(Adds comment from lawmaker in third paragraph.)
Oct. 24 (Bloomberg) -- Tam SA and Gol Linhas Aereas Inteligentes SA gained on speculation the government will allow greater foreign investment in the aviation industry as Brazil prepares for the 2014 World Cup and 2016 Olympics.
Tam, Brazil’s biggest airline by market value, rose 1.7 percent to 31.52 reais at the close in Sao Paulo, advancing for a fifth day in its longest winning streak in two months. Gol, the second-biggest, increased 5.5 percent to 13.48 reais, the highest price since July 28.
Brazilian lawmaker Bruno Araujo, who is sponsoring a bill to overhaul civil-aviation rules, told O Estado de S. Paulo newspaper in an interview published yesterday that he plans to put an end to limits on foreign capital holdings in domestic airlines. He confirmed the report in a telephone interview with Bloomberg News today, without giving further details. Foreigners currently can’t own more than 20 percent of Brazil’s carriers, Estado said.
“Since the government is very concerned about infrastructure, I think the project will go through,” said Rosangela Ribeiro, an analyst at SLW Corretora brokerage in Sao Paulo. “It would be healthy for the companies. They’re going to need to invest a lot.”
Brazilian President Dilma Rousseff has pledged to tackle infrastructure bottlenecks to boost economic growth. The World Cup and Olympics will require 140 billion reais ($79.8 billion) of investments in stadiums, roads, airports and other projects, Sports Minister Orlando Silva said in April.
Chile’s Lan Airlines SA agreed to acquire Tam in August last year. The 5.6 billion-real transaction must still be approved by Brazil’s antitrust regulator.
--With assistance from Maria Luiza Rabello in Brasilia. Editors: Brendan Walsh, Marie-France Han
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