News Column

Fitch: Brazil's Infrastructure Likely to Pass World Cup Test

May 19, 2014



NEW YORK & SAO PAULO--(BUSINESS WIRE)-- Brazil's airports are likely to accommodate the traffic challenges the World Cup will present, Fitch Ratings says. Approximately 3.7 million passengers are expected to travel to the 12 venues for the FIFA World Cup Brazil 2014, 600,000 of whom are likely to be foreign tourists. Rio de Janeiro should see approximately 544,000 visitors, and Sao Paulo, about 390,000. It kicks off on June 12, with the final scheduled for July 13.

As Brazil's railway network is limited, airport infrastructure will be critical. According to Empresa Brasileira de Infraestrutura Aeroportuaria (INFRAERO), approximately BRL5.6 billion was invested in the improvement of airport infrastructure for the World Cup. Most was dedicated to building or renovating passenger terminals, airplane berths and airstrip conditions.

The majority of airports are ready to accommodate the expected additional transit. The northeastern venues of Salvador, Natal and Recife are already accustomed to operate at capacity during December/January summer vacations and Carnival season.

Ten of the airports are controlled by INFRAERO. In our view, Aeroporto Internacional Marechal Rondon - Cuiaba (four matches), Aeroporto Internacional Pinto Martins - Fortaleza (six matches) and Aeroporto Internacional Tancredo Neves (Confins) - Belo Horizonte (six matches) present the most significant risk of delays in finishing construction works by the World Cup. The Cuiaba airport presents the most challenging situation, with only 75% of scheduled works completed, while Fortaleza will operate through temporary structures.

Under private concessions, Aeroporto Internacional Presidente Juscelino Kubitschek - Brasilia (seven matches) and Aeroporto Internacional Governador Andre Franco Montoro - Guarulhos/Sao Paulo (six matches) concluded most of their BRL4.0 billion investments. The latter opened its new international passenger terminal on May 11, 2014. Construction continues at both airports.

The inner-city transportation network lags that of airport infrastructure. To accommodate the flow of tourists during match days, cities like Rio de Janeiro have declared match days to be holidays. While declaring a holiday will significantly decrease traffic, it is unlikely to completely address the capacity need.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Bruno Pahl, +55 11 4504 2204

Associate Director

Global Infrastructure and Project Finance Group

Alameda Santos 700

Sao Paulo

or

Bernardo Costa, +55 11 4504 2607

Senior Director

Global Infrastructure and Project Finance Group

or

Rob Rowan, +1-212-908-9159

Senior Director

Fitch Wire

33 Whitehall Street

New York, NY

or

Media Relations

Elizabeth Fogerty, +1-212-908-0526

elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings


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