New AENA Internacional subsidiary will manage AENA’s Brazilian airport concessions – its first transaction for several years

Spain's Ministry of Public Works, which oversees transportation and infrastructure companies, has approved AENA's plan to create a subsidiary called Aeroportos do Nordeste do Brasil which will manage the concessions for Recife Guararapes International, Aracaju, Maceio Zumbi dos Palmares, Campina Grande, Joao Pessoa Castro Pinto and Juazeiro do Norte airports. The new company will fall under the AENA Aeropuertos Internacional structure in a similar way to how Fraport Brasil' manages Fraport's assests in the country.

Summary:

• AENA Internacional sets up Brazilian subsidiary to manage concessions there;
• This represents the first transaction for the division in a long time and will add to its current activities in Mexico,Colombia and Jamaica;
• AENA's winning Brazilian concession block contains only one airport of any real scale - and then that is less than half the size of Málaga.

AENA Aeropuertos Internacional had been, relatively speaking, inactive since the partial privatisation of the parent company in Feb-2015. That is despite declaring 14 months after the process that it "considers international expansion as one of the priorities of the company". Its current interests are mainly in Latin America (Colombia and Mexico), but also extends into the Caribbean and other regions of the world.

It is fair to say AENA Internacional has not been particularly acquisitive in its own right and its ambitions have mainly been in Latin America, where AENA has a longstanding track record. However, more recently it has been taking a greater interest in the contemporary airport transaction scene.

Last year for example it was attracted by the news that Brazil's shrinking state airport operator Infraero might launch an IPO (that did not happen and probably never will now), prepared itself for a possible concession process for five-to-seven airports in Cuba. In 2017 it was talking vaguely about targeting the Asian and US markets for expansion in order to spread risks and avoid relying on one market for stability.

But AENA did opt to pursue the fifth tranche of concessions in Brazil which saw it taking responsibility for the six airports mentioned above in the introduction. It did make a bid in previous rounds (as long ago as the second tranche, from 2012, AENA had been seeking out local partners to work with in Brazil, and was not "coming out of left field").

Even so, those previous rounds contained substantial airports, while this particular tranche did not, except for Recife's Guararapes Airport, which handled 8.16 million passengers in 2018 at a growth rate of +4.9%, which has increased to +5.9% in the first three months of 2019. It was the eighth busiest airport in Brazil in 2018, climbing one place.

Recife is the 'jewel' in this particular crown but with 8 million annual passenger numbers in 2018 it is less than half the size of AENA's domestic coastal Málaga Airport - the very small ones, Juazeiro do Norte and Campina Grande, have no direct comparison in Spain. It appears that while AENA may be the world's biggest airport operator with over 250 million passengers annually its 'Internacional' division certainly knows how to think small.