Brazil celebrates the results of airports auction

The Brazilian National Civil Aviation Agency auctioned two of the busiest airports of the country this Saturday for the sum of BRL 20.838 billion.

Galeão is the international airport of Rio de Janeiro, and is responsible for transporting 17.5 million passengers every year. Confins, its counterpart in Minas Gerais, is responsible for 10.4 million passengers every year. Together, they account for 14% of the national air traffic, 10% of the cargo and 12% of the airplanes in traffic in Brazil.

The auctioning process of both airports was announced by the government in December 2012. Other important airports have already been auctioned as part of the National Plan of Denationalization, like Guarulhos and Viracopos airports (Sao Paulo), São Gonçalo do Amarante airport (Rio Grande do Norte) and Brasilia airport (Federal District).

Among the requirements to participate, the minimum bid was BRL 4.828 billion for Galeão airport and BRL 1.096 billion for Confins airport. The consortium had to have amongst its participants an operator with management experience of a 22 and 12 million-passenger-flow airport for Galeão and Confins respectively. Also, the State company responsible for the federal airports Infraero would have 49% participation in the winning consortium.

The expectations raised as some remarkable names confirmed their participation in the auction, such as Odebrecht, Queiroz Galvão, Anatran, and international operators such as Fraport AG (Frankfurt) and Schiphol (Amsterdam).

The results exceeded the expectations

The winner of Galeão airport was Aeroportos do Futuro Consortium, formed by Odebrecht (60%) and Changi (40%). Singapore Changi Airport, operatad by Changi, was rated the world’s best airport for the fourth time at the 2013 World Airport Awards. The awards are based on feedback of airport customers from around the world and this year the survey totaled 12.1 million responses. The consortium will pay BRL 19.018 billion to the Federal Government.

Confins airport will be managed by AeroBrasil Consortium, formed by CPC (75%) – Companhia de Participações em Concessões –, Zurich Airport International (24%) and Munich Airport International Beteiligungs GMBH (1%). Both Zurich’s and Munich’s airports are among the most modern airports in the world. The bid to be paid to the government is BRL 1.82 billion.

Overview of the auctionPoliticians celebrated the results

President Dilma stated her satisfaction about the results: “With [the concession of] these two airports, the federal government will collect about 20 billion reais in contributions. This shows two things: first, the enormous interest shown by investors for investing in Brazil; second, it clearly shows that Brazil continues to be a country of great opportunities for Brazilians, who should be proud of what we have and what may come to be”. Dilma also mentioned that this auction reaffirms the large interest of foreign investors in Brazil.

Other politicians also demonstrated to be very pleased with these results. Minister of the Secretariat of Civil Aviation (SAC), Moreira Franco stated that “the outcome of the auction was exceptional. It proves the country has achieved balance and has attracted enormous interest from foreign investors.”

Transition phase to be initiated in March 2014

The signing of the contracts is scheduled for March 17th, 2014. As from the date of this signing ceremony, a 120-day transition phase will be initiated, in which Infraero will keep managing both airports, accompanied by the consortium. Next, the consortium will start to take over the managing responsibilities, still together with Infraero for three months (extendable for another three months). Only after that, the winning consortiums will have full control of the airports operations.

Innovation Norway is responsible for promoting the Norwegian industry abroad. Our office in Rio de Janeiro manages Innovation House Rio, our business incubator office, and helps Norwegian companies in their efforts towards the Brazilian market.

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2 comments on “Brazil celebrates the results of airports auction

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