InterVISTAS’ Aviation Intelligence Report March 2012 Copyright ©2012 InterVISTAS Consulting Inc., all rights reserved. Page 14

Kenneth Currie

Executive Vice President

LATIN AMERICA REPORT March 2012

Brazil Selects Successful Bidders for Three Airports Last month, Brazil selected the successful bidders for the concession of São Paulo’s Guarulhos – Governador André Franco Montoro (GRU) and Viracopos – Campinas (VCP) international airports as well as Brasília’s Juscelino Kubitschek International Airport (BSB). Collectively, the three assets fetched BRL 24.5 billion, which was 347% higher than the combined reserve price set by the government for the airports. A summary of the bids lodged is shown in Table 1 below.

Table 1: Summary of Concession Bids

Airport Key consortium members Airport operator Final bid price (BRL billions)

GRU OAS, Brazilian Pension Funds (90%) ACSA (10%) 16.213 *

Ecorodovias (50%) Fraport (50%) 12.863

OHL (50%) AENA (50%) 12.000

Engevix (50%) Corporación America (50%) 11.500

CCR (90%) Zurich Airport (10%) 8.872

Advent ASUR 8.530

Odebrecht, Safra Fund (60.8%) Changi (39.2%) 8.321

Carioca, GP Investimentos ADP – Schiphol 6.120

Queiroz Galvão BAA/Ferrovial 6.010

Triunfo, UTC (90%) Egis (10%) 4.551

VCP Triunfo, UTC (90%) Egis (10%) 3.821 *

Odebrecht, Safra Fund (60.8%) Changi (39.2%) 2.524

OAS, Brazilian Pension Funds (90%) ACSA (10%) 2.213

OHL (50%) AENA (50%) 1.700

BSB Engevix (50%) Corporación America (50%) 4.501 *

OHL (50%) AENA (50%) 4.400

Old Mutual, Fidens ADC & HAS 3.901

OAS, Brazilian Pension Funds (90%) ACSA (10%) 3.213

Queiroz Galvão BAA/Ferrovial 2.500

Triunfo, UTC (90%) Egis (10%) 1.821

CCR (90%) Zurich Airport (10%) 0.982

Odebrecht, Safra Fund (60.8%) Changi (39.2%) 0.582

* Successful bid.

Many challenges remain for the successful bidders as the transactions are finalized and the operation and expansion of the airports begins. Each of the successful bidders will be required to complete a capital expenditure program designed to increase the capacity of each of the airports prior to the World Cup events in 2014. New terminal buildings are expected at each of the airports, along with an expanded airfield at VCP.

The successful bidders will be under substantial pressure to deliver these improvements in a relatively short period of time, or risk not meeting the terms of the concession. Doubts have been raised about

InterVISTAS’ Aviation Intelligence Report March 2012 Copyright ©2012 InterVISTAS Consulting Inc., all rights reserved. Page 15

the ability of the successful bidders to deliver capacity on time given that they are not among the largest Brazilian construction and engineering firms. Groups such as Andrade Gutierrez, Camargo Corrêa, Odebrecht, and Queiroz Galvão are considered the most capable of marshaling the resources necessary to do so.

In addition, some critics question the ability of the airport operators involved with the successful bidders to manage the airports at world-class standards and generate the financial returns necessary to justify the bid prices. While ACSA successfully operates large airports in South Africa, Egis’ experience is with smaller airports in Africa, and Corporación America had to renegotiate its contract to operate 33 airports in Argentina. (Corporación America was also the successful bidder to operate a new airport for Natal, Rio Grande do Norte.) Absent from the successful bidders were leading international airport operators such as ADC & HAS, ADP, AENA, BAA, Changi, Fraport, Schiphol, and Zurich.

The Brazilian Government was very pleased with the level of interest garnered by and the premium paid for GRU, VCP, and BSB, which ensures concessions of more airports, though additional qualifications may be placed on bidders of future concessions. The next tranche of airports will include Tom Jobim Galeão International Airport in Rio de Janeiro.

Mexican Airport Operators Experience Traffic Recovery and Unit Revenue Increases in 4Q 2011 Private operators of Mexico’s airports, Aeropuertos del Sureste (“ASUR”), Grupo Aeroportuario del Centro Norte (“OMA”), and Grupo Aeroportuario del Pacífico (“GAP”), have reported significant gains in passenger traffic, aeronautical, and non-aeronautical revenues in the fourth quarter of 2011 as shown in Table 2.

The three airport operators have benefitted from increases in domestic airline capacity as AeroMexico, InterJet, VivaAerobus, and Volaris added flights to replace capacity lost as a result of the suspension of operations by Mexicana. Those airlines, in addition to American and Continental, also added capacity on routes between Mexico and the United States. In the coming quarters, Mexico – U.S. airline capacity will continue to increase as a result of new capacity from

these airlines as well as from the inauguration of new services by AirTran Airways, a subsidiary of Southwest Airlines, and the possible resurrection of Mexicana.

Aeronautical revenue at ASUR, GAP, and OMA increased at rates that exceeded passenger growth largely as a result of increases in regulated rates and charges in 2011. However, non-aeronautical revenues increased at higher rates as the airport operators improved the portfolio of services available to customers in their assets. The availability and pricing of automobile parking products were improved, terminal retail shop allocation and assortment were maximized, airport lands were developed, and contracts between the airport operators and their concessionaires were improved to incentivize mutual success.

The superior performance of non-aeronautical revenue in Mexico is consistent with international trends, and represents the segment of the airport business with the largest potential upside. Non-aeronautical revenue increases are not limited by regulation, and improvements made to increase such revenues typically improve customer service in the process. With continued increases in airline service and improved goods and services available to users, Mexican airport operators can be expected to continue to experience positive revenue trends.

Table 2: Increase in Traffic and Revenue Quarter-ended December 31, 2011 Versus Prior Year Period

Passengers Aeronautical revenue

Non-aeronautical revenue

ASUR 11.7% 19.8% 23.1% GAP 7.3 12.9 22.3 OMA 7.1 18.3 32.7