LABACE Convention News

Brazilian Airport Projects In Limbo As Economic Downturn Bites

 - August 25, 2016, 7:20 AM
The Aerovale airport projects in Caçapava was stalled first by a dispute over environmental issues (resolved in December 2015) and then by a funding shortfall.

Several São Paulo-area airport projects intended to serve the 2014 soccer World Cup, then promised for this month’s Olympic Games, slowed and stalled as market conditions soured, demonstrating that building an airport takes longer than a business cycle. The same recession has reined in commercial aviation expansion, reducing pressure on business aviation traffic at shared airports, but high costs have sent some aircraft owners and operators to more distant, cheaper airports.

The most visionary project, Aerovale in Caçapava (east of São José dos Campos, where business aircraft manufacturer Embraer is based), was begun by construction and paving contractor Roger Penido long before the business aviation boom. Originally envisioned as an industrial condominium next to one of the major Rio-São Paulo highways and with its own airstrip, Aerovale received one of the first federal licenses as a private airport allowed to charge for operations. Early last year, claimed environmental protection violations paralyzed the project, and only in December was an agreement (known as “TAC”) reached that allowed the project to proceed. The paralysis of nearly a year forced the company to seek protection from its creditors.

“We’re working to meet the terms of the TAC. We’re seeking an investor to finish construction of the airport,” Noeli Penido told AIN. “We strongly believe in the logistics focus. Once the airport is finished, there will be demand for Aerovale, despite the slowdown in business aviation.”

Catarina Executive Airport, 40 miles (60 km) west of São Paulo in São Roque, is the centerpiece of a project by publicly traded luxury real estate developer JHSF. While earthmoving is well advanced, JHSF’s other projects have been hurt by the economic slowdown, and the group is understood to be open to proposals to invest in the airport. According to press reports, JHSF is studying the sale of 50 percent of its shopping centers to the Blackstone Group.

While both plans to bulldoze hills into airports have finished the bulldozing only to stall, the São Paulo state airport authority has steadily improved Sorocaba Airport, investing state funds when federal promises failed to materialize. Over the past five years, “The system of taxiways, ramps, and infrastructure for new hangars were enlarged,” stated the airport. “The runway, which was 4,855 feet, was increased by 492 feet to to 5347 feet. The aircraft ramp was expanded from 64,600 to 159,300 sq ft. Two new taxiways were constructed and the four existing ones were widened.” While the runway expansion awaits certification by Brazilian aviation authority ANAC, construction of a control tower progresses, with brick and mortar to be finished this year, and equipment expected to be installed and ready next year.

Embraer opened its first FBO at Sorocaba, along with a service center that this year received EASA and FAA certification. This is one of 34 maintenance shops in Sorocaba which include Pratt & Whitney Canada, Gulfstream and Dassault.

World-Way Aviation opened its Air Elite FBO at Sorocaba this year. Heavily capitalized startup CB Air, after 20 years as the flight department of retail giant Casas Bahia, received its Part 135 charter certificate in January 2015, and its 107,600-sq-ft installations at Sorocaba include an FBO.

The Minister of Industry, Foreign Trade and Services, Marcos Pereira, visited Sorocaba—including Embraer’s hangar thereon July 29, and expressed interest in internationalization of the airport, a move that would make it easier to attract maintenance work from outside Brazil.

Sorocaba is one many airports operated by state agency DAESP (Departamento Aeroviário do Estado de São Paulo). The state has a bid out to privatize a group of five airports, including two important to business aviation: Campos dos Amarais in Campinas, and Jundiaí. “All are geared primarily to the development of general aviation, with a focus on business aviation and airtaxi,” according to Artesp, the state transport agency responsible for the international bid. “The minimum investment during the thirty-year concession will be R$90.1 million [$28.15 million], of which R$32.4 million [$10.1 million] will be concentrated in the first four years.” In prior bids the airports have found no takers and, as of mid-August, one of the two bidders had been “disclassified” while the other had been “disqualified” so there may be yet another bid.