Infrastructure - Brazil - Brazil's Infraero should be shut down, say consultants

While Brazil's civil aviation minister Eliseu Padilha has recommended a restructuring of state-run airport operator Infraero, some local consultants believe that it should be shut down altogether. After outsourcing profitable airports in 2012-13, Infraero is left operating less lucrative ones. These airports should be handed over to the private sector in hopes of turning things around, says Wilson Maciel Ramos, co-owner of local management consulting firm Mithras Consultoria e Participações. "The airports should be concessioned out to the lowest bidder with civil aviation department SAC acting as contract administrator. With this, the country would see huge economic benefits and an increase in efficiency," Ramos told BNamericas. The current state of the aviation industry in Brazil is very confusing and the government is going around in circles, says aviation industry consultant Peirre Bernstein. "Although I'm in favor of closing down Infraero, I can't see any private party that would actually risk taking over Infraero's responsibilities right now," Bernstein told BNamericas. Infraero posted a 1.22bn-real (US$395mn) record loss in 2013. According to aviation minister Padilha, some type of restructuring of the operators needs to happen before the next round of airport concession tenders. Brazil's six airport concessions are Guarulhos and Viracopos (São Paulo state), Galeão (Rio de Janeiro), Confins (Minas Gerais), São Gonçalo do Amarante (Rio Grande do Norte), and Brasília. Infraero currently holds a 49% share in the special purpose companies operating these airports. Upcoming airport concessions are expected in the state capitals of Porto Alegre (Rio Grande do Sul), Salvador (Bahia), and Florianópolis (Santa Catarina). Considered the third largest airport operator in the world, Infraero handles 112mn passengers a year. The Brazilian air travel market is expected to grow 7% annually over the next two decades. [GRAFICO:FIGURA:ID_833] var grafico = '{"colors":["#001b96","#f78e1e","#181818","#8ec4fb","#fabb78","#2577cb","#d9d9d9","#1281b4","#7d7d7d","#3349ab","#0f648b","#343434"],"chart":{"renderTo":"chart_plotted","type":"bar"},"xAxis":{"categories":["São Paulo (Congonhas)","Rio de Janeiro (Galeão)","Belo Horizonte (Confins)","Rio de Janeiro (Santos Dumont)","Salvador (Deputado L. E. Magalhães)","Porto Alegre (Salgado Filho)","Recife (Gilberto Freyre)","Curitiba (Afonso Pena)","Fortaleza (Pinto Martins)","Florianópolis (Hercílio Luz)"]},"yAxis":{"title":{"text":"Number of passengers"}},"series":[{"data":[17119530,17115368,10301288,9204603,8589663,7993164,6840276,6742133,5952629,3872877],"name":"No. of Passengers (2013)","_colorIndex":0}],"title":{"text":"2013 full-year data for airports under Infraero management"},"subtitle":{"text":"(excludes Brasília, Guarulhos, Viracopos - awarded to private sector in 2012)"},"credits":{"text":"Source:","href":"","style":{"fontSize":"11px"}},"exporting":{"enabled":true}}'; var json_grafico = JSON.parse(grafico); json_grafico.chart.renderTo="graficodiv833"; var graficarlo = new Highcharts.Chart(json_grafico);

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