Infraero moves forward in implementation of structural changes necessary for its IPO
Infraero (the Brazilian Airport Company) has started to implement a series of internal structural changes intended to provide greater autonomy to the airports under its administration and, consequently, improve their management efficiency. The alterations form part of a much more far-reaching restructuring process announced in September 2013 with a view to Infraero going public in the future.
As of September 1, 2014 the administrative bodies of the airports controlled by Infraero assumed greater autonomy in the decision making processes relating to the airports’ operational and commercial matters. Up until then, Infraero’s decision making process underwent 3 steps: (i) the 60 airport administrations, (ii) 9 regional administrations, and (iii) the state company’s Executive Board. This distribution of powers has led to a series of internal conflicts at Infraero.
Under the new structure, the regional administrations will be technical support centers providing support for projects and construction work at airports. Decisions will be taken by the airports administration at the airports and by Infraero’s Executive Board. It is hoped that the changes will make the decision-making process faster and easier.
Infraero will also be establishing performance targets that must be reached by both the airport administration and the former regional administrations which are now technical centers. By 2015, the airport administration and the technical centers will be periodically evaluated by the Infraero Board and its profits will be divided in proportion to achievement of the targets.
The Infraero Board hopes that these changes will result in increased earnings for the state company, which is currently going through a financial crisis as a result of the recent privatizations of 6 major Brazilian airports The loss of income from the conceded airports is expected to result in a deficit to Infraero of R$ 170 million at the end of this year, with such deficit rising to R$ 450 million at the end of 2015, according to the company’s Board.