Latin recovery fails to save Viracopos airport as operator files for bankruptcy

Air cargo in Latin America has been on the rebound, but the renewed momentum has not lifted the fortunes of Brazil"™s second-largest gateway enough to avert a crisis.

On May 7, the operator of Sao Paulo"™s Viracopos airport (VCP) filed for bankruptcy protection, struggling with a debt load of BRL2.88bn ($847m).

The filing came in the wake of the publication of the airport"™s traffic results for the first quarter, which saw passenger volumes at their lowest level for the period since 2013. Cargo volume actually increased 23.17% to 52,614 tonnes "“ although last year was not a happy one for air freight in the region.

Both passenger and cargo demand at VCP have lagged behind the expectations of operator Aeroportos Brasil to "absolutely exorbitant and unforeseeable level", the company stated in its filing.

It had won the concession to run the airport for 30 years in 2012 with bright expectations. One of the first three Brazilian gateways to be privatised (besides Rio de Janeiro"™s Jobim Galeao International Airport and local rival Guarulhos), it was supposed to transcend its role as the designated cargo gateway for Sao Paulo and attract passenger services to transform itself into a regional hub.

Aeroportos Brasil invested in a warehouse management system and moved to pursue high-yield cargo. In a partnership with security specialist Brinks it set up a high security terminal for valuable freight, and it prepared for CEIV certification, which management was anticipating to be in place some time this year.

The economic slump stymied its ambitions to grow its belly network and took a toll on cargo as well. In 2016 VCP handled 166,000 tonnes, a mere 40% of the initial projections.

Aeroportos Brasil has declared that operations will remain normal. However, one carrier executive noted that the operator indicated months ago that it would reduce investment and operating costs.

The airport did not respond to questions from The Loadstar about the ramifications of the bankruptcy filing on cargo service and development plans.

The situation raises questions about possible defections of freighter services to Guarulhos. Lufthansa Cargo shifted one of its Sao Paulo frequencies to the rival airport last year but is unlikely to embark on a major migration any time soon.

Gunnar Löhr, vice-president Latin America & Caribbean, commented that Lufthansa"™s clients prefer VCP both for imports and exports, adding that the carrier usually complies with customer demand. Moreover, a fully fledged operation at Guarulhos would also be a question of warehouse capacity at that airport, he remarked.

"We are monitoring the situation in VCP, but "“ as of today "“ we don"™t foresee the need to adjust our network due to this bankruptcy filing. VCP is one of our core destinations in South America and, unless conditions at the airport change significantly, we plan to continue flying there," commented Andres Bianchi, CEO of LATAM Cargo…

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