Brazil Post to buy minority stake in cargo airline

Brazil Post is preparing to acquire a minority stake in air cargo firm Rio Linhas Aéreas. The state-owned postal service in Brazil has submitted a proposal to the Administrative Council for Economic Defense (CADE), the country’s competition commission.

The company did not reveal the size of the stake it intends to buy in the Curitiba-based cargo airline, which already provides night flights to transport mail and packages.

Brazil Post is working to find an alternative air freight model than the current system in which 13 airlines are contracted within the Night Post Network, under recommendations from government auditors.

The company has been permitted to acquire other businesses since postal reform legislation was enacted in 2011.

It said in a statement: “The same model proposed by the Post Office is already used by postal operators in Australia and China, countries with continental sizes similar to Brazil.”

Airline

Brazil Post said studies have been carried out to look at the most technically suitable air freight partner, and Rio Linhas Aéreas has the largest number of freighter aircraft in the market. The firm currently runs mail and packages over 13 routes for Brazil Post, and also runs a Boeing 727 for DHL Express.

It has 10 aircraft in total, two 767s and eight 727s, with a base in Afonso Pena International Airport in Curitiba, and hubs at Rio de Janiero International Airport and Salgado Filho International Airport.

The Post said if CADE, the National Civil Aviation Agency (ANAC) and other federal regulators including the government finance and communications ministries, it could have a “significant” shareholding in the cargo airline in the second half of this year.

Separately, at the end of last month CADE approved a plan for Brazil Post to launch a joint venture with its existing financial services partner, the Bank of Brazil, to expand its provision of financial services.