Rio's Santos Dumont concession moves a step closer, but how to lease an airport with a capacity cap?

As the airport privatisation by concession auction scheme in Brazil, now 15 years old, grinds to a conclusion, one of the tastier airports has finally reached the stage where it looks like the privatisation is about to be fulfilled at last - and possibly even before the end of 2026.

That airport is Santos Dumont: the domestic airport for Rio de Janeiro and the equivalent of São Paulo's Congonhas Airport, which was reconcessioned in 2022.

It is possibly the most 'visual' airport in the country, located close to the upmarket Botafogo suburb and the tourist attraction of Sugar Loaf Mountain.

There are several reasons why Santos Dumont has taken so long to get to this stage.

One is that the state operator Infraero wanted to hang on to it, as it became one of few that was making any money for it.

Then it became embroiled in the attempts to save the declining Galeão, Rio's international airport, which have involved the country's president, 'Lula', and influential politicians in the city.

The measures taken in order to do so include a passenger cap at Santos Dumont that have hurt it, prompting steep revenue declines: it is genuinely a handicap.

So, that is the position now as a formal announcement about a concession is awaited.

Unless some changes to its modus operandi are made quite quickly, that would lead to a situation where both airports would compete with each other - while one of them is protected, and the other isn't, and under different owners.

That is a questionable way of going about a privatisation.

Meanwhile, this transaction may well prove to be the final curtain call for Infraero as an operator of principal gateway airports.

The government is making other plans for it.