My Account Menu

CAPA Login


Register to trial CAPA Membership!

Bisignani tells Brazil to take Olympic opportunity to fix infrastructure

24-Apr-2011

It is hardly controversial that the main legacy of major global events such as the Olympics and the football World Cup is a host of underutilised sporting arenas and a large public debt – along with the warm feeling in which some local politicians briefly bask. It took 30 years for Montreal to pay off the debt that funded the three weeks of self-glorification for the city’s mayor at the 1976 Games.

This article appears in the April edition of Airline Leader, CAPA’s airline management magazine. Go to www.airlineleader.com to download the full edition.

From Barcelona to Athens, from Sydney to Beijing, cities are littered with largely empty stadia and wasteland, under-used areas that were briefly shrines to the mirage that the coverage would stimulate long-term inbound tourism. Most recently, South Africa lavished scarce resources on stadia for the football World Cup, with little lasting benefit for the economy.

But amid this gloomy vision of the role of major sporting events, there is usually a lasting side-benefit. The strict discipline of imposing fixed dates for providing infrastructure means that large transport projects are fast tracked. Visitors have got to get to and from the events and to and from the country. Airport upgrades, new train links, road improvements and the like become uncontroversial top priorities. And, when the games are finished and the athletes have gone home, the general public benefits daily.

So, when IATA’s Director General and CEO, Giovanni Bisignani, lectures Brazil on airport infrastructure and air traffic management, there is a real possibility that it is not just the airlines who stand to benefit if improvements are made. His Mar-2011 assessment that "time is running out for major infrastructure projects", for the World Cup and the Olympics, should be a wake-up call. He believes that "Brazil's airports will not be capable of successfully hosting the FIFA World Cup or the Olympics without major changes."

The reality is that Brazil’s recent economic growth spurt and resulting air travel boom have put enormous pressure on the nation's airports and airways system. As is often the case, when it comes to government funding of the basic infrastructure, there is a substantial lag. Thus, says Mr Bisignani, "The INFRAERO model, which controls 94% of Brazil's airports, is broken. Terminals at 13 of the top 20 airports cannot cope with current demand. Sao Paulo, which handles 25% of Brazil's traffic, is in a critical state with insufficient capacity and services that do not meet global standards."

And, of the airways system, Mr Bisignani says: “Airlines have invested in avionics to support more efficient flying. But the infrastructure on the ground does not match our capabilities in the air."

Since winning the Oct-2010 election, newly appointed Brazilian President, Dilma Rousseff, has impressed observers by being fiscally responsible, including taking a low-key approach to some of the mega projects which she herself designed under President Lula da Silva's leadership. President Lula’s high-speed rail project, designed to link Rio de Janeiro and Sao Paulo, is scheduled for completion in 2016, after the World Cup and before the Olympics. But this seems optimistic.

In mid Mar-2011, President Rouseff announced the outline of an airport privatisation programme, allowing private operators to develop terminals at existing airports and to develop new greenfield airports.

The International Finance Corporation, the funding arm of the World Bank, simultaneously announcing a major loan for port development, is considering extending loans for both airport development and high-speed rail projects. 

Brazil's economy expanded 7.3% in 2010 and, despite inflation concerns, is continuing strong growth in 2011. Its domestic airline market ranks in the top four in passenger numbers, but Brazil is only 37th in terms of international passengers. As IATA points out, this is heavily disproportionate to the country's economy, which ranks eighth in the world.

Inserting new and essential airport infrastructure would certainly seem to be a valuable and much needed offshoot of the sporting bonanza that Brazil is eagerly anticipating. Hopefully it will arrive in time.


Want more analysis like this? CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find out more and take a free trial.