Brazilian airport privatisation in a booming economy

Abstract

Brazil is taking off, carrying on her wings entire parts of the economy including the aviation sector. What are the reasons for this takeoff? How big will it be? How long will it last? What obstacles will it encounter on its path? Since the first decade of the 21st century, the so-called BRICS countries have emerged to such an extent as to challenge the developed economies; infrastructure is expanding, populations are exploding, and consumption and investments are reaching vertiginous heights. Just as it is all over the world, in Brazil the aeroplane is becoming increasingly popular among social strata that previously could not afford it. Despite these developments, Brazilian airports are already struggling to adapt to this growing demand. This tendency will be even more pronounced in the coming years. Politicians have become aware of this and have decided to act and to invest in the enhancement of Brazil's aviation infrastructure, increasingly having recourse to privatisations. This paper explores the advantages and disadvantages of such privatisations to foreign investors.