Brazil’s aviation industry is currently embroiled in a tangled web of legal battles, experiencing a surge in litigation like never before. Passengers are voicing their frustrations over delays, cancellations, overbooked flights, and refund issues, catapulting Brazil to the forefront of airline-related lawsuits globally.
On the flip side, airlines argue that these lawsuits drive up their operational costs, resulting in higher ticket prices and deterring new competitors from entering the market. According to the International Air Transport Association (IATA), lawsuits are costing Brazilian airlines a staggering R$1 billion ($250 million) annually.
Dany Oliveira, IATA’s Brazil director, notes that each ticket sold carries an additional R$10 to R$12 to cover these legal expenses, impacting the 100 million passengers flying within the country each year.
Leading the pack is Latam Airlines, accounting for almost half of its operations in Brazil, sharing that 98% of their customer lawsuits originate from the country. Despite being recognized as the world’s second most punctual airline, Latam saw a significant 33% increase in lawsuits from 2022 to 2023, projecting legal costs to surpass R$350 million in 2024.
Even established airlines like Gol are feeling the strain, with the company filing for bankruptcy protection in the U.S. following a drastic 50% cut in seat capacity in Rondônia due to the litigation costs.
Brazil Faces Surge in Passenger Lawsuits Against Airlines
Experts in aviation law, like Ricardo Bernardi, highlight how Brazilian courts often assume emotional distress in cases of flight disruptions. Jurema Monteiro, head of the Brazilian Airlines Association (Abear), points to regulatory ambiguities as fueling much of the litigation. She, alongside Oliveira, believes that certain “predatory” websites are encouraging unnecessary lawsuits from passengers.
While some blame regulatory gaps, many Brazilians see airlines as overpriced, offering subpar services and prioritizing profits over customer satisfaction. The sentiment extends to other sectors in Brazil, like banks with their high interest rates, leading to a general feeling of being exploited by corporations.
Luciano Barreto, CEO of AirHelp, adds that airlines often complicate negotiations with passengers, pushing them towards legal action. Abear and the government have stepped in with a mediation platform, resulting in a 30% drop in complaints and a 10% increase in resolution rates.
Despite these efforts, Brazil’s aviation legal landscape remains intricate, solidifying its status as the most lawsuit-prone aviation market in the world.