Brazil tax reform could lift airline fares by up to 23% domestically

The International Air Transport Association (IATA) warned that Brazil's newly approved tax reform, which introduces a value‑added tax of 26%‑27%, may raise the price of domestic airline tickets by about 23% and international fares by roughly 26%. IATA estimates a typical domestic flight could climb from R$ 650 to R$ 800 per segment, while an average international trip might rise from US$ 740 to about US$ 935. The association also highlighted Brazil's heavy litigation burden – one lawsuit for every 227 passengers – which adds 3%‑5% to ticket costs and generates over R$ 1 billion in annual legal expenses. IATA officials argue that higher fares could push travelers back to bus travel, reversing a recent surge that saw more than 100 million passengers board domestic flights in 2024, a historic first for the country. The airline body urged the government to consider policies that keep air travel affordable, stressing its importance for connectivity, cargo, and essential services across Brazil's vast territory.