Campinas and Santiago airport concessions – airports need to discuss facilities with their airlines

One of the biggest challenges Latin American airlines face is high airport charges. But there are small movements in the right direction occurring in the region, and an opportunity for valuable lessons learned, if governments are willing to listen.


Summary:

  • One of the biggest challenges Latin American airlines face is high airport charges, but there are small movements in the right direction occurring in the region;
  • Chile’s government has agreed with the airport operator of Santiago International airport to review the concession contract for the facility;
  • Meanwhile, in Brazil the operator of Brazil’s Campinas Viracopos airport recently filed for bankruptcy protection;
  • Azul, the largest carrier at Campinas, notes if the operator had talked more closely there would have been a much clearer picture of what was needed at the airport.

On the positive side, Chile’s government has agreed with the airport operator of Santiago International airport to review the concession contract for the facility.  At the recent CAPA Latin America Aviation & LCCs Summit, IATA Regional VP of the Americas Peter Cerda remarked that there is hope improvements can be made to the concession contract to bring costs down, improve efficiency and offer better service to the customer.

As Santiago appears to be working to find a win-win scenario for the airport concession contract, the operator of Brazil’s Campinas Viracopos airport recently filed for bankruptcy protection. Aeroportos Brasil won the concession for a 51% stake in the airport during 2012, and sought creditor protection in May-2018.

CHART – Azul is the largest operator at Campinas Viracopos by capacity, representing 93% of the airport’s seatsSource: CAPA – Centre for Aviation and OAG (data: w/c 15-Oct-2018)

During the conference Azul’s Chief Revenue Officer Abhi Shah offered some insight into the concessioner’s approach, noting that the “operator wanted to build a Frankfurt or Amsterdam, and frankly, what we needed is what Copa has in Panama”.

He explained that one key lesson from the Campinas situation is that if the operator had talked more closely with Azul, there would have been a much clearer picture of what was needed at the airport. For example, Mr Shah remarked that the airport had gates equipped to handle the Airbus A380. “I don’t see A380s there for a long time”, he stated.

The upside is there is plenty of space for Azul to grow, and the airport provides a good experience for the customer, said Mr Shah.

Those are two examples of hope for collaboration between airlines and airports in Latin America, and a valuable lesson for the perils of airport concessionaires not engaging with key stakeholders.

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