Brazil moving forward with Airport Privatizations

The dire situation in the airline industry in Latin America, highlighted by Latam Airlines' bankruptcy protection request this week, had no impact on the Brazilian government's plan to offer concessions for 43 airports.

"We are talking about 30-year concession contracts, the coronavirus crisis will be overcome in the short term, people will resume their flight plans and the global investor wants to invest in long-term assets," said Minister of Infrastructure Tarcísio. Gomes de Freitas. at a press conference.

Airlines were hit hard by the coronavirus, with passenger numbers dropping sharply.

In April, domestic passengers in Brazil totaled 399,558 passengers, compared to 7.3 million in the same period in 2019, according to the civil aviation agency Anac.

"The aviation sector in Brazil is closely linked to the national service sector, and not to the railway and port sectors, which are more closely linked to the transportation of goods, so it tends to recover very slowly," said Allemander Pereira Filho, director aviation consultancy Aircon and former director of Anac, to BNamericas.

Earlier this month, Colombian airline Avianca also filed for bankruptcy protection.

Latam Airlines' bankruptcy filing covers the company's units in Chile, Peru, Colombia, Ecuador and the United States. Units in Argentina, Brazil and Paraguay are not included.

In Brazil, the company is talking to the development bank BNDES to organize financial support, but the government considers the difficult scenario for airlines to be temporary.

"So far, we are calm with the situation of the airlines," stated Freitas.

"When a company does this [asks for bankruptcy protection], it freezes its debts and starts a discussion with its creditors. Therefore, it can cancel contracts that are not important for operations. This is something that we are watching and in Brazil not yet it happened because companies trust the resources available through BNDES. The situation is under control. "

The bank is working on the final details of a financial package to support the main airlines operating in Brazil, namely, Latam, Azul and Gol.