Brazil's Defence Minister Nelson Jobim stated the government may sell shares in Infraero adding "we may seek to do an initial public offering of Infraero to raise more funds", as it seeks to expand air travel services ahead of the 2014 World Cup and 2016 Olympic Games (Bloomberg, 09-Jan-2011). Governor Sergio Cabral recently stated Rio de Janeiro's airports must be improved to avoid "a disaster" as travellers arrive for the World Cup and Olympics, among USD36 billion in investments the state needs to prepare for the events.
Brazil looks to sell Infraero shares to improve facilities ahead of 2014 World Cup
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Airports - subject as always to the vicarious uncertainty of airline fortunes
CAPA’s 2016 outlook was against a background of unusually high levels of profitability for airlines. In 2017 those profit levels may be eroded as oil prices creep back up, economies falter and political uncertainty abounds over matters such as ‘Brexit’ and the election of a new and unpredictable US president – along with the prospect of greater levels of protectionism and threats to open skies agreements. All of which, of course, must impact on airports.
Perhaps nothing sums up this political uncertainty more than the ‘decision’ made – at length – by the British government that London Heathrow Airport will be expanded by the addition of a single runway, and which is not a decision at all. It must be rubber stamped by MPs by Dec-2017 and there is no ‘certainty’ about that. On a potentially more positive note however, Donald Trump’s election as US President could generate new, much need investment in US airport infrastructure.
The Trump presidency casts a long shadow over a tentative recovery in Latin America
After battling dismal economic conditions for the past two years, Latin America is poised to begin pulling itself out of fiscal decay in 2017. Near the end of 2016, forecasts tilted toward a return of modest GDP growth between 1.5% and 2% for 2017 after the region endured an economic recession for the prior two years.
But the emerging optimism was significantly clouded when the US selected Donald Trump as its next president in Nov-2016. An already weak Mexican peso (MXN) plunged against the US dollar (USD) on fears of a Trump Administration abolishing NAFTA, engaging in mass deportation and following through on plans to erect a wall on the US-Mexico border. Economists have already issued revisions to Mexico’s projected economic growth for 2017, and the benefits of a new liberalised bilateral between the two countries are in jeopardy as airlines have to adjust their growth prospects to reflect a potential new era of protectionism.
Broader implications of Mr Trump’s presidency on Latin America will emerge over time; hopefully they will not be as sombre as the politicking noises might suggest.
But even so the current cloud of continuing uncertainty ushered in by his election could become an impediment to recovering economies and air traffic flows within, and to and from the region – just as demand was starting a tepid recovery near the end of 2016. Any downward revision to Latin America’s economic forecast for 2017 places airlines operating in the region in a precarious position.