The end of 2014 left an important legacy to Civil Aviation after the expiry of the period for conversion of Provisional Measure No. 652, which regulated the Regional Aviation Development Program ("RADP"). Among other aspects, Provisional Measure No. 656 established subsidies for airport charges relating to passenger transportation and part of the costs of flights used in regional routes.

The aforesaid Provisional Measure, in regard to the RADP, kept the following guidelines: (i) the concept of Regional Airports defined as small and medium-sized airports with an annual movement of less than 600 thousand passengers and 800 thousand passengers in the case of the region covered by the Legal Amazon; (ii) a 30% restriction on the use of resources from the National Civil Aviation Fund (FNAC); (iii) subsidies for the payment of part of the costs limited to up to 60 passengers, such subsidies covering up to 50% of the available seats per aircraft, except in the Legal Amazon; (iv) the possibility of more than one company receiving the subsidies per route; and (v) a limited period of 5 years for the RADP, renewable for an equal term.

Therefore, Regional Aviation may now take its first steps in Brazil. However, further regulation must still be enacted by the Executive Branch and, in a year of fiscal tightening, we shall see if the Executive Branch will effectively allow new subsidies to be granted.

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