Airport infrastructure and investment

Transcript

Rafael Echevarne:Good morning, everyone. My name is Rafael Echevarne. I am the Director General of ACI Latin America and the Caribbean. And probably since many of you do not know what ACI is, I will tell you very quickly what it's all about. ACI is the International Airports Association. It's actually the only association of its kind in the world. We are divided into regions, and I have the honor of being in charge of the organization in Latin America and the Caribbean. We have over 300 airports that are members of ACI, and these airports actually handle over 90% of the traffic in our part of the world. So I have the pleasure of actually being the moderator in this panel, which is going to be addressing the issue of airport infrastructure and investments. A topic that, as was mentioned yesterday, of course, is of great importance not only in Peru but throughout the region. So I'm going to invite my panelists to join the stage, and then I will give some numbers, some data as a way of introduction. So please, Andreea Pal, who is the director or CEO of Fraport Brazil, running 2 airports in Brazil, Fortaleza and Porto Alegre. Thank you.

Andreea Pal:Please.

Rafael Echevarne:Please, Ramón, Ramón Miró, who is the CEO of Quiport, the company that runs Quito Airport in Ecuador, and Ernesto Di Laudo, who is the Chief Commercial Officer at Aeropuertos del Perú, which is a collection of regional airports in this country. Please take a seat. And later, he's actually on his way, Juan Jose Salmón, who's the CEO of LAP, Lima Airport Partners, who's actually coming from a meeting with the ministry. You know, these things happen, and he's about to arrive. So please take a seat, if you don't mind, and I will just basically— will provide the context of the conversation that we are going to have. Latin America and the Caribbean is growing in terms of traffic. It's actually the region in the world that recovered the fastest after COVID of any region in the world. That is actually a reflection of one of the things that were being discussed yesterday. We do not have the alternative of traveling by rail or even by road. I always like to give the example, for those of you who are not familiar with this part of the world, that in Colombia, for example, if you want to travel between the 2 most populous cities, or even in Ecuador, a flight that is less than an hour actually is more than 10 hours by car. So for the normal conduct of business, for society, obviously aviation is absolutely necessary. It's not a luxury. It's a necessity. And that is actually not only in these 2 countries, but throughout the region. For example, in the case of Brazil, it's a country of continental dimensions, which is the same thing as was mentioned yesterday. Big cities like Manaus in the middle of the Amazonian jungle, and so on. So that is actually important to understand, and that's why airport infrastructure is so important. So right now we have about 790 million passengers in the region. The growth rate, projected growth rate, is around 4%, between 3% and 4%. By the year 2040, we will be reaching 1.3 billion passengers. So steady growth, very important growth, as I was saying. Now, in terms of CapEx, We did a study 3 years ago in ACI at the world level, but focusing on each region. In Latin America, we expect that between now and the year 2040, some of those investments have already taken place, but we need approximately $94 billion in airport infrastructure. Of these $94 billion, half of it, approximately half of it, is in greenfield projects, meaning brand new terminals and brand new runways. Now, this is not something that the operators can just decide on their own to go ahead and build. This is actually driven by the concessions that actually operate in our part of the world. That is actually a very important point because very often we tend to criticise the airport operators, but the airport operator cannot decide by itself to actually go ahead and build anything. It's actually up to the governments. You will notice that our panelists are all from the private sector, private sector companies actually running airport concessions. That is because in Latin America, and this is something that I don't know if you're familiar with, Latin America together with Europe is the Part of the world with the highest number of private sector participation in airport management. As a matter of fact, we have 261 airports in Latin America that are actually run by the private sector. These are all concessions. With the exception of 1 or 2 airports, all of them are concessions. Those 1 or 2 airports are airports that actually are not concessions, are actually owned. The airports are owned by private sector companies. And these 261 airports actually manage over 85% of the passengers in our region. Therefore, the importance of the private sector in our part of the world. It's not just a capricious thing to have the private sector here. It's actually a reflection of the philosophical approach, because that's what it is at the end of the day, that governments in the region have taken to actually invite the private sector to develop these very important infrastructures. So whilst we wait for Juan Jose Salmón, because I'm sure that many of you want to hear about Lima and so on, but before that, we are going to get started with our good friend Andreea Pal from Fraport Brazil. And I'm just going to take a seat, but I'll just throw away the question. How is the situation at your airports after the terrible floods that you had a few years ago— a year ago?

Andreea Pal:Yeah.

Rafael Echevarne:A year and a half ago?

Andreea Pal:A year and a half, yes, in May 2024.

Rafael Echevarne:I don't know if you are familiar with the fact that there were terrible floods in the south of Brazil and the airport was heavily impacted. Of course, major work had to take place to really bring them up. Can you tell us what's the situation now there?

Andreea Pal:Yes, of course. It's something that I cannot wish anybody to experience. I was on my way from Fortaleza to Porto Alegre, When I boarded the flight in São Paulo, after 15 minutes, captain said, sorry, flight to Porto Alegre canceled because of the flood. Actually, I knew that we are going to close the runway around 7 o'clock in the night, but I hoped to make it in Porto Alegre. It was not the case anymore. Well, the water came slowly in Porto Alegre, but it stayed there for more than 3 weeks. We knew actually that for a pavement that was not the newest one being underwater for 3 weeks, means that we will have to reconstruct everything. It was first a moment of, I wouldn't say panic, but I personally didn't know what to do. We had money to pay salaries for 2 months and no other revenue. We had no money to start the reconstruction. It followed a very vivid discussion with the government regarding who is going to pay for it, because it was a case of force majeure, which by the concession contract responsibility of the government, except of the portion that was insured. We had insurance, a global policy covered roughly €25 million, and the damage was more than €100 million. By that time, we thought it is going to be much more because we had no idea actually how much was affected and what we can rescue or we cannot rescue. Until, I would say, mid of June, it was a very hard time of social media crying against us, crying against the government, the government also thinking that we want to take advantage and we don't want to construct, so a very difficult period. In parallel, we did our homework, so we started working out a plan, what has to be done. As soon as the water went away, we started cleaning. It was a quite difficult period, then making all the tests of the runway to understand if we really have to reconstruct it or not. I think by mid of July, we presented to the government a recovery plan. We managed to repair more or less half of the runway until end of October. After 5 months, we started again operations in our airport, 21st of October. In the meantime, we used the military base nearby to make some flights between São Paulo and Porto Alegre. The problem was there the lack of space, so basically we could have only one flight and only during the daytime because—

Rafael Echevarne:Time.

Andreea Pal:The lighting system was not accurate, and also we had no parking positions for more than one aircraft. It was a very tough time. On the other hand, our team really worked 24/7 in all this period from May until October. First, we had for these 3 weeks underwater a group of people 28 of my colleagues that refused to leave the airport. They stayed there in case somebody comes and starts taking away equipment and other things. They defended in very difficult conditions with a diesel generator for a little bit of light and connection with the internet. Later on, everybody, we used a few offices that we had in the terminal because our administrative building was also underwater. We worked there all together, more than 700 contracts. The government refused to pay for a general contractor, so we had to contract every single work ourselves, but we managed with a very—

Ramón Miró:Teamwork.

Andreea Pal:Strong project management because time was essential, not because we get fines like in other concession situations, just because we knew that the population of Porto Alegre was waiting for their gate to the world to be open again. It was a very emotional moment, 21st of October, when the first aircraft landed. It was an Azul. With the flags, with everybody, and we had a very clear scenario what is going to happen. Exactly when the aircraft came, we had an energy blackout, so we couldn't move the passenger bridge. Everybody deboarded basically on the apron, but all the ground handling people were there applauding and passengers. Thought that this is how it should be. But actually, we had for a long time temporary energy supply, and we miscalculated the load. When all the shops opened and the air conditioning was working in the terminal, the first passenger bridge, we couldn't move. But okay, nobody noticed.

Ramón Miró:Wow.

Andreea Pal:In December, we opened also the second part of the terminal with international flights, and now we are fully recovered. The government took a temporary measure and paid us 460 million reais. It's divided by 5-point-something in dollars. We are still discussing about the business interruption costs, but at least our airport is functional and we can offer to our passengers the service that they are expecting.

Rafael Echevarne:If you ever talk about force majeure, you know what really force majeure is. A terrible experience, but actually a great recovery. Ramón, let's move to you. You have been working all around the world. Now you are in charge of an airport in Quito. Can you tell us about Quito? Because it's actually one of the few airports that actually were built from scratch. Tell us what's your experience, what lessons you've learned as compared to other parts of the world that you know very well.

Ramón Miró:Good, good. Just very quickly, if I may, thank you to CAPA, and I think it's wonderful that you have airports at an airline leadership summit, right? Because at the end of the day, stating the obvious, we're a partnership. Rafael, and just very quickly, I'd like to acknowledge you in particular because I think you've been a great spokesperson for our industry in the region. The Mariscal Sucre International Airport is the capital city airport in Quito. Right. As you well said, it's actually a fascinating project because it entailed taking over the old Mariscal Sucre, which was in the middle of the city, while we designed, built, and financed this new one. It opened, which our Lima partners have basically done, and congratulations to them, to LAP, with the opening of the new airport, and we wish them much success. Having said that, the new Mariscal Sucre opened in— February 2013. So we've been open for over 12 years now. It was, from an engineering point of view, it's actually a fantastic project because for those of you who haven't been there, it entailed basically the leveling of a plateau in the Andes.

Rafael Echevarne:Right.

Ramón Miró:So what was the old Mariscal Sucre at 2,800+ meters above sea level, There is now a new one about 18 kilometers east of downtown Quito in a region called Tababela. At the time when it opened, it had the longest commercial runway in South America, 4,098 meters, right? That, among other things, allowed us to connect Quito, albeit at 2,400 and some meters above sea level, To Europe. It's a fantastic little asset. It's a privilege for me to work there. It's a great team, highly committed professionals. We've dealt with difficulties, I don't think not as extreme as what Andreea was describing. Kudos to you for turning it around and for the airport operating where it is right now. Having said that, though, I'd argue it's an exemplary PPP in a country like Ecuador because we're proud to say that we're, for example, a customer experience level 5 airport. This year there are a few more, but as of last year, there were only 2 airports in the world that shared that prize. It was us and Incheon. It's a Skytrax 5-star airport. It's, as we all know, an airport's a fantastic economic catalyst, job-creating engine. We are the 5th largest cargo airport in Latin America, albeit with, you know, last year we moved about 3,060-some thousand tons of cargo. Flower exports are very important. But we're an airport of about 5.5 million passengers or so. The other issue that I'd argue is that it's a greenfield. We had to invest in the old airport again while the new one was built, but today the private sector has spent, my shareholders have spent over $1.2 billion, which from a— in terms of the Ecuadorian economy is maybe not the largest private investment, but one of the largest.

Andreea Pal:Right.

Ramón Miró:It's been a very successful endeavor. As we all know, this is $1.2 billion the government did not have to spend. We've generated a lot of, I'd argue, economic benefit to the country. I'll stop there, but that's the gist of it.

Rafael Echevarne:Thank you, Ramón. Let's move now to Peru. We all know, of course, the situation in Lima, brand new terminal, new runway, but there is life beyond Lima in Peru. I don't know if you are familiar with the fact that there are 2 airport concessions running regional airports in the country. One is Aeropuertos Andinos del Perú, and the other one is Aeropuertos del Perú. You have your own challenges there. Can you please tell us what's going on in these regional airports? You do have challenges. Can you share that with— can you tell us about Aeropuertos del Perú for those of you who are not familiar, and the challenges that you face?

Ernesto Di Laudo:Okay, so good morning to everyone, and thank you as well for the invitation to having the airport industry sitting here. I want to congratulate Lima Airport Partners as a heavy user having the new terminal. I think you guys are doing a great job, and now we have the pressure. So we have 12 airports, regional airports. We have airports that are in the coast, in the, in In the jungle and also in highlands. There's airports, for example, that we have rain throughout the year, at least half of the time, 6 months. That makes it really tough for construction and doing infrastructure improvements. But when we took the concession 18 years ago, we had a network of 1 million passengers per year. That means around 100 flights per week. Now we are forecasting 8 million passengers. That means we went from 2,500 passengers per day to 20,000. That's how— with a pandemic in between. We've been growing a lot. That gives us a big challenge in terms of infrastructure development. We have to invest $4 billion to improve and adjust the demand to what we want to offer to the passengers in terms of experience and in terms of operational safety. Our investment programs have 3 main verticals. So for the long term, we have master plans that need to develop in a way that we can foresee what will happen in the next 20 years with regional airports. Those investments are pretty much attached to what the concession contract says and what was written almost 20 years ago. Nowadays, our effort is put on how we can work with the government in terms of changing whatever that documents say or used to say and how we can bring it to the 21st century processes in terms of trying to be more agile and try to get the— welcome, Juan Jose— and try to get the processes to improve. And getting the different phases of a project, starting from the factibility profile definition, going to engineering, and then the construction, how we can make— how we can build to make that more agile, and let the contract concession give the possibility to the private sector to make things happen more agile.

Rafael Echevarne:I would like to point out that, of course, it's very interesting, the case of Aeropuertos del Perú, because it's not just the infrastructure, the hardcore infrastructure is built by the private sector, but also the injection of the know-how that the private sector brings into the airport management, because the traffic growth has been spectacular. After years of just having flat numbers, you come in, you start applying all these concepts that in some parts of the world are still new or not applied, like air service development, Can you tell us about this? You mentioned the growth in traffic, but I mean, it is really spectacular. I mean, you really made a difference by being present in all the different events and so on. Can you just share with the audience?

Ernesto Di Laudo:One recent case is when JetSmart decided to come to Peru. We worked together with them, and in terms of developing and launching a new market, I think we could work with them. together, and we try to help them with the global network, the developers, in how to build a new market. I know that they are very happy in terms of that type of business development, but we also have the pressure as we need to develop infrastructure and make the operation— continue to make the operation safe and improve the passenger experience.

Rafael Echevarne:Very good. Thank you. Juan José, welcome to the panel. are talking about airport infrastructure and investments. Can you share with us your thoughts about the experience that you just had in Lima with the opening of a new terminal and the new runway? Any lessons that you'd like to share?

Juan Jose Salmón:Hello. Yes, Rafael. Sorry for being late, but I'm just coming from a meeting with With the Minister of Transportation, so I have now to switch from political speech to a more technical one. Challenges, of course, a lot. By putting into operation a brand new airport, because really it's a new runway, new terminal, new tower, new everything, has been very challenging, especially in a country like Peru. But aside from a challenge, I think that we need to think on what is coming to the future. Right now, we believe that what we have put into operation is a very impressive infrastructure. It's a terminal that will have a capacity by the end of this year for 40 million passengers, when the traffic actually is reaching around 25 million passengers. So we have ample capacity to grow, and that is very important. We are in this moment also in the process of refurbishing the old runway, so we will have 2-runway system starting January next year, and that will give us again that capacity that we needed to position Peru as the main service hub in the region. We are seeing this process as a new start, as just an empty blank piece of paper, of a sheet, where we have the capability to grow. We have the capability to provide new services to the customers. We have the capability to provide also new services to the airlines. What we want to do is to promote more connectivity. Promoting more connectivity means to have more airlines coming to Peru, more traffic also between the regional airports, so more traffic between Chiclayo and Cusco. Lima does not have to be an obligated point of stop. We are not investing for that. We are investing to compete. We're investing to create the market. We are investing for everyone to to receive a benefit of this new infrastructure and for the market to grow in Peru. The overall market in Peru is around 40 million passengers a year in all the airports, which we believe is very low. We believe that we can easily reach 60 million passengers if we work all together— authorities, airlines, airports— to promote the traffic, to promote more people flying, and that is part of the thing that we need to do. From the experience, let's say, what we have done, we were able to put this big infrastructure by having very good experts. Something that is very important for us, and that is something that we have been talking a lot with the Minister of Transportation, there is a lot of experience of our technicians, of our engineering, of our people that have been making all the logistics that we have offered the government. Right now, the government is also in the process of implementing the airport of Chinchero, which is very, very, very important that it has to be on time and as soon as possible. But we have offered all the capabilities as LAB to support them, to help them, to give them ideas. What will be the best way to develop, the best way to fast-track that project? Chinchero was supposed to be ready in 2025. It's not going to be ready in 2025. Now they have moved it to 2027.

Ramón Miró:Right.

Juan Jose Salmón:Cusco is the second main airport in Peru in terms of destination. All this know-how that we have acquired working together with the government needs to be put in value, and that is what we are looking for. We are really hoping that in the next months we can have some sort of sessions to help the government to support that process, because at the end, we are here to compete and we are here to grow altogether.

Rafael Echevarne:Actually, as you were pointing out, it's not just the terminal building and the runway, because you really have a very ambitious plan to develop an actual airport city, and it's very important the impact that that is going to have on the population, on creation of jobs, and so on. Can you tell us more about that? Because— and also, we'll pass later on to Ramón, you can talk about that, because you are doing something similar in Quito.

Juan Jose Salmón:Yes, so we are looking at this development more than only the The actual operational part of passengers going in, passengers going out. We want to position Callao as the hub service for the region. For that, we have already managed to get an investment of a hotel. We already have a logistics center under operation. We are looking forward to have our first office building. Luckily, that will come up by the end of this year. We are also looking to have more connectivity in terms of position ourselves With an e-commerce platform. That is also what we are trying to get, actually, and to promote all kinds of real estate investment in that area. Because at the end, when we are going to deliver the concession back to the government, whenever our contract is finished, what we want to deliver back to the government is an infrastructure with new investments, which has created jobs, which has created value, Instead of only delivering a flat piece of land as the one that we have taken 25 years ago. But that is also something that we need to go to work with the government because those investors on real estate assets, they need to be provided with additional time which will go beyond our concession term. That is also something that we are discussing with the government to allow us to happen. We will deliver to the government a flat piece of land without value, and we are here again to create value.

Rafael Echevarne:Ramón, just following on that, you do have an interesting development there too. Can you tell us more about that? Also, I wanted to ask you, because you mentioned how such a good experience Quito is and how it is rewarded for it, I wanted you to tell us about the importance of IT, of this type of infrastructure that is not just bricks and mortar. but actually the introduction of biometrics and so on, and how that has an impact on that passenger experience. So airport city and IT.

Ramón Miró:Yeah, gladly. Just, Juan Jose, you missed it, but I extended my congratulations to the LAP team for the opening of the new airport. I wish you the best, as you know, and there's an airport brotherhood that we— I cheered them on since late last year. when it almost happened, but here you are up and running, so I wish you the very best. What he's describing, what some have termed the aerotropolis or the airport city, I mean, it's self-evident, right? Airports now are much more than just the place where airplanes land and take off. I mentioned the importance of cargo for airports. for us, right? The question is, how do we vertically integrate ourselves better for more value-added services at the airport? There's cargo-specific work. Juan Jose made reference to a hotel. This idea of a gathering point, a meeting place, a place where you can have a convention event, obviously that's top of mind for us. We're lucky in that immediately adjacent to the 1,500 acres that we have, there's a free trade zone of 205 acres operated by the municipality. We're in conversations with them as to how best to promote that, and to work not only with the municipality, but also with the central government in terms of attracting foreign direct investment.

Rafael Echevarne:Yes.

Ramón Miró:I emphasize that because the view is not just Ecuadorian, it's global. It's actually how do you position the airport in the city in order to bring in this type of investment. I want to go back to something that I think it's self-evident that we've all mentioned, but Juan Jose in particular here is that we joke that we're ambassadors, not only of the airport, but of the city and of the country. It's very important for us, stating the obvious, that every single foreigner who comes in and leaves, their first and last impression of the city and the country is the airport. The fact that we function well, that the airport's relatively clean, is extremely important because, again, it's the impression, it's the branding that we help support in terms of the airport. Rafael, I'll stop there, but I mean, I could go off on any tangent.

Rafael Echevarne:So changing a bit tack here, Andreea, you were telling me about this new initiative by the Brazilian government. I think it's called the Ampliar Program, which has to do with the development of regional airports, if I understand correctly. Can you tell us more about that?

Ernesto Di Laudo:Not?

Andreea Pal:Ah, now. Yes, the government of Brazil decided to launch a program for private investment in regional airports that have actually no chance to be financially viable. The idea is that only airport operators that are already working in the country can participate in a simplified tender process.

Rafael Echevarne:Yes.

Andreea Pal:Practically enter into a kind of concession for the period that they have left in the main concession. It's a cash flow calculation by revenues, which are not much or zero, and investments that have to be done, and maintenance operational cost. The negative cash flow is going to be compensated— By the government. by the government in a sort of reequilibrium of the main concession contract. They launched the first package, 19 airports. I don't know yet how many parties are going to be interested in this. The first assessment shows that the take of the government of what the cost of investment and the cost of operating and maintaining the airports are, is not really matching the cost that we normally have because we take care of our airports. But we'll see. Okay.

Rafael Echevarne:Ernesto, going back to Peru and the regional airports, and actually there is a question about that. If Kafka were Peruvian, he would write airport tenders. What's LAP and ADP's way out of this paradox, given the unique challenges of these country because you're actually suffering in a way from the type of concessions that apply to your airports. Can you tell us about that? Because it really has an impact.

Ernesto Di Laudo:The summary is that we want to make life easier for contractors. I was saying before that— well, actually, we already built 2 new runways, which in terms of construction is only 18 to 24 months, but it took more than 10 years to get the bureaucracy done. So I think we need to take the risk for contractors. We need to make it— we need to give incentives. We've been working lately in terms of the master plans to create a big room where around 100 to 120 engineers from 20 different disciplines work together and make things happen faster. Still, that helps, but it's not what is making what we need to— airport infrastructure to be developed in the same way that demand is growing.

Rafael Echevarne:Now, Juan Jose, you were talking about the need to grow. Now you have, after spending $2 billion, You said, you know, now traffic needs to grow because actually in Peru, traffic has not grown as much as it should have. And in terms of tourism competitiveness, other countries in the region actually are ahead of you. In other words, Peru is not where it should be in terms of traffic numbers, in terms of international visitors. So what is missing there in Peru? that perhaps, you know, should be addressed?

Juan Jose Salmón:Yes, we have not been growing as we should in terms of tourism. For example, before the pandemic, we were receiving like 4.5 million tourists a year. This year, we will only reach 3.5. There are many reasons to that— political instability, there were some riots that unfortunately we had some years ago, etc. But at the end, as I was mentioning before, we have a new start with this new airport. We need to work all together to promote Peru. For me, it's really a shame that we have not recovered all that traffic. There's a lot that we need to do all together as a community, and that is part of the job that we are offering to everyone right now. We're actually working with PROMPERÚ to try to create a package of a stopover package to see if we can promote additional traffic that we don't have right now, some of those connecting passengers to stay a little bit longer in Peru. But in order to do that, everyone needs to put something on stake. So it's not only LATAM that needs to reduce the TUA. The hotel association, they are offering also to offer a package regarding their usual rates, the tourism operators as well, and I hope that the airlines will also provide cheaper tickets in order to promote that Because otherwise it doesn't work. But that is not the way to create growth. There's a lot that needs to be done from Peru working together with the private sector. There's also here a question about the connection fee in Lima. Yes, we are going to charge a connection fee. It's our right. Today, the meeting that we had with the ministry was about that. We have a contract with the government. We have invested $2 billion in this terminal and we have the right to recover for that investment. There is no discussion about that. The discussion, it can be that from the money that we are collecting, we are giving to the government around 53% of our gross income goes directly to the government. That is part also of the contract condition that we took when we started these operations. With that 53% that goes directly to the government from our gross revenue, $53 per every $100 goes directly to the government, and with that, the government has created a trust, and with that trust, they need to invest in the regional airport, which they have been delayed for the reason that has been explained here as well. So if the government wants to reduce the amount of money that they receive, we are fine with that, as long as we are able to recover our investment. And about competitiveness, as you know, there's a constant debate with the airlines. But what is true is the overall cost in the cost structure of an airline, of an airport, is very, very low, between 3%. So therefore, the connecting fee is being paid by the passenger. We need to remain competitive, that's clear, and that is what we are going to do, and that is our challenge. But we also have the right to recover the investment. Moreover, when the investment that we have done right now, at the beginning we were planning to have an—

Ramón Miró:10%.

Juan Jose Salmón:a different kind of investment to operate with both terminals. The government said, no, you were not able to use both terminals. We were forced to abandon the old infrastructure, and therefore that meant additional investment, additional investment not only in the terminal, but in all the logistics around the terminal— energy, fuel farm, water provision, etc.— and that needs to be recovered.

Rafael Echevarne:Absolutely. I mean, I would like to point out, stress The fact that airports in Latin America and in most places around the world do not set charges capriciously. This is a very highly regulated business. You just don't wake up one morning and say, I'm going to increase my charges. You cannot do that. We operate in a regulated environment where there is a formula set by the government, and we are just following that. I think that that is very important to stress that. In relation to what you were saying, Juan Jose, also in terms of basically liberalization and deregulation of air transportation in our part of the world, a very important to-do on the to-do list. Some countries, like for example Brazil, some countries like Chile, even Ecuador. Ecuador, I don't know if you know that in Ecuador there is a possibility of foreign airlines flying inside Ecuador.

Andreea Pal:Yes.

Rafael Echevarne:There is cabotage rights in Ecuador, which is unheard of in other parts of Latin America. Well, those are concepts that may sound foreign to us, but actually do happen in other parts of the world. I keep on saying in all the different venues that in Europe, the dynamism of the aviation industry in Europe, the fact that suddenly cities can become major tourist destinations is due to the fact that the market is completely deregulated and liberalized. I don't know, Andreea and Ramón, did you want to say something about what Juan Jose said before? Maybe you want to try.

Andreea Pal:Yeah? Well, I just— he said 25 years ago. Maybe 25 years ago, I was responsible in Frankfurt for Lima, so I received the land From the government. It was a very long period of time, and I would like to take the opportunity to congratulate my colleagues that they managed to open finally this so long-awaited terminal, and I hope that soon the second runway will go— will start operations too. Regarding the charges in Brazil, our charges are the lowest in the world, I think. And are almost the same for— doesn't matter which airport, doesn't matter the demand that you have. Of course, they have absolutely no link to the cost that we have. This is a dilemma basically in entire South America, especially in Brazil. The agency is trying to increase the quality, the service quality every year, but there is basically no reflection of all the investments that are needed or higher operational costs in the tariffs. By some point in time, this is not going to work anymore.

Rafael Echevarne:I want to just let you go. We have 5 minutes left. I mentioned technology, IT, and so on in relation to the experience of the passenger, because I think that that's a very, very important message to convey to the governments. It's not just bricks and mortar. It's actually what the governments allow you to do and what job they have to do to facilitate that experience for the passenger. Any words on that, Juan Jose and Ramón?

Ramón Miró:Just very quickly, I just wanted to go back to something because I think it's fascinating that we're talking about 25 years because it's a long period of time. That's the exact same thing that happened in Quito. The concession goes back to the early, very early 2000s. Albeit the final concession contract was signed in 2006. In the 2001-2002 timeframe, this was being structured. Just from an investment point of view, we're truly— we bet on the country and on the airport with the epitome of a fixed asset. Just refurbishing a runway or building a runway from scratch, as we had to do, To your point, Rafael, our fixed rates were fixed 25 years ago. We had no say. I mean, we have, by the way, in Ecuador, the way it works is it's an inflation-adjusted price that moves every year, but again, we bet on the country and on the city 25 years ago, and so it's very important to be transparent about that. It's not an issue where we wake up in the morning and Absolutely. Yesterday it was 5, today it's 10. That's not at all how it works. We built the infrastructure and we move forward. The other point I just wanted to emphasize, and I think Juan Jose did a very nice job about this, is that we're all in this together. We have to work together. It's the government, it's the Ministry of Tourism, it's the Ministry of Commerce, it's the Chambers of Commerce, it's the Hotel Association, etc. Rafael, with you we've discussed this, and this was brought up yesterday a few times. Flights per capita, 0.6, 0.5 versus Europe, versus the United States, versus Ireland, which is insane. But you have to cross-reference that also with GDP per capita.

Rafael Echevarne:Mm-hmm.

Ramón Miró:That's what we need. We need to create wealth in the country in general to attract investment, to grow the tourism offering, to improve the country brand. Like, we're very active about the idea of Ecuador. What is Ecuador to Italians, to Japanese, to Scandinavians, et cetera? We need to change that completely. But it's an effort that we take on with the ministry, with the municipality, et cetera. Sorry, and then finally, to your point about technology, I completely omitted the question you had the last time. But just so you know, for example, we have an issue where we're very pro— eGates, data analytics, etc. But part of the problem we have is that the Ministry of Interior, right, when you have eGates for outgoing traffic, they're very restrictive in terms of the countries that can actually— with which we can actually use that.

Rafael Echevarne:Yes.

Ramón Miró:So we have this fantastic technology that's used very little because of a bottleneck with the government. And I don't want to blame the government. Yet again, sorry, that's where it's so important that we work together and that we align ourselves in order for these types of efforts to be successful.

Rafael Echevarne:Juan Jose, do you want to say something about technology? Because that's actually something that is badly needed here.

Juan Jose Salmón:Sure. We have installed brand new equipment, brand new systems, so we are in that process of putting that into full mode. Full capability. But what we are doing right now is something that Ramón has just mentioned. We are working very closely with immigration because our view is that everyone coming to Peru must be able to go through the e-gates. The e-gates are working perfectly. It only takes like 10 seconds to go through. But unfortunately, right now, only Peruvians can access to that. We are working for those international passengers to be able to access through those gates because the system is there and the technology is there. The next idea that we have, and we have already made this proposal to immigration, is to have a full immigration system. So when you exit Peru, in a system similar as it is in the States or in Mexico, for example, that you do not go necessarily through a booth, but it's just free flow from the information they receive, they will receive from the airlines. That will be the second stage where we would like to go. We have a very important advantage that the actual provider of the queue system for the airlines is SITA. SITA is also the one that has provided the new e-gates to immigration and the food system. In terms of integration, it's very easy to do. It's a matter of the final political decision to do it, and that will, of course, be very important for the passenger experience. That is only the first step. We will continue rolling new technology.

Rafael Echevarne:Well, thank you very much. We've run out of time right now. Thank you so much for your contributions. I just want to say very quickly that in ACI, we are about to publish a very important document. It's best practice in airport concession contracts that we will, of course, share with all the governments in the region, where basically we reflect on the type of contracts, as Ernesto said, as I was mentioning, and, you know, we were talking about in the panel. So without further ado, thank you very much.

Andreea Pal:Thank you, Rafael.

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