The events of September 11th meant that Lima Airport Partners (LAP), the private consortium now running the city’s Jorge Chávez international airport, did not get the start they had hoped for in its first year of privatized operations. Passenger numbers fell 8% in 2001, according to Carolina Castilla, Lima Airport Partners’ general manager. Forecasts for passenger numbers for the next few years have been trimmed back as a result, from almost 6.5 million in 2005 to 6.1 million.
However, the consortium has plenty of time to make the airport pay. The group – made up of Frankfurt Airport and Bechtel, each holding 42%, and the Peruvian group Cosapi, holding 14% – has a 30-year concession to run the facility, during which time users of Jorge Chávez should continue to see dramatic changes. Frequent travelers can easily detect the new management’s impact already, both in efficiency and facilities.
The airport concession was the biggest such award made under the interim government of Valentín Paniagua, and LAP’s bid was, as Castilla calls it, “aggressive.” The group is paying 46.51% of all gross income to the government. In the first 10 months of private operation since signing the contract with the state last February, LAP has paid the government $37.7 million.
During the course of the 30-year concession the consortium is set to invest more than $1.2 billion in the airport, and the government estimates the state will get more than $5.3 billion in revenues.
In the first 180 days of its operations, the LAP group put $4.3 million into smartening up the airport and making minor improvements – three-and-a-half times the amount it had pledged. “We found a lack of maintenance going back a lot of years,” says Castilla. Furthermore, the consortium has invested about $1 million in security measures with another $4 million earmarked for 2002. The operators want the airport to reach US Federal Aviation Authority standards.
The government has awarded more than 40 concessions to run various airport services and facilities, with further contracts to be awarded soon for ground handling and catering services.
By 2004, a first-phase $100 million expansion should be complete, comprising a new hotel and shopping center as part of the terminal complex. Then, within a decade, LAP will build a second runway on what is now mainly farmland adjacent to the airport. This second runway must be in place by the concession’s 11th year. By 2010, LAP forecasts passenger numbers will have grown from today’s 4.5 million to more than 8.8 million a year.
Not far beyond the planned second runway site is what LAP hopes will be one of the keys to the expanded airport’s success: the docks of Callao, Peru’s main seaport. Castilla says LAP hopes to build on the proximity of the two facilities – an advantage few other locations have anywhere in the world – to turn Lima into a cargo trans-shipment hub.
The airport’s current nearby cargo center will be brought within the airport complex itself. One proposal is to create a free-zone structure encompassing the airport and the seaport at Callao, stimulating investment in manufacturing assembly and cargo handling. Other countries are working on similar proposals. Before that, though, Callao’s port still needs to be privatized for any major investment to take off. This still looks a distant prospect despite long-laid plans.
Castilla says Lima also aims to become a hub for passenger services, an aspiration shared by other Latin American airports. “If we do not attract more airlines there will be no business,” she says. There are around 26 carriers using the Lima airport. Lan Chile is already said to be considering using Lima as a hub for its operations, just as long-defunct Braniff once did in the 1970s.