Brazil privatises three airports

The Brazilian Government privatised operations at three of the nation's main airports this week, awarding US$14 billion ($16.8 billion) in contracts to three consortiums that will expand and run terminals amid demand ahead of the 2014 World Cup.

Improving airports plagued with bottlenecks, long lines and poor infrastructure was a key promise the Government made in its winning bid to host soccer's premier event. Hundreds of thousands of fans will fly between the 12 host cities for matches.

Brazil's airports have buckled under demand that tripled in the past decade. In 2002, airlines flew 34.3 million passengers on flights originating in Brazil. That rose to 107.8 million last year, Brazil's civil aviation agency reported.

The Government is also expected to auction the rights to run other airports, including Rio de Janeiro's international airport.

Infraero, the state-run agency, retains a 49 per cent stake in the privatised airports, which include the nation's busiest airport in Sao Paulo, along with those in Brasilia and in the city of Campinas in Sao Paulo state.

Together, the three airports are responsible for 30 per cent of Brazil's passenger traffic.

The 20-year contract to operate Sao Paulo's Guarulhos International Airport was won by the Invepar consortium, 90 per cent of which is controlled by Brazil's Investimentos e Participacoes em Infraestrutura SA with the rest in the hands of the Airports Company South Africa.

Completing work on new terminals before the 2014 World Cup is the main challenge for the three consortiums. They will be fined US$87 million plus US$875 million for each day they are late after the cup begins.

Demand for flights in Brazil triples, airports strained before Olympics, World Cup

DEMAND for flights to Brazil has nearly tripled in the past decade, with a strained system that is under pressure to prepare for the 2014 World Cup and 2016 Olympics.

Brazil's civil aviation agency said demand for air travel rose 194 percent in 10 years. Demand in 2011 alone increased 16 per cent over the previous year.

In 2002, airlines flew 34.3 million passengers on flights originating in Brazil. That rose to 107.8 million last year, the agency reported.

While airlines are enjoying the boom, air travelers are suffering from packed airports, jumps in ticket prices, and routine delays often caused by woeful airport infrastructure, from poor runways to problems with radar systems that air control operators rely upon.

At least seven airports in the nation require substantial work to make improvements Brazilian officials promised in winning the right to host the 2014 World Cup and 2016 Olympics. The work on the airports is expected to be the most expensive part of Brazil's preparations for the events.

Officials have said the total investment on airport upgrades has jumped from 5.5 billion reals (A$3.01 billion) at the beginning of 2011 to 6.4 billion reals ($3.7 billion) by the end of the year.

The government has said all airport upgrades will be finished in time for the World Cup, but none will be fully ready before the Confederations Cup to be held in 2013, the important warmup tournament for the World Cup.

Government officials previously said that five airports were expected to be ready by June 2013, when the Confederations Cup begins, but acknowledged recently that none will be completed by then. Among the key airports being upgraded are those in Sao Paulo and Rio de Janeiro.