Madrid and Barcelona airports to be privatised

SPAIN (Agencies) The Spanish Government aims to raise a minimum of €5.3 billion from concessions awarded to companies to operate Barajas airport in Madrid and El Prat in Barcelona. The Cabinet on Friday approved the creation of two concession-holding companies for the two airports. Companies will be invited to bid for 90.05 % of their capital, with the remaining 9.95 percent to be held by state-owned AENA Aeropuertos. The minimum asking price for Barajas is €3.7 billion and €1.6 billion for El Prat. Concession holders must also pay AENA a fee of 20 % of the annual revenues of the airport managers, with a minimum set for Barajas in 2012 of €150 million and €80 million for El Prat.

The Public Works Ministry said Friday that tenders for the two concessions will be invited from June 30, with the winners to be decided by the end of November. The new managers will assume control of the operation of the airports from the spring of next year. The concessions will be for 20 years, with a possible extension of five years. The new managers must uphold all of the agreements reached by labor unions and AENA Aeropuertos.

Barajas posted total revenues last year of €1.056 billion. It handled 23.9 million passengers in the first half of this year, up 0.8 % from a year earlier. El Prat had turnover of €547 million in 2010, with 15.8 million passengers coming through, an increase of 20.6 % year on year.

Public Works Minister José Blanco said the privatization would enhance competition and drive tourism. Three out of every four visitors to Spain arrive by air.

The government is also planning to sell 49 percent of AENA Aeropuertos, but given the current market turbulence has yet to decide whether this should be through an initial public offering, or a placement among private investors.