BRASILIA: Brazil's interim government said on Wednesday it will veto a proposal to scrap limits on foreign ownership of local airlines that faces strong opposition in the upper house as part of a deal to save other parts of a bill on the air transport sector.
The Lower House passed a proposal this month to remove the current restriction on foreign companies not owning more than 20 percent of a Brazilian carrier, but the legislation faces opposition in the Senate, where lawmakers are concerned about its impact on regional airlines.
"The bill will be approved as it is and then the government will veto this proposal (on foreign ownership)," Presidential Chief of Staff Eliseu Padilha told reporters. "Afterwards, we will send this issue back for a deeper debate in the Senate."
Interim President Michel Temer, who has replaced suspended President Dilma Rousseff while she stands trial in the Senate for allegedly breaking fiscal rules, supports lifting limits on foreign ownership in a bid to help Brazilian carriers struggling with the deepest recession in decades in Latin America's largest economy.
Shares of local airline Gol Linhas A?reas Inteligentes SA , partly owned by US carrier Delta Airlines Inc , slipped after Padilha's comments and were down 5 percent in early afternoon trading.
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