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Brazilian Airlines And Embraers  
User currently offlineCygnusChicago From United States of America, joined Mar 2007, 758 posts, RR: 1
Posted (7 years 2 months 1 week 1 day 16 hours ago) and read 1772 times:

I recall hearing that Brazilian airlines are at a disadvantage relative to foreign airlines when ordering Embraers. If this true, and if so why?


If you cannot do the math, your opinion means squat!
6 replies: All unread, jump to last
 
User currently offlineXtoler From United States of America, joined Sep 2007, 953 posts, RR: 0
Reply 1, posted (7 years 2 months 1 week 1 day 15 hours ago) and read 1758 times:

I'd be interested to read where you read that. It could be possible, but I thought they were doing pretty well, everywhere. Even Harbin in China had a contract to build a small number of 145's a few years ago and it seems the 170-195 market seemed to be taking off (no pun intended). Then again, EMBRAER products do not come cheap at all, and especially if Russia is really pushing for RJ's and/or the new improved turboprops are coming back into vogue, I can see their sales slowing a bit. Could it also be environmental concerns or having certification problems? Then again, Brazil is not exactly in the center of the populated world. Could be a number of factors. I'm certainly interested if anyone has more information on this subject.


EMB145 F/A, F/E, J41 F/A, F/E, because my wife clipped my wings, armchair captain
User currently offlineMiner From Brazil, joined Aug 2007, 105 posts, RR: 0
Reply 2, posted (7 years 2 months 1 week 1 day 15 hours ago) and read 1747 times:

BRA just ordered 20 EMB 195s with 20 more options.
I'm not sure if there are disadvantages but if so could it be due to tax related issues?
Also, the brazilian airlines are growing rapidly so the choices of aircrafts are capacity driven.
I can see regionals going to smaller jets but TAM, GOL, ONE and VRG are playing catch up with the market.


User currently offlineTavong From Colombia, joined Jul 2001, 836 posts, RR: 4
Reply 3, posted (7 years 2 months 1 week 1 day 15 hours ago) and read 1740 times:

if i remember correctly, the Brazilian planes are heavily taxed for brazilian airlines to buy them. But i think one of our brazilian a.netters sure can give u more detail .

Gus
SKBO



Colombian coffee, the best...take a cup and you will see how delicious it is.
User currently offlineLipeGIG From Brazil, joined May 2005, 11458 posts, RR: 58
Reply 4, posted (7 years 2 months 1 week 1 day 14 hours ago) and read 1688 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Quoting Tavong (Reply 3):
if i remember correctly, the Brazilian planes are heavily taxed for brazilian airlines to buy them. But i think one of our brazilian a.netters sure can give u more detail .

Correct. They need to use an off-shore company in order to buy them as export (without state and some federal taxes). After that the off-shore (Airline Brazil BVI Corp for example) lease them to the Brazilian Airline.

If a Brazilian Airline acquire them, they need to pay (IIRC) :

State Tax (ICMS): 18% to 25% (depending on the state)
COFINS: 9.25% (Federal)
Federal Tax on Industrialized Product (IPI): 25% (Federal)
Import Tax (on imported items): 20% (Federal)

And all of them in cascade (Aircraft price + II = Sub-total + IPI = sub-total + COFINS = sub-total + State Tax = Final Price) So... 100 x 20% = 120 x 25% = 150 x 9.25% = 163,87 x 25% = 204,84 (or 104% more)

And by the end... every banking debit transaction pays 0.38% flat to the government

Felipe



New York + Rio de Janeiro = One of the best combinations !
User currently offlineCygnusChicago From United States of America, joined Mar 2007, 758 posts, RR: 1
Reply 5, posted (7 years 2 months 1 week 1 day 13 hours ago) and read 1638 times:

Felipe,

Thanks for this info - very helpful! What is the rationale behind this? Which of these taxes would be incurred if the airline bought, say, Bomardiers? Would they pay the same in import duties?



If you cannot do the math, your opinion means squat!
User currently offlineLipeGIG From Brazil, joined May 2005, 11458 posts, RR: 58
Reply 6, posted (7 years 2 months 1 week 1 day 6 hours ago) and read 1543 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Quoting CygnusChicago (Reply 5):
Thanks for this info - very helpful! What is the rationale behind this? Which of these taxes would be incurred if the airline bought, say, Bomardiers? Would they pay the same in import duties?

If you lease a plane, no taxes incurre. If you import one, only ICMS (state sales tax) could be suspended on some states. This is why Brazilian Airlines use to lease instead of buying aircrafts.

TAM use to do their imports thru MCP, Gol thru CNF and Varig thru GIG.

Felipe



New York + Rio de Janeiro = One of the best combinations !
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