Brazil
Analysis

When could Brazil launch new airport concession auctions?

Bnamericas Published: Wednesday, January 25, 2023
When could Brazil launch new airport concession auctions?

Just as Brazil’s air passenger numbers are about to return to pre-pandemic levels, clear signals on new concession auctions are lacking.

"New airport concession auctions in Brazil now depend more on political will than on other factors, since the airports that can still be offered to the private sector already have an advanced structure in terms of contract model," Alberto Sanz Sogayar, a partner at law firm MAMG Advogados and specialized in infrastructure contracts, PPPs and project finance, told BNamericas.

According to Sogayar, the government may use this year to better understand the situation with each airport and prepare auctions starting next year.

The airports covering about 90% of passenger transport are already concessioned to players like CCR, Socicam, Invepar, XP, Aena Desarrollo, Vinci Airports, Inframérica, Fraport and Flughafen Zürich.

But opportunities still exist.

RIO DE JANEIRO AIRPORTS

The previous Jair Bolsonaro administration planned to offer the Galeão international and Santos Dumont domestic airports in a single package, but the current government is reviewing the plans.

Concession plans existed for years and the auction, involving 15 other airports, was planned for last year.

But the government suspended the process because the operator of Galeão international airport, RIOGaleão, controlled by Singapore's Changi Airportdecided to return its concession due to collapsing passenger numbers. The contract was valid until 2039.

Airports and ports minister Márcio França told a press conference that the government was trying to persuade RIOGaleão to keep the concession.

"There is a legal and a political situation. We are going to study the resumption of this partnership [with RIOGaleão] because it is the simplest way. This is one of the biggest companies in the world. We know they suffered from the pandemic," França said.

"It is legally possible to maintain this contract with RIOGaleão after a contract rebalancing, but at this stage, when the company has already expressed its intention to return the asset, this would create a precedent for several other companies to adopt a similar path," said Sogayar.

OTHER CONCESSIONS

Two other contracts remain in limbo, with concession owners wanting to return them but the government not providing details about an auction.

In 2020, Argentina-based Inframérica announced plans to return its concession for São Gonçalo do Amarante airport in Rio Grande do Norte because passenger number projections did not materialize. It assumed the concession 2011.

And Aeroportos Brasil Viracopos, comprising local infrastructure company Triunfo Participações e Investimento, engineering firm UTC Engenharia, and Egis, won the concession for Viracopos airport serving Campinas city in São Paulo state in 2012.

Audit court TCU already authorized reoffering the concessions.

RECOVERY

"The volume of passengers we had in 2019 is likely be fully recovered by the end of this year," Bruno Pahl, the head of infrastructure and project finance at Fitch Ratings, told a seminar.

Civil aviation authority Anac said in a press release that last year’s passenger numbers were the highest since 2020, when the pandemic hit.

Overall, 82.2mn domestic passengers were registered, up 31.4% year-on-year and 81.8% compared to 2020, while 15.6mn international passengers were registered, up 226% and 131%.

The figures correspond to 86.5% of domestic and 64.7% of international passengers in 2019, added Anac.

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