Summary:
- Another Brazilian (small) airport concession procedure has been initiated, but this one includes Rio de Janeiro and São Paulo airport prize;
- Infraero's does appear numbered with the Brazil's new president Jair Bolsonaro talking about plans to "terminate" the airport operator;
- Santos Dumont and Congonhas airports are regarded as the remaining 'jewels in the crown' but after that there simply aren't any.
The ripe low hanging fruit has already been picked, and the smaller and more provincial an airport is, the less the interest in it from foreign investors is likely to be. Brazil is running out of attractive anchor airports to be the lead attraction in a 'block' of airports, none of which otherwise put through as many as one million passengers annually. However, there is a twist in this particular tale, in that for the first time Rio de Janeiro's Santos Dumont Airport and São Paulo's Congonhas Airport are included.
Both have been slated for inclusion in the concessions programme previously, in the third tranche, together with airports in big cities like Fortaleza and Porto Alegre, but Santos Dumont was to have been bundled with a host of relatively underperforming airports.
The economic decline which has blighted Brazil in recent years cast doubt on the deal and then the decision was taken to exclude Santos Dumont altogether and leave it with state operator Infraero, apparently on the grounds that without that asset Infraero would have no profitable ones at all.
A similar set of circumstances applies to Congonhas which was left off the list entirely for the previous round, partly because of "technical issues" and partly, again, because including it would complicate the financial situation of Infraero. There may have been some political shenanigans as well, involving the previous administration.
But new brushes sweep clean and Mr Bolsonaro is doing just that. He seems to have written off Infraero. In a local media interview in Dec-2018 he said he intends to grant the entire network of Brazilian airports to concessionaires within three years (not all of them are owned by Infraero by any means) and then to "terminate" Infraero.
READ MORE... Find out more about the major airports set to drive this latest concession procedure.
Brazilian airport concessions: Rio and São Paulo to be included
Both Santos Dumont and Congonhas are regarded as the remaining 'jewels in the crown' but after that there simply aren't any. With 9.2 million passengers in 2017 Santos Dumont is only just outside the top 15 busiest airports in Latin America, the seventh busiest in Brazil and it has more than half the passenger traffic of the more distant Galeão airport, which is 20km from downtown, to the north.
Almost half of its capacity is to and from Congonhas, which is a sort of 'sister' airport as it is also São Paulo's second airport, equally occupying an inner city position, some 8 km south of downtown. Guarulhos, Brazil's busiest airport and Latin America's second busiest (and already subject, like Galeão, to an earlier concession procedure) is about 15 km to the northwest.
The problem with Congonhas is the heavy urban density surrounding the airport, which is on a par with that at Lisbon's Humberto Delgado and Chicago's Midway airports. As a result, Congonhas is restricted to 30 operations per hour with narrow body aircraft and cannot serve international destinations. It also has a 23:00 - 06:00 curfew.
The inclusion of these airports will attract foreign investors but the news of yet more problems arising from a previous concession will not. BH Airport, the concessionaire at the Belo Horizonte Tancredo Neves Airport has advised that consortium member Flughafen Zurich will surrender its share in that airport if the city's Pampulha Airport - administered by Infraero - is reopened unrestrictedly as the current passenger volume makes it economically unviable for Belo Horizonte to have two airports.