Bienvenidos a Cancun: Privatization stimulates expansion at Cancun International Airport

Privatization stimulates expansion at Cancun International Airport CANCUN, MEXICO – Located on the Northeast tip of the Yucatan Peninsula in Quintana Roo, Mexico, Cancun International Airport (CUN) is the gateway to turquoise waters and white...


The 35 privatized airports were divided into four regions. ASUR was granted concessions to operate, maintain, and develop the nine airports of the Southeastern region, including Cancun, Merida, Cozumel, Villaher-mosa, Veracruz, Oaxaca, Huatulco, Tapachula, and Minatitlan.

In accordance with the privatization agreement, 73.9 percent of ASUR’s stock is listed on the Mexican Stock Exchange and New York Stock Exchange. The Mexican government owns another 11.1 percent and the remaining 15 percent is owned by ASUR’s strategic partner, ITA (Inversiones y Tecnicas Aeroportuar-ias). ITA is an international association made up of four companies with extensive airport construction and operating experience: Copenhagen Airports, Cintra, Tribasa, and Vinci.

"So, from the 28th of September 2000, ASUR became the first real public company in Mexico and Latin America," Castro says.

ASUR has a board of directors comprised of seven members – two from ITA, one from the government, and four independents who represent investors who control at least 10 percent of the shares. ASUR was the 2001 recipient of Investor Relations magazine’s award for best corporate governance in Latin America.

ROUGH ROADS

According to Castro, when ASUR took over operations of the airport, many renovations and improvements to the infrastructure were required. "Three years ago, this airport was totally different," he says. In this case, "different" was not a good thing.

In the 18 months following the privatization, the majority of the improvements were made airside. "It’s the most important part of an airport," Castro says. "But the people were asking, ’What are you doing?’ because no one was seeing the money." He explains that taxiways, runways, and aprons were refurbished, along with installing new lighting systems.

General Aviation Services at CUN

ASUR operates one FBO at CUN for charter and general aviation. ICCS (International Corporate & Cargo Services) based in Mexico City, provides fueling and ground support services to business aircraft traveling in and out of the airport.

Emma D. Cruz, director of ground handling for ICCS, explains that the company has a chain of 13 FBOs and offices throughout Mexico, and is the only chain of FBOs in the country.
In Mexico, the only fuel provider is ASA, a government regulated company. Therefore, in order to sell fuel to general aviation, ICCS has a contract with ASA.
Cruz says that since the privatization of CUN, there have been more costs incurred by ICCS because of tighter restrictions set forth by ASUR. "We’re paying more because wherever we’re working, we have to pay a fee. Fifteen percent of whatever we make [at CUN] goes to ASUR."
But Cruz also adds that the infrastructure at the airports has improved, and the organization that ASUR brings to the airport helps ICCS as well. "We have to have contracts now," Cruz says. "In the past, there were a lot of people providing services who didn’t have any expertise. And, since they didn’t have to pay anything to the airport, they had no expenses and they weren’t responsible [for their actions]."
Cruz explains that ICCS has a relationship with U.S.-based Avfuel, which "allows the AvFuel credit card to be used under the umbrella of ICCS."

Then came the work on the terminal. The existing six gates became 22 and the domestic departure area was expanded by 8,000 square meters. A total of 40,000 square meters of terminal space was added to CUN, at a cost of $70 million.

GETTING WIRED

Castro explains the airport was without networking or cabling systems, flight information was provided on a very rudimentary basis – usually involving a megaphone. Counter capacity was restricted with 25 international and 15 national airlines competing for the same space that was manually assigned, along with boarding gates and baggage claim, "with no real mathematical basis or tools for the person who was doing the allocation of these resources," says Castro.

"A couple of years ago, I wrote what I call our letter to Santa Claus, to describe and set forth our wish list for what we wanted for a system."

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