Madrid, Barcelona airports sell-off to raise 5.3 billion euros

The government is aiming to raise a minimum of 5.3 billion euros from concessions awarded to companies to operate Barajas airport in Madrid and El Prat in Barcelona.

The Cabinet on Friday approved the creation of two concession-holding companies for the two airports. Companies will be invited to bid for 90.05 percent of their capital, with the remaining 9.95 percent to be held by state-owned AENA Aeropuetos. The minimum asking price for Barajas is 3.7 billion euros and 1.6 billion euros for El Prat.

Concession holders must also pay AENA a fee of 20 percent of the annual revenues of the airport managers, with a minimum set for Barajas in 2012 of 150 million euros and 80 million euros in the case of El Prat.

The Public Works Ministry said Friday that tenders for the two concessions will be invited from June 30, with the winners to be decided by the end of November. The new managers will assume control of the operation of the airports from the spring of next year. The concessions will be for 20 years, with a possible extension of five years. The new managers must uphold all of the agreements reached by labor unions and AENA Aeropuertos.

Barajas posted total revenues last year of 1.056 billion euros. It handled 23.9 million passengers in the first half of this year, up 0.8 percent from a year earlier. El Prat had turnover of 547 million euros in 2010, and passenger traffic in the first six months of 15.8 million, an increase of 20.6 percent over the same period a year earlier.

Public Works Minister José Blanco said the privatization would enhance competition and drive tourism. Three out of every four visitors to Spain arrive by air.

The government is also planning to sell 49 percent of AENA Aeropuertos, but given the current market turbulence has yet to decide whether this should be through an initial public offering, or a placement among private investors.