Brazil’s government is taking action on several fronts with the aim of ensuring strong investor interest in this year’s concessions of airports amid doubts about the sector’s full recovery.

According to sources consulted by BNamericas, Brazilian infrastructure firm CCR, investment fund Patria and European airport operators Vinci Airports, Aena, Fraport and Flughafen Zürich have shown interest in the upcoming auctions.

As part of the efforts to drum up investor interest, civil aviation authority ANAC approved 69.9mn reais (US$15mn) in financial support for BH Airport, the operator of the Confins airport in Minas Gerais state.

The support will come in the form of a reduction of the annual fee that the operator pays to the government, ANAC said in a statement. Since last year the government has offered financial support to various airports operators as a way to keep investors interested in this year’s auctions of airport concessions.

“The airport sector was the most affected by the pandemic, with a large reduction in passenger demand that will likely take a long time to return to pre-pandemic levels. On the other hand, it was also a sector where the government adopted mechanisms to mitigate the problems,” João Cortez, a partner at infrastructure-focused advisory firm Vallya, told BNamericas.

The number of passengers transported through the country’s airports on domestic flights totaled 5.57mn in February, down from 7.47mn in January, according to ANAC. The February number remained well below the 7.67mn that was recorded in February 2020, before the pandemic started.

During the first half of this year, the government is planning to hold auctions for the concessions of 15 airports, all focused on serving domestic flights, with expected investments of 7.3bn reais. The airports will be offered in three blocks, combining more profitable terminals with less profitable ones.

Another mechanism that the federal government is adopting to maintain the attractiveness of this year’s auctions is authorizing the same company or consortium to make offers for all blocks.

“From my perspective, the airport model is being handled well and the fact that it accepts operators that already have airports in Brazil should make the [auctions] competitive as they seek to consolidate their position in the Brazilian market. Especially as it involves one of the busiest airports in the country [Congonhas],” Paulo Dantas, an infrastructure and project finance specialist at law firm Castro Barros Advogados, told BNamericas.

Congonhas, in the city of São Paulo, is one of the 15 airports to be offered.

https://www.bnamericas.com/en/news/brazil-takes-action-to-attract-investors-to-airport-concessions