As we prepare for the sixth tranche of airport concessions, Infraero’s role in Brazil airport system is becoming more nebulous

19 March, 2019

Last week The Blue Swan Daily highlighted the latest airport developments in the Mexican capital, where there is a new infrastructure plan under development following the decision to cancel construction of the new Mexico City International airport. This week we note that the situation with the airport environment in Brazil is equally confusing, but for different reasons.

The Brazilian government has announced a sixth tranche of airport concessions while the fifth is still to be formalised. As with the fifth, it is down to much smaller airports in blocks with considerably less appeal to international investors but the state is adamant that it has six airports which can be used as "anchors" for this sixth round of airport concessions, including Sao Paulo’s Congonhas Airport and Rio de Janeiro’s Santos Dumont Airport.

Earlier this year, shortly after president Jair Bolsonaro took office, The Blue Swan Daily said the “ripe low hanging fruit has already been picked” in terms of airport concessions and that Brazil was “running out of attractive anchor airports” to be the lead attraction in any ‘block’ sale of airports. As it noted: “the smaller and more provincial an airport is, the less the interest in it from foreign investors there is likely to be.” The inclusion of Sao Paulo’s Congonhas Airport and Rio de Janeiro’s Santos Dumont Airport has been a real twist in the tale.

But the really interesting question is what will become of state airports’ operator Infraero? If these block concessions continue into a seventh and eighth there won’t be much of it left. Recently appointed Infraero President Martha Seillier (who previously had responsibility for privatising Brazil’s airports) says the Brazilian Government “did not brief her to remove Infraero, but to transfer airport assets to the private sector”. It is certainly making a good job of that.

She will work towards maintaining Infraero with a smaller infrastructure and working on strategic areas such as airport staff training and even methods of using its technical expertise such as airside maintenance works including runway de-rubbering. Is that all that what was once one of the world’s biggest airport operators has come to, while arguments rage between international operators of concessioned airports and the government over traffic forecasts?

When the privatisation-by-concession process started back in earnest in 2012 and Infraero’s stake in the major airports was limited to 49% thus robbing it of much-needed income, there was talk of it taking on an active role in the privatisation of foreign airports, either in an advisory capacity or even as an operator/investor. But that never happened. Now it does not look like it ever will.