Transforming Brazil’s aviation landscape

Challenges and opportunities in the new growth acceleration programme. 

Brazil’s New Growth Acceleration Programme (“Novo PAC”) has earmarked substantial investments, including BRL 300 million (USD 58 million), for critical infrastructure and security upgrades at Rio de Janeiro’s Santos Dumont Airport. This allocation is part of a broader initiative focusing on enhancing Brazil’s infrastructure, with a significant emphasis on airports. The airport, located at the city centre, has historically dominated air traffic in Rio de Janeiro, leading to challenges for Galeão International Airport, situated to the north. However, questions arise regarding the sustainability and efficiency of these investments, particularly in the face of limited routes and the evolving dynamics of Brazil’s aviation sector. 

The Novo PAC programme, rooted in public-private partnerships (“PPP”), aims to promote investments in key infrastructure, including airports, transport, logistics and social initiatives. “The BRL 1.3 trillion investment programme almost replicates the 2007 PPPs programme introduced during Lula’s second term as president,” reported a partner at an asset management firm. The investments in airports, totalling BRL 10 billion, are expected to modernise existing facilities and create new ones, addressing safety concerns and improving passenger experience. The asset management partner continued, “in fact, reforms in Santos Dumont airport will be mainly focused on safety which will take most of the BRL 300 million destined for the airport.”

However, scepticism arises concerning the efficacy of these investments due to past experiences of incomplete projects and bureaucratic hurdles. Professor of Civil and Environmental Engineering at the Federal University of Goiás expressed concerns, “I don’t trust the guidelines of ANAC [Brazil’s National Aviation Agency], the previous investment experiences with public-private was awful. If its plans failed in the past, why should they work this time?”  

“the previous investment experiences with public-private was awful. If its plans failed in the past, why should they work this time?”

Professor of Civil and Environmental Engineering, Federal University of Goiás 

The decision to limit routes at Santos Dumont, a strategy aimed at boosting Galeão’s viability, raises questions about the competitive landscape. “Santos Dumont’s air traffic is being significantly reduced to favour the Galeão [Tom Jobim International] Airport,” reported an engineer who has a column in a leading financial newspaper in Brazil. He expanded, “The truth is that Galeão’s concessionaire, Changi, has been pressing to do so. In fact, their threat to return Galeão’s concession to the government was very real a few months ago.” So while safety concerns and environmental considerations have been cited, political and economic motivations also play a significant role.

Governor Marcelo Castro emphasised that the limitations stem from airport competition rather than security or distance concerns. However, a Professor of the Civil and Environmental Engineering School cited, “This bothered local Rio politicians who invested heavily in the [Galeão] airport and restricted the use of Santos Dumont.” The dynamic nature of this competition adds complexity to the aviation sector’s future trajectory, requiring strategic planning and cohesive policies. “How does the government expect to attract private investment if they change the rules of the game?” added the Professor. 

“How does the government expect to attract private investment if they change the rules of the game?”

Professor of Civil and Environmental Engineering, Federal University of Goiás 

One notable omission in the Novo PAC discussions is the approach toward sustainable aviation fuel (“SAF”) and the broader environmental agenda. “All these ecological transition labels have been included to attract investors and meet public expectations,” the Professor retorted. “Almost 20% of PAC funds will be spent in fossil fuel-related projects.” Brazil possesses significant potential in SAF production, given its rich agricultural industry. However, the absence of a coherent strategy to integrate SAF into the aviation sector raises concerns. “PAC established in the region of BRL 25 million to promote sustainable fuel.” The asset manager added, “I’m not sure how this is distributed but, Petrobras’ Cubatão refinery [in São Paulo] will benefit from another budget item which contemplates the creation of a specific unit for the production of SAF.”

“[Novo] PAC established in the region of BRL 25 million to promote sustainable fuel.”

Partner at an asset management firm, São Paulo

The clock is ticking, with stringent emissions targets looming from 2027, necessitating a comprehensive roadmap for SAF integration. Partnerships with organisations like Brasil Biofuels, Embraer and Raízen represent a step forward, but a holistic approach encompassing infrastructure, SAF production and decarbonisation policies is imperative. 

Brazil’s aviation sector stands at a critical juncture, marked by significant investments and strategic decisions under the Novo PAC programme. While the investments hold promise, challenges in project completion, airport management and environmental considerations loom large. The nation’s aviation trajectory underscores the complexities and opportunities inherent in balancing economic development with environmental responsibility in the modern era. 

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