Madrid, Barcelona airport sales grounded

The new government is against individual concessions for the two airports as well as the timing of a possible sale. Instead, it will look at valuing airports operator Aena as a whole with a view to allowing the private sector to buy into the firm in the future.

Spanish infrastructure minister Ana Pastor announced yesterday that the privatisation of 90 percent of Madrid’s Barajas and Barcelona’s El Prat airports has been canned, putting an end to what was very much a Chronicle of a Death Foretold – to borrow a title from Colombian writer Gabriel García Márquez – ever since the new Conservative government took office.

The previous Socialist government announced last October that it would postpone a decision on the airport privatisations until the end of this month. Yesterday, Pastor argued that individual concessions for Barajas and El Prat would diminish the value of airports operator Aena – which the government calls “the world’s largest airports operator”. 

The minister also railed against the timing of the tenders and of a possible sale of a stake in Aena, highlighting that “the current market conditions are clearly unfavourable and discourage the continuity of the [tender] process, which could result in a lower number of competitive offers and, also, [a lower] price for the two [airport] concessions”.

Instead, Pastor wants to draw up a strategic plan that will help value Aena – whose value has deteriorated with the crisis, the minister argued – before opening up the company to private capital. The minister also wants Spain’s regional authorities to have a say in Aena’s new management model.

Pastor did not say when the new government plans to open Aena to the private sector, or what percentage of the company it will be willing to sell.

Under the tender process started by the former government, Spain was said to be looking to net an upfront payment of €5.3 billion for the two airports – €3.7 billion for Barajas and €1.6 billion for El Prat. Additionally, the authorities were thought to be targeting an annual payment from the private partner equal to 20 percent of each airport’s revenues, or a minimum of €150 million annually for Barajas and €80 million for El Prat.

A total of six consortia – including the likes of Ferrovial, Canada Pension Plan Investment Board, Abertis, GMR Infrastructure and Changi Airports, to name just a few – expressed interest in bidding for each airport, with five of the consortia in the running for the two airports and two consortia bidding for either Barajas or El Prat.

The second part of the former government’s plan was to subsequently sell 49 percent of Aena – which manages 47 airports across Spain and holds a stake in 27 airports all over the world – to the private sector.