Aena privatisation moves closer to reality

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Spanish airport operator Aena’s long-awaited partial privatisation has moved a step closer to reality after a recent study carried out by Spain’s privatisation watchdog gave the green light for up to 60% of Aena to be sold off.

The report, which was carried out by Spain’s Privatisation Consulting Council (CCP), advises the Spanish Government to seek between three and five core investors to acquire 20-30% of the shares of Aena Aeropuertos.

Once this core group of investors has been found, a flotation of additional shares could eventually see as much as 60% of Aena being sold into private hands.

Spain has been attempting to privatise Aena for several years. However, the country’s government in January 2012 reversed plans by the previous administration to put 90.5% stakes in Madrid Barajas and Barcelona El Prat up for sale, citing “unfavourable” market conditions.

In order to make Aena more attractive to potential buyers, recent declines in traffic – particularly at Madrid Barajas – will need to be addressed. Spanish airlines, most notably Iberia, have been slashing capacity in response to a dire economic situation and severe overcapacity in the market.

In addition to this, Aena announced last year that it was increasing airport fees by an average of 10%, a plan which appears to have backfired somewhat.

Liberum Capital transport analyst Gerald Khoo points out that while Aena likely “jacked up its charges to help prepare for privatisation”, it “forgot that there would be a volume effect”.

“The increase in airport charges was deeply unhelpful to all airlines,” says Khoo, adding that “the reaction of airlines was to increase fares, but they then had to reduce capacity in reaction to that”.

In an effort to turn this situation around, Spanish public works minister Ana Pastor recently announced that passenger tariffs would be dramatically cut in 2014 and 2015 for airlines that could sustain or grow passenger numbers to and from Spanish airports.

From 1 January 2014, Aena will halve charges for airlines that sustain passenger numbers over the course of the year, and fees will be cut by an additional 25% in 2015 if this trend continues.

No date has yet been set for the privatisation of Aena, although it is understood that the Spanish government aims to get things moving early next year.