» Aena Privatisation: Competition disagrees, Ryanair interested

As soon as the Aena privatisation was definitely confirmed by the Minister many thoughts, interpretations and declarations have appeared in the Spanish media. Since this is something that we have been following very closely, we have extracted some pieces of news which may be relevant to the subject.

The National Competition Commission disagrees
First of all, ElMundo.es published a thorough article informing that the Spanish Competition Commission is not happy with the privatisation as it has been planned by the Government. In their view, it will not benefit the industry to keep the airport net monopoly. For Competition it would be better to separate Aena in lots, but this is something that the Ministry of Development has declined. In the Commission they think that the competition would be blocked with this proposal and remind this market had incomes by 2,925 million Euros in 2013.

The airport charges are the main reason for confrontation in the industry. The increases of 2012 and 2013 produced complaints from the airlines which ended in Brussels. Now that the airport charges will be watched by Competittion they have been frozen, perhaps for the next year too.

The counter-proposal was to separate Aena in lots, with Madrid in one lot and Barcelona in the other. Sources close to Aena explained that “otherwise the only benefit of this operation may be for the State and for the investors, but not for the industry”.

However, the Minister of Development—Ana Pastor—is clear on the fact that all 47 airports will be sold as a whole or will not be sold at all. Even in the case that a public monopoly becomes a mixed monopoly.
A senior Ministry official explained that “the company’s strength is to operate as a net. Some airports are compensated with the others. The investors would be interested in managing only the profitable airports, but that is against the general interest”.

Even with a 12,000 million Euros debt, the airport net became profitable in 2013. In general, the accounts for all 47 airports have improved through strong cuts in costs, less investments and airport opening time reductions. Out of 47 airports, 14 were profitable in 2013 (they were only 8 in 2012) with incomes by 731 million Euros. The other 33 airports had a 151 million Euros loss.

In the Ministry, they understand that the private investors would intend to close those loss-making airports. That is the reason why they think the airport net and its qualification as General Interest Infrastructures will be protected.

However, some autonomous governments disagree with the Government of the State. For example, in the Canary Islands they are aware of the fact that the smaller airports like La Gomera or El Hierro are not profitable. For that reason the local Government admitted to be willing to go to courts with the Aena’s privatisation. For different reasons, the Government of Catalonia would do the same thing. In their case that would be in order to be able to manage Barcelona airport and its incomes.

Meanwhile, in Aena, the Competition Comission’s point of view is considered to be a theoretical exercise which ignores the reality of the autonomous regions. A member of the Aena’s board said “it would be unsustainable to combine the interests of the Galician airports with the ones in the Canary Islands or Andalusia. But, at the same time, it would be unsustainable to have them in competition”.

Ryanair is interested
Immediately after the Aena’s Privatisation confirmation Expansion.com informed that Ryanair confirmed their interest. Peter Bellow—Sales Director—confirmed the airline is very interested. In particular, they would like to get the 21% intended for the stable nucleus of investors. Otherwise, they would go for the 28% through the Initial Public Offering.

To that respect, Aena’s chairman—José Manuel Vargas—was interviewed by ElEconomista.es and said:

We do not have preferences. There will be a tender where many different investors may participate. The terms and conditions will be published and they will take into consideration that the investors must think in the long term.
We are flattered by the fact that one of our main customers, if not the most important, sees that things go so right that they even want to become a company’s shareholder.

Iberia is not

Iberia’s chief executive officer—Luis Gallego—said this is something in which they are not interested at this moment. According to finanzas.com Gallego said

There are different airport management models. The only thing we wish is to have the best possible conditions for service, quality and price.

According to this piece of news, Iberia is confident that they will win the handling tender for all airports for which they placed a bid since their offer is “competitive enough”.

Aena with an eye on Santiago de Chile
In the meantime, bolsamania.com informed that Aena might place a bid to manage Santiago International Airport once the Government of Chile announced a tender.

According to this information, the project would require an investment of 514 million Euros.
Aena already bought Luton and Cali airports in 2013.

Photo: Ryanair and Iberia airplanes at Adolfo Suárez Madrid–Barajas Airport / jmiguel rodriguez