On Thursday, the Brazilian government held the seventh round of airport privatizations, and São Paulo Congonhas Airport (CGH), one of the most important hubs in the country, was adjudicated. Aena, the Spanish airport operator, won the bid of Congonhas and ten additional airports and will pay €468 million to administrate these hubs for the next 30 years.

Congonhas auctioned

Brazil has been privatizing its airports since 2012 to speed up the modernization of the transport infrastructure (last year, it auctioned 22 regional airports). This year, the country held the seventh round of privatizations, which included Congonhas International Airport, the second most important domestic hub in Brazil (339.2 million passengers since 2000, only surpassed by Guarulhos International Airport).

The Brazilian government divided this round into three blocks. In the first block, it included Congonhas and these airports: Campo Grande, Corumba, Ponta Pora, Santarém, Marabá, Paraupebas, Altamira, Uberlândia, Uberaba, Montes Claros, and Minas Gerais. The second block included two small airports better suited for private aviation, Campo de Marte and Jacaperaguá, and the third block was composed of the Belém and Macapá airports. The first block was clearly the most commercially attractive.

Congonhas Airport is located in the State of São Paulo, an area of 248,219 km², approximately 50% the size of Spain. This State has a population of 46.3 million, similar to that of Spain or Argentina, twice that of Chile, or four times that of Portugal. In 2022, Congonhas has had 7.79 million passengers (it does not have international operations), recovering 71.86% of the domestic traffic it had in 2019, prior to the COVID-19 pandemic. It has commercial services from LATAM Airlines Group, Azul Linhas Aéreas, GOL Linhas Aéreas, and Passaredo, according to Cirium.

A plane prepares to land at Congonhas Airport, in Sao Paulo, Brazil
Aena won the auction to operate Congonhas Airport in Brazil (here pictured with two GOL Boeing 737 aircraft). Photo: Getty Images.

Aena, the new operator

Aena, the Spanish airport operator who handles 48 airports in the European country (including Madrid Barajas and Barcelona-El Prat), was the winner of the auction. This company already manages six airports in the northeast Brazilian region, meaning it will operate a network of 17 airports in Brazil and will become the manager of the country's largest network of concessioned hubs.

Chairman and CEO of Aena, Maurici Lucena: "Despite the hard times we have gone through because of COVID-19, and always with the priority of generating value for public and private shareholders and employees, we are convinced that the internationalization of Aena is a guarantee for the future. Brazil's potential is indisputable. Its domestic traffic, for example, is 100% recovered".

What’s next?

To acquire the 11 airports, AENA paid approximately €468 million during the public auction. AENA expects to sign the contract to administrate these airports in February 2023, and the concession period will last 30 years, with the possibility of five more. Moreover, the airport operator expects to invest around 5 billion reais in these airports (approximately US$1 billion).

Between 2011 and 2021, the airport concession program in Brazil has awarded the equivalent of 75.82% of national traffic to private companies. With the latest auction round, this percentage will reach 91.6% of passengers served at the now privatized airports.

Brazil is now near the end of this series of auctions to privatize its main airports. Nonetheless, there are two top hubs expecting to be privatized. Rio de Janeiro’s Santos Dumont Airport (SDH) will be auctioned separately (it was previously included in the Congonhas Airport's block). Additionally, the concessionaire of Rio de Janeiro’s second airport, Galeão International (GIG), announced earlier this year it will return its concession due to the low passenger volumes during the pandemic. The contract for the concessionaire, RIOGaleão, controlled by Singapore's Changi Airport, was valid until 2039. This forced the Brazilian government to launch an eighth and final auction. “As we create the eighth round, we will have the same operator for Galeão and Santos Dumont. This resolves a series of issues and removes a series of concerns that were being expressed by the productive sector in Rio,” infrastructure minister Tarcísio Gomes de Freitas said in a statement.