Auction of 22 airports in the 6th round generates R$ 3.3 billion in initial contribution

The 22 airports auctioned by the National Civil Aviation Agency (ANAC) on April 7 were bought for an additional R$ 3.1 billion over the total minimum bid of R$186.1 million. The average premium of the proposals reached 3,822.61%.

The auction of the 6th concession round was the second with airports grouped in blocks. In total, the winning bids of the South, Central and North blocks yielded R$ 3.3 billion to the Federal Government.

The 22 airports will be granted to the private sector for a period of 30 years. Under normal conditions of demand and supply, the airports together process about 11% of total passenger traffic, equivalent to 24 million passengers per year (2019 data). By round five, 67% of all national traffic had already been awarded to private operation.

The South Block, composed of the airports of Curitiba/PR, Foz do Iguaçu/PR, Navegantes/SC, Londrina/PR, Joinville/SC, Bacacheri/PR, Pelotas/RS, Uruguaiana/RS, and Bagé/RS, was bought by the Company for R$ 2.1 billion, with a premium of 1,534.36% in relation to the minimum initial bid of R$ 130.2 million.

Comprised by the airports of Goiânia/GO, São Luís/MA, Teresina/PI, Palmas/TO, Petrolina/PE and Imperatriz/MA, the Central Block was also won by Companhia de Participações em Concessões, with a premium of 9,156.01% compared to the minimum initial bid of R$ 8.1 million. The block of 6 airports was sold for R$ 754 million.

The North Block, composed by the airports of Manaus/AM, Porto Velho/RO, Rio Branco/AC, Cruzeiro do Sul/AC, Tabatinga/AM, Tefé/AM and Boa Vista/RR, was bought by Vinci Airports. The company paid R$ 420 million for the 7 airports of the block, with a premium of 777.47% in relation to the minimum initial bid of R$ 47.8 million.

The auction of the 6th round of airport concessions was held at B3, in São Paulo, and was attended by seven qualified bidders. The auction started at 10am and was concluded 40 minutes later, with no bids being submitted in the open outcry. Check out, below, the list with all the bidders who participated in the auction of the 6th round of airports concession.

The result of the 6th round of airport concessions signals the correctness of the auction modeling, developed by ANAC based on the guidelines established by the Federal Government. “I was very happy with the participation of the groups that are here, all qualified, all cutting edge, all with a good track record in the infrastructure of Brazil and the world. Within our civil aviation growth strategy, the investment in airport infrastructure is fundamental. It is obvious that it is also necessary to have regulatory flexibility, and we are working on this, that it is necessary to have open skies agreements and act on the issue of fuel prices, but infrastructure is fundamental,” said the Minister of Infrastructure, Tarcísio Freitas.

ANAC’s Director-President:, Juliano Noman, also celebrated the result. “I am convinced that we are delivering the best concessions program. We have achieved very successful results. The moment is one of opportunity with the injection of robust investments that will contribute to the economic recovery of the country and the airline industry, as well as the improvement of the Brazilian infrastructure, the access to air transportation and the generation of jobs,” said the Director-President of ANAC, Juliano Noman.

For the Agency’s head, the airport concession program has been constantly recognized for the improvements implemented. “Each airport and each location were studied individually to ensure safety, predictability and soundness. We are creating an efficient regulatory agenda with significant advances in recent years and the 6th round is definitely a part of this effort,” he added.

News in the public notice

Among the regulatory improvements in the 6th round, there was the exclusion of the requirement of economic feasibility certification by a financial institution. It was also clarified, in the draft contract, the compensation due in the case of termination. In the event of early termination of the contract, the concessionaire will be compensated for the present value of frustrated future profits and for unamortized portions of investments made during the concession.     

Also included as an improvement in the 6th round was the figure of the technical assistant, who may be hired by the winning bidder to provide support to the operations of each of the airport blocks. The difference in relation to the previous modeling is that this agent, who must demonstrate the minimum experience for airport operations required in the call for bid, does not need to be the bidder or enter into a consortium with it. If a technical assistant is chosen, it will be known on the day of the auction and its participation must be through a support contract signed with the winning bidder, who is responsible for the concession.

Qualification and homologation        

The next step in the auction, was to deliver the qualification documents to the winning bidders. The signing of the concession contracts occurred after the homologation of the result by ANAC’s Board of Directors. Check out the next steps:

Variable Contribution

In addition to the initial contribution to be paid at the signing of the contracts, the new concessionaires must also pay a variable fee on gross revenues, established at increasing percentages calculated from the 5th to the 9th year of the concession, becoming constant from then on until the end of the concession (see below for information on each block). It is a mechanism to adapt the contracts to the demand and revenue oscillations during the concession.

The projected values for the contracts contemplate an estimated revenue for the entire concession (22 airports over 30 years) of R$ 14.5 billion, of which R$ 7.4 billion for the South Block, R$ 3.5 billion for the Central Block and R$ 3.6 billion for the North Block. 

Investments and improvements

The new concessionaires of the 22 airports auctioned on Wednesday will make investments of around R$ 6 billion during the 30 years of the concession. According to the Technical, Economic and Environmental Feasibility Studies (EVTEAs), the estimated investments per airport block will be R$ 2.86 billion for the South Block, R$ 1.8 billion for the Central Block and R$ 1.48 billion for the North Block.

Within 36 months from the effective date of the contract (Phase I-B), all 22 airports awarded in the 6th round will have to make the necessary investments in the current infrastructure to provide adequate service to users. In addition to specific investments defined according to the characteristics of each airport, the new concessions will have to adapt their capacity for processing passengers, baggage and parking vehicles; observe minimum specifications for airport infrastructure and service quality indicators.