SAN JUAN, Puerto Rico, Thursday February 28, 2013 – The United States Federal Aviation Administration (FAA) has signed off on a 40-year lease of Puerto Rico’s Luis Munoz Marin International Airport to Aerostar Airport Holdings LLC.
According to Reuters, the deal for the Caribbean’s busiest airport, with nearly 9 million passengers a year, is valued at US$2.57 billion, which includes a $615 million up-front payment and annual revenue-sharing payments estimated to add up to $552 million.
The balance of the deal involves investment in modernizing and improving the airport. Aerostar has pledged to invest an average US$46 million in the facility each year, more than three times the current $13.5 million average annual investment.
“The selected private operator is qualified to operate the airport, meets federal expectations regarding grant assurances, and can comply with general statute requirements relating to airports,” the FAA said in a 40-page decision released on Tuesday.
Aerostar is comprised of Aeroportuario del Sureste, which operates nine airports in Mexico, and Highstar Capital, which has made investments in Baltimore and London and has close relationships with British Airways, Lufthansa and Air France.
The deal will provide new cash to bail out the island’s Ports Authority, which is weighed down by nearly a billion dollars in long-term debt and lacks the financial strength to tap U.S. municipal bond markets.
Officials say they also want to grow the airport through the deal, which would lift tourism as the island struggles to recover from six years of recession.