Pro-competition rules in airport privatization: International experience and the Brazilian case

• Airport competition is becoming a key driver of higher investments and quality of service.
• Privatization processes should be designed to address airport competition, as the costs of ex-post intervention are high.
• Brazil built-on international experience to develop a privatization program that prevented cross-ownership.
• The results of this model seem to be satisfactory, even though some challenges remain in its implementation.

This article aims to demonstrate the importance of establishing pro-competition rules in the concession of multiple airports to private companies by describing the recent Brazilian experience. More specifically, it addresses: (i) how the economic literature deals with potential competition among different airports, and how this competition was dealt with in the concession programs of Australia, Mexico and the United Kingdom; and (ii) Brazil's recent experience with airport concessions, where international benchmarking led to cross-ownership restrictions. As a conclusion, this paper defends that governments should design regulatory restrictions that account for the existence of competition among airports. Nevertheless, these restrictions must be carefully planned and designed to achieve their goals.