By taking measures to reduce payroll and setting a new model of business development sustained by a high level of administration and management, INFRAERO goes from an operational loss of R$ 220 million to an operational profit of R$ 505 million in just two years
Established in 1973, the Brazilian Airport Infrastructure Company – Empresa Brasileira de Infraestrutura Aeroportuária (INFRAERO) – celebrates 45 years in a new stage, marked by the reestablishment of its financial balance. The path to this recovery had its beginning in June 2016, when the presidency of the company was taken on by Antônio Claret de Oliveira. Claret is post-graduated in Business Management, Quality Engineering and Sustainability Management, and graduated in Agronomic Engineering at Universidade Federal de Lavras – Federal University of Lavras. Along his great journey, he has worked on management positions in companies such as Vallourec (former Mannesmann), Vetorial Energética, where he worked as general director, and Ecocarb, as the Chief Executive Officer. He has also directed the Sustainability Post-Graduation Program of IETEC/MG. His experience in the private sector has been essential to promote a series of changes to ensure more efficiency and productivity to INFRAERO, linked to Ministério dos Transportes, Portos e Aviação Civil (Transport, Port and Civil Aviation Ministry).
Under his leadership, a huge change was made at the Senior Management of the company, downsizing the board of directors in 42% (from 7 to 4 directors), besides cutting off 213 trust positions. The directors, specialists in their areas, built up synergy and great focus on results, upholding an integrated matrix operation. They are: Ângelo Grossi, who is responsible for Financial Planning and Relations with Investors; Eduardo Stuckert, working on Services and Legal Support; João Márcio Jordão, in charge of Operations and Technical Services; and Marx Rodrigues, responsible for Business Development. A strong Board of Directors was formed, chaired by Luiz Gylvan Meira Filho – PhD in Philosophy for the University of Colorado and engineer for ITA (Aeronautical Institute of Technology), besides being the president of Brazilian Spacial Agency for 7 years – having great support to management, check and confirmation of the strategic path to be followed.
Moreover, the implementation of a Shared Services Center ensured greater productivity and large scale gain in the execution of supporting services to the company. This project was awarded by ENAP (Public Administration National School), in August 2018, as “innovation in services or public politics at the Federal Executive Branch”, in which INFRAERO was the only state-owned company as a finalist. Besides that, the project was praised by Carlos Magalhães, specialist in Shared Services Center (SSC) and Editorial Director of XMagazine, which is also specialized on the topic: “I congratulate INFRAERO for its pioneerism in implementing SSC at public service and for the agility in this implementation. You have been working as a private company.”
By having this new structure, INFRAERO has saved around R$ 30 million annually. Furthermore, due to the acceleration on Voluntary Dismissal Program and the transfer of employees to positions in other institutions of the public administration, the company has cut off 55 % of the existing workforce by the time airport concessions began. In other words, from 14,000 employees to around 8,000, which represents, approximately, a payroll reduced in R$ 200 million annually.
The result of this change started being noticed in 2016, when there was nearly a half of reduction (– R$ 120 million) in the operational loss comparing to 2015 (– R$ 220 million). In 2017, the company impressively reversed this result, getting to R$ 505.40 million in operational profit. For 2018, the result projected is still highly positive, around R$ 400 million, considering that four of the greatest airports of the company – Florianópolis, Porto Alegre, Salvador and Fortaleza – are not part of it anymore, according to the last round of concessions.
The renowned economist Eduardo Giannetti, during the 2018 INFRAERO’s Executive Meeting, said: “I have been following movements similar to this one in other state-owned companies that have gone through an extraordinary managerial recovery process, and I am thrilled to see the impressive turn of INFRAERO before the economy.”
INFRAERO’s chain comprises 55 airports throughout Brazil. There is the transportation of over 100 million passengers a year, which represents nearly 60% of air traffic in the country, being it the biggest part of national integration, structured by air transport.
The company manages from big airports to small units that do not operate commercial flights regularly, yet represent Brazil’s sovereignty in areas that are remote and around boundaries.INFRAERO is also a partner – having 49% equity – of the airports of Brasília, Guarulhos and Viracopos (SP), Confins (MG) and Galeão (RJ).
Administration and Management
The sustainability plan has presented concrete results in many aspects, and its fulfillment has already been recognized by Tribunal de Contas da União (National Court of Audit). The improvement on the levels of administration and management of the state-owned company has highly contributed for the execution of the Plan.
INFRAERO has reached Level 1, which is the highest level, with 9.25 points in the managerial index of Secretaria de Coordenação e Governança das Estatais (State-owned Company Administration and Coordination Office), connected to Ministério do Planejamento, Desenvolvimento e Gestão (Planning, Development and Management Ministry). It was the state-owned company that evolved the most in the last assessment, May 2018, indicating 110% progress rate in less than 6 months, after a long time stagnated on Level 3 (the index ranges from Level 4 to Level 1, scores from 0 to 10). In addition, concerning the adequacy to the new Law of State-owned Companies, this one was complete and happened before the deadline, comprising all actions implemented and the company established in another level of administration.
As to management, a unique cultural model was created, focusing on results, which establishes a tactical and operational deployment of the strategy set by BSC (Balance Score Card). The Management of Results Committee was created along with three thematic Committees (“Managerial and Institutional Strengthening”, “Improvement on the Quality of Services and Infrastructure” and “Improvement of Economical-Financial Results”), comprising the different levels of the company in a firm and synergetic monthly monitoring, in such a way that PDCA (Plan, Do, Check, Act) becomes more effective and the results come up a lot more timely.
This way, INFRAERO registers in its history, a national and international benchmark management (within its own airport chain), making the process of continual improvement last longer.
New model of business development and improvement actions in many levels
One of the greatest guidelines of the management was, and still is, the development of the great commercial potential of the business. The extension of the commercial portfolio to a model that strongly includes the participation of the private initiative in airports, as well as the trading of services, systems and trainings for example, has already got around R$ 200 million increase in annual revenue.
The concessions with investments are a proof of a movement that not only brings good results to INFRAERO in terms of revenue, reduction of costs and passenger’s satisfaction, but also means better economic and social development of the region around the airports. They comprise, mainly, three macro initiatives with concession contracts that can last up to 25 years:
- Better utilization of what is called airport site, which involves outdoor areas to the passenger terminals per se. The market prospects have attracted investors of different segments and entrepreneurial projects, such as mega department stores, universities, co-working spaces and hotels, which are all reality right now;
- The release of great indoor areas to the terminals of great airports of the chain, previously occupied by administrative teams that were reallocated to smaller places, less attractive commercially. Congonhas, por example, has in sight projects of spaces for events, co-working and new VIP rooms for executives;
- Concession of Freight Terminals, which, besides reducing INFRAERO’s operation costs immensely, has its object enlarged, with specialists from private initiative, enabling it to work in other segments as well, apart from air freight. Considering all this, the final result is very positive. Up to the first semester of 2018, there was a reduction of 65% in costs in the terminals under concession, accumulating R$ 8.50 million as savings. The amount has increased 20% approximately, which proves de initiative a success.
There were other initiatives of great relevance, essential to INFRAERO’s turning point, such as:
- Credit recovery programs, according to a tax planning job that resulted in a total of more than R$ 200 million, which were already cleared, highly enhancing the company’s cash flow.
- Restructuring of the participation management areas, in order to improve administration of shareholders participation in INFRAERO, whether
at Entidade Fechada de Previdência Com-plementar Infraprev (Complementary Social Security Entity), in which the state-owned company is the main sponsor, or at Sociedades de Propósito Específico (Specific Purposes Societies), with 49% equity (GRU Airport, Rio Galeão, BH Airport, Inframerica and Brasil Viracopos Airport). There was a follow-up on topics that had been stagnated for years, besides the more effective presence at Executive and Fiscal Boards of these companies;
- Optimization of resources allocation, shrinking general ex-penditures, aiming the continual improvement in the quality of the services. Movements such as hiring within the chain and/or from specific regions, establishment of telework, in-house automation development for big airports to control the refrigeration and lighting systems automatically, for example, have already made some tens of million reais annually in savings.
- Hiring models for successful payment was essential for the solution of issues as the regularization of charges of various accounts and the reduction
of possible tax evasion from commercial concessionaire, without compromising, therefore, the company’s result;
- The advance of dissemination of better practices among airports, by a more effective matrix management of revenues and costs, totally connected to the company’s budget;
- Modernization of the document management system, totally implementing a successful electronic procedure. A demand, which had been reprimanded for some years, has now been executed and made internal and external processes and procedures prompter;
- Advance in technical and managerial qualification in all the airport chain, having an important part of the budget destined to the qualification of people in many aspects related to the good development of the business;
- Great focus on social and environmental sustainability pillars, with (I) strategic leverage of environmental area, bringing it to the Senior Management’s discussion of results, and (II) similar movement for the labor safety area, promoting more effective actions in order to prevent accidents and to create a better and safer work environment for the employees, with the consolidation of Environmental Policy and Labor Safety Policy of INFRAERO. Both the importance and focus on people’s management are to be highlighted, with the implementation, for instance, of the first Health and Labor Safety Policy in the history of the company. Another example is the environment development index, comprised of 9 programs and 25 indexes that manage situations from dealing with the airport surrounding fauna to management of solid waste and selective waste collection, spread up to the airports. The index rate increased about 20% between 2016 and 2017. Relevant social actions, such as the unique support for judo for the visual impaired of Brazil, also bring the preoccupation with the human being, the well-being of society, which basically characterizes the current company’s management.
- The project of INFRAERO University, in its final stages of Planning, shows strategic vision not only of the future, but also the present, changing its 45 years of market knowledge into value for the company and the society.
This broad scenario of changes and adjustments has been consolidating the company even more as an international reference of airport management – INFRAERO already is one the greatest in Latin America and one of the top three of the world.
The state-owned company has been living an increasing moment of credibility in the market and that can be demonstrated by visits in big companies of the sector and various renowned institutions, all of them interested on getting to know the movement made by the company and showing interest in being more present in the Brazilian market, especially in such a noticeable growing business.
Considering all this, the view of the current board of directors aims to prepare INFRAERO for going public. An international company has already been hired to sustain the design that will allow the follow-up of this process.
The idea is to have a definition of the final format of the operation in the shortest possible deadline, in other words, an Initial Public Offering (IPO) or a Mergers and Acquisitions (M&A) operation. The board of directors’ intention is to have this project ready to be carried on by the next president of the Republic, which will lead it to a new stage in INFRAERO’s journey.
By going public, the board of directors’ expectation is to get a significant amount of capital, around billions of reais. Great deal of it will be destined to modernizing and intensifying the use of technological digital solutions, as Artificial Intelligence and Internet of Things, all over the airport chain.
The model predicts a relevant fiscal fit for the Government in the form of taxes and dividends, besides making INFRAERO totally independent from the National Treasure and more modern, efficient and profitable for the shareholders.
Passengers in the first place
New airports, renovations and modernization are a part of the continuous investment of INFRAERO in its network.
Improving the passengers’ experience in its airports – the most important target public of the company – is a priority for INFRAERO. In order to meet this demand, many actions have been taken in various terminals throughout Brazil, with relevant historical movements in the last two years.
In March 2018, the new airport of Vitória was inaugurated; the construction had been going on for 15 years and, by the new INFRAERO’s management, it was concluded in 2 years. The investment in this construction was R$ 559.4 million. The terminal of Vitória got almost five times bigger, with its capacity for 8.4 million passengers a year. All installations follow the accessibility standards, ensuring the best service to disabled passengers or the mobility impaired ones. The airport had a higher rank assessment in the category in a satisfaction survey carried on with users.
In the same month, INFRAERO finished the renovation and expansion work of Rio Branco Airport. The R$ 43.2 million investment enabled the terminal from Acre to have an almost three times bigger area, from 4.6 thousand m² to 12.8 thousand m², which makes the expansion of its service capacity, from 1.3 million to 2.4 million passengers, possible.
The outdoor and indoor areas of the airport, as well as the frontal roof, were design in a special architecture. Pillars resembling tress were included, the wavy wooden ceiling was inspired in local river waters and the indoor wall now has artistic elements in embossed decorations, using local certified wood. All these elements point to the Amazon’s regional identity.
In the North region also, INFRAERO has substituted all boarding bridges of the passengers’ terminal 1 at the International Airport of Manaus. The R$ 24 million investment provides more comfort and efficiency in the boarding and landing operations. Six access bridges were substituted, while two others, installed during the expansion work of the airport in 2014, had some adjustments done in the electrical part to ensure the execution of the same services. The new bridges have metallic structure with glass finishing touch and were made according to the accessibility legislation.
At Porto Velho Airport, INFRAERO has inaugurated connectors for boarding and landing of passengers, also known as Elo System. The services were made for seven months, having R$ 6.09 million invested on them. Still in the North region, the company has worked for the conclusion of the Airport of Macapá, which must be done by the end of this year or beginning of 2019.
Improvements and remodeling
In the Northeast, INFRAERO finished the construction of new boarding and arrival rooms at the International Airport of São Luís. These improvements extended the area of the terminal of Maranhão from 6.2 thousand m² to 11.1 thousand m², expanding the passenger capacity from 4.4 million to 5.9 million a year.
The International Airport of Parnaíba (PI) had works done to improve the passenger boarding and arrival room. The place got new seats – from 45 to 90 – the installation of a plaster ceiling and a new central
In Congonhas, an area of express disembarkation has just started operating. The aim is to make the flow of passengers with no luggage to be checked in faster, since they do not have to wait in the terminal baggage claim area. This action also aims to promote more comfort and a better experience to those who arrive in São Paulo at this terminal, especially in the rush hours, once great part of Congonhas Airport users is businessmen and executives, who usually have just carry-on baggage while traveling on business. Some areas of the airport of São Paulo have been remodeled in order to provide spaces for co-working and other activities.
In 2017, Congonhas received 21.8 million passengers, which represent 20.15% of INFRAERO’s flow – it is the greatest number of passengers by square meter constructed of the whole world. There were nearly 218 takeoffs and landings along the year.
Still in Southeast, the recovery of Airport of Pampulha, in Belo Horizonte, is also part of INFRAERO’s strategic plan, and it will serve up to 2.2 million passengers a year and absorb an unattended demand in the whole capital, and that is an initiative done according to all technical and legal requirements for the operation.
Engagement with tourism
In South region, in September 2017, the new boarding room started operating at Londrina Airport (PR). Counting on a R$ 3.6 million investment, the structure expanded the airport’s capacity from 2.2 million to 3.1 million passengers a year.
In the same month, at Curitiba International Airport, the new garage-building, built and managed by Pare Bem Administradora de Estacionamentos Ltda – a 25-year-old parking lot administration concessionaire, was inaugurated. The work represents the greatest commercial contract of the commercial history of INFRAERO, reaching R$ 52.96 million. The parking lot has 2,422 parking spaces. Adding to the former parking lot capacity, the airport now has over four thousand parking spaces for vehicles.
In May this year, INFRAERO signed a service order for the expansion of the new passenger terminal of Foz do Iguaçu International Airport (PR). In that occasion, the company also signed a Commitment Term with Itaipu Binational to expand the runway, to double the access to the terminal and improve the airport. The total investment predicted is R$ 32.7 million and the deadline for the execution is September 2019. The renovation aims to increase the capacity of passengers to 4 million a year, comparing to the current 2.6 million.
The project shows INFRAERO’S strategic view on their partnerships with other companies and institutions in order to enhance tourism and economical activities that take advantage of it, such as hotel businesses and gastronomy. Foz do Iguaçu is among the three most desirable destinations in Brazil by foreign travelers. The expansion of the runway and other improvements in the airport will make some things possible, for example, the operation of international flights straight from Europe and The United States, which may allow tourists to board and disembark in the region, with no need of connections or stops in other cities.
Passengers recognize infraero’s airports as the best of the country
Curitiba’s and Vitória’s terminals receive the best evaluation in three categories.
Airports managed by INFRAERO had better evaluations on the Passengers’ Satisfaction Survey, carried on daily and released quarterly for over five years by the Transport, Port and Civil Aviation Ministry.
In the second quarter of this year, the average satisfaction rate on the terminals surveyed was 4.35, on a 1 to 5 scale, being 1 very bad and 5, very good. The survey comprises 20 of the main airports of the country, 18 of which offer services that made the users satisfied. More that 20,500 people were listened on a survey carried on by Praxian – Business & Marketing.
From the eight terminals included in the category of movement of up to five million passengers a year, the newly-inaugurated Airport of Vitória got the highest grade (4.59) and was awarded.
Among the eight terminals whose flow averages from 5 to 15 million passengers, Curitiba got the highest grade (4.69) and was also awarded. Within the airports with a flow of over 15 million passengers, Congonhas was also prominent, getting a 4.36 grade.
The improvements in INFRAERO’s airports are visible to the naked eye and also, by the use of technology, which is the case of the new WiFi connection recently implemented. The board of directors expects that the passage through the airports of the chain can be a safe, agreeable and remarkably positive experience.
The preoccupation with operational security in such a regulated and controlled sector is, indeed, of higher priority for the management. Renovations and recoveries of runways all over the country were and have been made, as well as investments in new fire fighting cars, which give support to such a noble work as of the aerodrome firefighters. In a recent case that happened at Campo de Marte airport, in São Paulo, the preparation of the firefighter team was crucial in that successful historical procedure.
Finally, INFRAERO includes in its Strategic Plan, the guidelines and goals for continual improvement of the metrics of the Passengers’ Satisfaction Survey, which has already been consolidated in the airport market since 2013. In two years of this management, recognition is increasing, adding to the awarded airports more and more, as the Airports + Brazil 2018 award, that presented two unprecedented prizes to Vitória and Santos Dumont, for example. That shows the effectiveness of the chain management actions.
45 years of evolution
The history of INFRAERO follows the development of the country and the air transportation segment.
INFRAERO started its activities on May 31th, 1973, and had the Lieutenant Brigadier Hélio Costa as its first president. In that year, he took on the administration of Presidente Juscelino Kubitschek International Airport of Brasília and Ponta Pelada Airport, in Manaus. In the next year, he started managing 13 other airports in ten states. Still in 1974, the first freight terminal of INFRAERO (TECA), installed in Afonso Pena International Airport in Curitiba started to work, followed by Porto Alegre, Joinville (SC) and Belém.
An important step was taken in 1976, at the inauguration of the International Airport Eduardo Gomes, in Manaus, which featured the most modern airport solutions back then. Among other advances, it was the first airport of the country with passenger boarding and disembarkation bridges.
In January 1977, the International Airport of Galeão, in Rio de Janeiro was inaugurated. That year, thanks to commercial revenues, INFRAERO stopped depending on federal governmental funds: for the first time, the airport income was enough to cover the cost expenses. From that moment on, federal funds have only been used as investments.
In 1981, Congonhas Airport, in São Paulo, started being managed by INFRAERO. In the following year, Arsa Social Security Institute was created to ensure retirement pension to the company’s employees.
Among other remarkable facts in the 1990’s, is the creation, in 1994, of the first Customer Call Center, in the Freight Terminal of International Airport of São Paulo, in Guarulhos. In the next year, INFRAERO incorporated the Air Force Telecommunication Company (Tasa), air navigation service provider state-owned company. That inclusion made the company’s growth in the area possible, opening it to the air navigation service provider.
Ombudsman and efficiency
The 2000’s have brought great news. In 2000, INFRAERO was linked to the Ministry of Defense and not to the Air Force Ministry anymore.
In order to respond to the clients’ questions and offer solutions to improve the procedures in the airports, INFRAERO Ombudsman was created in 2003. In the same year, INFRAERO’s Logistics Efficiency Program, which awards the most efficient companies of the import processes in the logistics chain, was launched. In 2004, the book Código da Ética Empresarial – Dimensões de Relacionamento e Conduta Corporativa (Entrepreneurial Ethics Code – Dimensions of Relationship and Corporate Conduct) was launched.
The preoccupation with sustainability, these new times’ demand, also reached the airport runways. The marking lamps used to frequently burn, then forcing the closure of the runways in order to exchange them. From 2006 on, INFRAERO implemented the use of LED lamps that helped save up to 90% energy, when compared to the conventional ones.
In the following year, Follow-up and Operational Management Centers were installed in the main airports of INFRAERO’s chain. In a single room, along the whole day, all the airline sector agencies started to monitor the operations of the airport complexes.
In April 2011, all Civil Aviation activities were transferred to a new organization, the Civil Aviation Office of the Republic Presidency, reaching the status of Ministry. INFRAERO and ANAC (National Civil Aviation Agency), that were previously under the Ministry of Defense administration, started being under this new agency’s responsibility – that also controls Conaero (National Committee of Airport Authorities), responsible for organizing all the operational activities within the airports, mission that is coordinated throughout the country by INFRAERO.
Still in 2011, the Passengers’ Guide was updated with the contributions of agencies and public companies that work at the airports. It was the first time the sector produced, coordinately, some material about the passengers’ rights and duties.