Brazil Eases Rules for Airline Loans from Public Aviation Fund to Reflect Operating Needs

Brazil’s National Monetary Council approved a set of changes broadening how airlines may draw on the National Civil Aviation Fund (FNAC). The alterations expand eligible uses to include crew and worker training, raise the financing cap on qualifying items from 10% to 30% of an aircraft’s value, and permit loan proceeds to secure contractual guarantees. FNAC is expected to make 4 billion reais available beginning in 2026.

Key Points

The National Monetary Council approved broader eligibility for FNAC-backed loans, allowing uses beyond domestically built aircraft and components.
Financing caps for eligible items increased to 30% of an aircraft’s value, up from 10%, and loan proceeds may now secure contractual guarantees.
The measure is expected to benefit Embraer and major Brazilian carriers Gol, LATAM and Azul; FNAC is slated to release 4 billion reais starting in 2026.

Overview

Brazil’s top economic policy body, the National Monetary Council (CMN), voted to relax conditions on loans to airlines backed by the National Civil Aviation Fund (FNAC). The CMN is composed of three officials: the finance minister, the planning and budget minister, and the central bank chief. FNAC is expected to begin disbursing 4 billion reais in funding starting in 2026.

What changed

The finance ministry said the approved modifications increase the range of expenditures that airlines may finance with FNAC-backed loans. Previously restricted to acquisitions of domestically manufactured aircraft and components, FNAC financing can now be used for operational items such as training for pilots and aviation workers. In addition, the financing cap for eligible items was raised to 30% of an aircraft’s value from the earlier 10% threshold. The ministry also made explicit that loan proceeds may be deployed to secure contractual guarantees.

In a statement the ministry said, "The changes approved aim to make credit lines more in line with the operational reality of airlines, without increasing subsidies or altering the financial conditions of financing."

Context provided by government filings

Government documents seen last week had anticipated these adjustments; they were requested of the finance ministry by the Ports and Airports Minister Silvio Costa Filho. Officials have argued carriers require targeted support following the pandemic to purchase aircraft, perform maintenance and procure sustainable aviation fuel.

Who stands to gain

The higher financing cap could be advantageous to Embraer, the country’s largest aircraft manufacturer. The nation’s biggest carriers by market share - Gol, LATAM and Azul - are also positioned to benefit from the expanded access to FNAC credit lines.

Implications for markets and credit policy

By widening permitted uses of FNAC financing and loosening collateral rules, policymakers are aligning public credit support with airline operational needs. The measures adjust the funding toolkit available to carriers without, according to the ministry statement, changing the subsidy profile or the financial terms of the loans.

($1 = 5.1370 reais)

Risks

The changes expand credit access to airlines but the ministry asserts they do not increase subsidies or alter financial terms - oversight will be needed to ensure underwriting quality and fiscal impacts remain contained (impacts aviation and public finances).
The effectiveness of the measures depends on carriers using funds for intended operational needs such as training, maintenance and sustainable aviation fuel; execution risk remains (impacts airlines and aircraft suppliers).

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