ALTA: Brazil learns lessons from criticised airport deals

Panama City
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Brazil's civil aviation agency (ANAC) chief says that lessons have been learnt after the high bids accepted in the recent airport privatisations came in for criticism from industry bodies including IATA.

The agency's award of long-term concessions of the Brasilia, São Paulo Guarulhos and Viracopos-Campinas airports to private consortiums earlier this year was flagged by IATA director general Tony Tyler as a concern during his address at the ALTA Airline Leaders Forum in Panama City.

"Auctioning the concessions garnered some $14 billion for the Brazilian government - many times the minimum bid," he says. "Safeguards were not put in place to ensure that the new owners recover their investment through efficiency gains and traffic growth, rather than by raising non-aeronautical fees which are monitored but not capped."

"It is important that the Brazilian government absorb the lessons of this experience as it moves forward on the next round of airport concessions," adds Tyler.

The next round of concessions is expected to include the international airports in Belo Horizonte and Rio de Janeiro. Claudio Passos Simao, acting president director of ANAC, says that in this round of bidding emphasis will be placed on increasing the level of service at the facilities and not just the highest economic proposals, based on the agency's experience from the first round of concessions.

Airports in Brazil handle 108 million movements annually and this is expected to more than double to 240 million annually by 2014.

"The numbers in Brazil are huge," says Simao. "The objective of Brazil [airport development] is not [to be ready when it hosts] the World Cup in 2014 and the Olympics in 2016. It's today."

Angela Gittens, director general of Airports Council International, says that a number of the fastest growing airports in the world are in Brazil, including those in São Paulo and Rio de Janeiro.

ANAC's long-term plan is to triple investment and airport capacity in Brazil by 2030, says Simao. This includes improving the quality of service provided and meeting the demands of the Brazilian population.