Brazil’s transportation leadership is pushing to make it easier for airlines to access government-backed financing through a multi-billion dollar aviation fund, according to official government documents.
Transportation Minister Silvio Costa Filho sent a formal request to Finance Minister Fernando Haddad last week seeking to relax loan requirements for the National Civil Aviation Fund (FNAC), which is set to distribute approximately $765 million beginning in 2026.
“It will be necessary to adjust the resolution to make FNAC credit more attractive,” Costa Filho wrote in an official letter to Finance Minister Fernando Haddad.
The February 13 correspondence, reviewed by Reuters, outlines several significant modifications to current lending terms. The proposals would broaden loan eligibility beyond aircraft purchases to include pilot training and aviation worker education programs. Currently, the fund only supports buying domestically-built planes, engines, parts and related equipment.
Another major change would dramatically increase financing limits from 10% to 30% of an aircraft’s total value. The proposal also seeks explicit permission for airlines to use loan money for contractual guarantees.
Brazil’s leading aircraft manufacturer Embraer stands to gain from the expanded government-supported financing options.
The minister additionally wants to reduce regional flight requirements that airlines must meet to qualify for funding. His plan would cut the mandatory annual flight increase in Brazil’s Amazon and northeastern areas from 30% to 15% compared to pre-financing request levels. Alternatively, airlines could ensure 17.5% of total yearly departures serve those regions, down from the current 20% requirement.
Neither the transportation ministry nor finance ministry provided immediate responses regarding the proposal’s timeline or review process by Brazil’s National Monetary Council, the country’s primary economic policy authority.
The lending program emerged in October following sustained airline industry lobbying. Government officials justified the support as necessary recovery assistance after COVID-19 impacts on aircraft purchases, maintenance operations, and sustainable fuel acquisition.
Brazil’s aviation market is dominated by three major carriers: Gol, LATAM, and Azul, ranked by market share.
The fund offers loans at 6.5% to 7.5% annual interest rates depending on the credit type, significantly below Brazil’s 15% benchmark rate.
