Brazil's airline association ABEAR is calling on the Sao Paulo state government to lower the state tax on aviation fuels, following similar moves from other Brazilian states.
Last week, the capital district, Brasilia, slashed the service tax on fuel from 25% to 12%, lowering the yearly bill of fuel dispensed at the Brasilia International airport by R$131 million ($65m).
Brasilia was the latest of a number of states which decided to help Brazil's loss-making domestic commercial aviation sector by lowering taxes. Previously, Rio de Janeiro and Minas Gerais, home to Belo Horizonte Confins International airport, had already applied similar fuel tax cuts. Both Gol's and TAM's shares showed significant gains after the Brasilia decision.
ABEAR president Eduardo Sanovicz welcomes the move, and is now lobbying Sao Paolo state, the last remaining major state which is still collecting a 25% tax on aviation fuel, to follow suit.
The tax cuts are in line with recommendations from Brazil's federal ministry of aviation, which called earlier this month for coordinated measures to make Brazilian aviation more efficient and competitive to avoid a repeat of the financial losses reported by both Gol and TAM in 2012.
According to a ministry source, other measures under discussion include increasing the foreign ownership limit of Brazilian airlines, allowing local airlines to hire foreign pilots, as well as further liberalisation of the aviation market which could include more comprehensive open skies agreements.