Airports Projects and Concessions

Airports Projects and Concessions
Rogério Coimbra
Secretary for Civil Aviation Regulatory Policy
May, 2013
Summary
I) BRAZILIAN CIVIL AVIATION
 Overview
 Main challenges
II) AIRPORT CONCESSIONS PROCESS
 Main features
 Past cases
 Future Cases
Secretaria de
Aviação Civil
Overview and Main Challenges
Brazilian Civil Aviation
Secretaria de
Aviação Civil
Major Brazilian Airports
PASSENGERS PER YEAR -2012
Secretaria de
Aviação Civil
Passengers - Infraero Airports
250
Average annual growth rate: 11,8% (2003-2012)
200
180
155
150
Million PAX
193
100
71
83
96
102
111
113
128
50
0
2003 2004 2005 2006 2007 2008 2009 2010
2011
2012
Source: Infraero
Secretaria de
Aviação Civil
Average Air Fare and Yield (2002-2012(1s))
700,00
1,00
0,90
600,00
0,80
500,00
0,70
0,60
400,00
0,50
300,00
0,40
0,30
200,00
0,20
100,00
0,10
0,00
Tarifa Média
Yield
2002
498,04
2003
550,90
2004
578,42
2005
556,34
2006
509,00
2007
372,80
2008
513,81
2009
370,80
2010
303,20
2011
282,67
2012 (1s)
272,64
0,82
0,90
0,85
0,84
0,77
0,56
0,76
0,55
0,40
0,36
0,35
0,00
* 1 US$ = R$ 2,00 (apr/2013)
Secretaria de
Aviação Civil
Average Load Factor
Source: ANAC
Secretaria de
Aviação Civil
Routes in Brazil
Demographic density in Brazil (2010) and
weekly available seats in regular flights
(2011).
Number of flights between city pairs and weekly supply of seats
Secretaria de
Aviação Civil
Brazilian Civil Aviation Main Challenges
Fast-growing air transport demand
 Dynamic and competitive sector
 Leading drivers: higher income and lower air ticket fares
 Brazilian air transport is still expanding and all forecasts point at this direction
 0.3 trip/inhab against 1.7 trip/inhab in developed markets (source: McKinsey&Co, 2010)
 FIFA World Cup (2014) and Olympic Games (2016)
Infrastructure must be aggressively expanded
 The increase in supply has not kept pace with the growth of demand
 Enhance service level (population’s claim)
 Meet the natural forthcoming demand (investments must triple the capacity by 2030)
To face these challenges the federal government has decided to:
 Open the market to private participation (airport concessions)
 Introduce competition in Brazil’s airport system
 Strengthen the Investment Program of Infraero
Secretaria de
Aviação Civil
Past Concessions
Guarulhos, Viracopos and Brasília
Secretaria de
Aviação Civil
Main objectives/guidelines of Brazilian airports concessions
I.
Fast addition of new capacity and increased levels of service.
II. Increased competition in the airport sector.
III. Maintenance of reasonable levels of tarifs.
IV. Strengthen Infraero as an efficient airport operator.
Secretaria de
Aviação Civil
Airport Concessions: latest cases
TIMELINE
RESULTS
Concession of Guarulhos
(GRU), Viracopos (VCP)
and Brasília (BSB) Airports
Secretaria de
Aviação Civil
Airports Concession Model
Illustrative
Consortium
A
Consortium
C
Consortium
B
Shareholders
Agreement
Private
shareholder
51%
Infraero
49%
Main characteristics
Concessionaire
• Concession
for
expansion,
maintenance and operation of
the airports
• Concession period: VCP (30 years)
BSB (25 years) e GRU (20 years)
Secretaria de
Aviação Civil
Airport Concessions: GRU - VCP - BSB
Object
INFRAERO’s
share
Revenues
 Build, Operate and Transfer
 ATC is not included
 49%
 Shareholders Agreement (pre-established)
 Aero and non-aero revenues
CAPEX
 Based on demand triggers and with initial investment
obligations
Transition rules
 An operational transition plan is set in the concession
agreement
Secretaria de
Aviação Civil
Airport Concessions: GRU - VCP - BSB
Basic concepts
Participation
Bidding process




Airports with a high level of CAPEX required
Meet the demand with a good service level (IATA Level C)
Competition and benchmarking in airport operation
Airport system financial viability




30% of passenger traffic
60% of cargo traffic
40% of Infraero’s revenues
20% of Infraero’s costs
 Brazilian or foreign entities can take part alone or in a consortium
 Proponents can bid for the 3 airports, but no proponent can win
more than one
 Airport operator technical requirement: 5 MM pax/year
 Minimum equity requirement: 10%




Criteria: highest economic proposal
1st phase: sealed-bid auction (envelopes)
2nd phase: open ascending price simultaneous auction
Payment divided throughout the concession length
Secretaria de
Aviação Civil
Economic Regulation Issues













Boarding fee
Connection fee (new tariff)
Landing and Parking fees
Cargo and Storage fees
Price-cap (non-discriminatory discounts are admitted)
Annually adjusted by IPCA (Brazilian CPI)
Adjustment rule: CPI – X – Q
Zero during the first 2 years
Pre-defined formula from the 3rd to the 5th year (-2.06% to +0%)
After the 5th year the regulator may review the methodology
One-off basis (non-cumulative effects)
Range: -7,5% to +2%
Measured through objective parameters and satisfaction survey
Ordinary
review



Do not change the tariff (non cost-based model)
Five-yearly public consultation process
Definition of X and Q factors methodology for the next 5 years
Concession fees


Fixed fee (result of the bidding process)
Percentage fee: share of the gross revenue annually paid
Tariffs
(dom-int diff.)
Basic rules
X factor
Q factor
Secretaria de
Aviação Civil
Future Concessions
Galeão and Confins
Secretaria de
Aviação Civil
Airport Concessions: next cases
Concession of Galeão
(GIG) and Confins (CFN)
Secretaria de
Aviação Civil
Major South American Airports
Source: ACI; 2010 data
Secretaria de
Aviação Civil
Same Concession Model
Illustrative
Consortium
A
Consortium
C
Consortium
B
Shareholders
Agreement
Private
shareholder
51%
Infraero
49%
Main characteristics
Concessionaire
• Concession
for
expansion,
maintenance and operation of
the airports
Secretaria de
Aviação Civil
Timeline
jan- abr
mai
jun
jul
ago
set
2013
Secretaria de
Aviação Civil
Rio de Janeiro International Airport (Galeão) - GIG
• The 2nd busiest Brazilian airport and the 2nd international gateway of Brazil
• The airport is located in the state of Rio de Janeiro, the 3rd most populated state of
Brazil and the 2nd highest GDP of the country.
• The airport is 20km far from Rio de Janeiro’s Central Business District .
• Important hub for domestic flights and for tourism
Secretaria de
Aviação Civil
Airports figures
Airport site: 17.881.696,63 m²
Galeão Airport (GIG)
Apron area: 712.895 m2
Total Passenger (millions) - Galeão
Boarding bridges:
20,00
18,00
16,00
17,49
2011-2012: 17%
14,95
14,00
12,00
11,14
10,00
12,15
11,83
12,28
- T1: 19 boarding bridge positions +
12 remote positions
- T2: 19 boarding bridge positions +
12 remote positions
- 15 cargo aircraft positions
9,01
8,00
6,00
CAGR = 15,8%
4,00
- Terminal 1 – 19
- Terminal 2 – 19
Aircraft parking:
2,00
Runways: (i) 4.000m x 45m
0,00
2006
2007
2008
2009
2010
2011
2012
Galeão
Passenger profile 2012 (thousand)
Dom
13.201.049
(ii) 3.180m x 47m
Passenger Terminals:
T1- 325.550m²
T2- 340.845m²
Parking: 4.310 parking slots
Cargo Terminal: 46.724 m²
Int
4.294.688
0
5.000.000
Cargo Movement: 114.097 ton
10.000.000
15.000.000
Employees: 1011
Secretaria de
Aviação Civil
Key financial figures
Exchange rate PTAX (April, 2013)
R$ 2,00 =1,00 US$
Galeão Airport (GIG)
Revenues (R$)
Total Revenues:
R$ 403 Millions
403 MM
160 MM
84 MM
Non-Aero Rev./Pax :
R$ 10,6
159 MM
EBITDA (R$)
89 MM
EBITDA
(% Net Revenue )
22,2 %
Total Revenue
Non Aeronautical
Storage
Aeronautical Revenues
EBITDA/Pax
Operating Costs
Personnel
19%
38%
43%
Contractual services
(third party)
Non Personnel
Operating Costs:
R$ 313 Millions
R$ 5,95
EBITDA/Employee
R$ 87.944,66
Secretaria de
Aviação Civil
Galeão – Demand Forecast
Pax/year
2012
2022
2032
2042
Galeão
17.495.737
31.750.849
49.725.180
68.978.123
80
69,0
60
Millions
49,7
40
31,8
20
17,5
0
2012
2022
2032
2042
Secretaria de
Source: SAC-PR
Aviação Civil
Belo Horizonte International Airport (Confins) - CNF
• Confins International Airport is the 5th busiest Brazilian airport.
• The airport is located in the state of Minas Gerais, the 2nd most populated state of
Brazil and the 3rd highest GDP of the country.
• The airport is 40km far from the city of Belo Horizonte, the capital of Minas Gerais.
Secretaria de
Aviação Civil
Airports figures
Confins Airport (CNF)
Airport site: 15.010.000,00m²
Apron area: 211.437 m2
Total Passenger (millions) - Confins
12,00
Boarding bridges: 09
2011-2012: 9%
10,39
10,00
9,53
8,00
- Parking 1: 09 boarding bridge positions
+ 09 remote positions
7,24
6,00
4,00
4,25
3,60
4,85
Aircraft parking:
5,55
CAGR = 20%
2,00
- Parking 2: 07 general aviation positions
+ 1 helipad
- Parking 3: 03 cargo aircraft positions
0,00
2006
2007
2008
2009
2010
2011
2012
Confins
Passenger profile 2012(thousand)
9.952.684
Dom
Runway: 3.000m x 45m
Passenger Terminal:
T1 - 53.949,70m²
Parking: 2005 parking slots
Cargo Terminal: 7.212 m²
445.612
Int
0
2.000.000 4.000.000 6.000.000 8.000.000 10.000.00012.000.000
Cargo Movement: 24.253 ton
Employees: 299
Secretaria de
Aviação Civil
Key financial figures
Exchange rate PTAX (April, 2013)
R$ 2,00 =1,00 US$
Confins Airport (CNF)
Revenues (R$)
Total Revenues:
R$ 139 Millions
53 MM
139 MM
17 MM
Non-Aero Rev./Pax:
R$ 5,6
69 MM
EBITDA (R$)
52 MM
EBITDA
(% Net Revenue )
37,2%
Total Revenue
Non Aeronautical
Storage
Aeronautical Revenues
EBITDA/Pax
Operating Costs
Personnel
12%
50%
38%
Contractual services
(third party)
Non Personnel
Operating Costs:
R$ 87 Millions
R$ 5,43
EBITDA/Employee
R$ 173.913,04
Secretaria de
1- Source: INFRAERO, 2011
Aviação Civil
Confins: Demand Forecast
Pax/year
2012
2022
2032
2042
Confins
10.398.296
20.910.421
33.618.650
47.484.943
50
47,5
40
Millions
33,6
30
20,9
20
10,4
10
0
2012
Source: SAC-PR
2022
2032
2042
Secretaria de
Aviação Civil
Future Concessions: Characteristics
• Technical Requirements:
• Airport operator technical requirement: 35 MM pax/year
• Operator must hold at least 25% shareholding in the consortium
• Infraero’s share : 49%
• Auction Criteria: highest economic proposal (fixed fee to be paid
annually)
• Percentage fee: share of the gross revenue annually paid to the
Government
• More details soon in the draft documents:
• www.aviacaocivil.gov.br
• www.anac.gov.br
Secretaria de
Aviação Civil
Questions?
Thank You!
Rogério Coimbra
[email protected]
Secretaria de
Aviação Civil