Chile: Nuevo Pudahuel Seeks to Extend Santiago Airport Concession Due to COVID-19 Impact

Nuevo Pudahuel, private operator of Arturo Merino Benitez Airport in Santiago de Chile, is looking to establish a dialogue with the Ministry of Public Works of Chile to extend the contract of the air terminal beyond 2035, year in which would end its agreement.

Ads

In an interview with the Chilean newspaper El Mercurio, the general manager of Nuevo Pudahuel, Xavier Lortat-Jacob, expressed that there is no business model that can stand up to a 90% drop in activity (compared to 2019) and that they are puzzled by the position of the Ministry of Public Works (MOP) to close the doors to talk about the economic imbalance of the concession.

In 2019 Nuevo Pudahuel handled 24,6 million passengers (+5,7%) and 157,224 aircraft movements (+4%).

“I want to emphasize that we are not requesting for the Government to assume economic expenses, quite the contrary. What we are looking for is to work together, like now, to adapt the contract to this new reality; an extension to the concession term to be able to rebuild together what the crisis destroyed”, he concluded.

The Board of Directors of Nuevo Pudahuel proposed, based on the economic crisis caused by the pandemic, to hold a round-table to reach an agreement that protects the interests of investors and the Chilean State, but Minister Alfredo Moreno rejected the proposal alleging that the economic imbalance due to the fall in air traffic was part of the risk that investors run.

Ads

Nuevo Pudahuel has the concession of Santiago de Chile International Airport from 2015 to 2035, part of the contract includes works such as the expansion of several areas of the airport to the new International terminal within the first 5 years (that is, until 2020) , which required an investment of 900 million dollars destined to:

• Doubling capacity, to serve 30 million passengers by year.
• Expansion of existing areas and construction of the new international terminal.
• Parking: capacity to more than 5,800 car spaces.

Xavier Lortat-Jacob explained that the projects were carried out during the first 5 years with clear expectations of growth in the aviation activity and the remaining 15 years from 2021 of the concession were to recover the investment made. However, they estimate that only in 2024 they would return to a similar figure to the pre-pandemic, and that it was an exogenous factor to the activity that was not possible to predict. And that they do not have a defined term but that they would seek to extend the current contract by 4 or 5 years.

Nuevo Pudahuel is part of the French group Vinci Airports, which operates 42 airports in 12 countries that in 2019 handled more than 255 million passengers. 11 airports are located in France, 2 in the United Kingdom, 5 in United States, 6 in the Dominican Republic, 10 in Portugal, among others.