlining that the financial burden will fall on consumers.
This viewpoint is echoed by the International Air Transport Association (IATA), which, according to Valor Econômico, perceives an increasingly «hostile environment» for aviation development in Brazil. The industry’s main concern lies in the newly introduced dual Value-Added Tax (VAT)—comprising the Contribution on Goods and Services (CBS) at the federal level and the Goods and Services Tax (IBS) for states and municipalities—which, unlike in many global markets, does not provide preferential treatment for air transport…
