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Featured Project

San Juan Airport Privatization is Complete

LeighFisher provided sell-side advisory services to the Puerto Rico Public-Private-Partnership Authority (P3 Authority)
LeighFisher provided sell-side advisory services to the Puerto Rico Public-Private-Partnership Authority (P3 Authority)

Location: San Juan, Puerto Rico, USA

Over the last decade, the Puerto Rico Ports Authority (PRPA) has seen increasing levels of debt, declines in passenger numbers, and many of its facilities in need of significant upgrades. In December 2009, the PRPA filed an application to join the Federal Aviation Administration (FAA) Pilot Program for Airport Privatization. It was deemed this action would enable the Authority to reduce debt levels and provide the necessary private capital to fund improvements and upgrades at Luis Muñoz Marín International Airport (LMM). In June 2010, LeighFisher was retained as a lender's technical advisor by the P3 Authority.

Over the following 30+ months, LeighFisher assisted in many key aspects of the LMM transaction, including negotiating a new airline agreement, future airline rates and charges, and Operating Standards that would govern the new operator. LeighFisher also assisted in the technical and commercial due diligence for the airport and the bidder evaluation process. This involved a complete review of the airport business strategy, including providing a comprehensive analysis to potential bidders of the non-aeronautical opportunities at LMM, along with detailed financial, operational, and facilities reports, tours of the Airport, and responses to requests for further information.  Indicative bids were received in March 2012, and Aerostar Airport Holdings was selected as the winning bidder in July.

A 40-year lease was then executed and filed with the FAA for their review.  After a public hearing and comment period, the FAA issued their Record of Decision and the transaction closed on February 27, 2013. 

Throughout the transaction process, LeighFisher's airport business advisory team assisted with many other tasks that contributed to a successful outcome.  In June 2012, JetBlue relocated its operations to the new Terminal A, which required significant coordination with the Transportation Security Administration, concessionaires, airport personnel, and numerous contractors. Two existing PFC applications had to be amended with drafts filed with the FAA prior to approval of the transaction.  LeighFisher provided airport security planning services by way of a complete update of the Airport’s existing Security Plan in coordination with FAA and TSA representatives. LeighFisher also assisted the PRPA with management and strategy planning and developed a comprehensive plan for the operation of the remaining ten regional airports within their system. This Regional Airports Plan included staffing projections, rationalizing projected revenue enhancements, and capital requirements. This plan was fundamental in securing FAA approval of the transaction.

Key Highlights: 
  • The first successful privatization of a large commercial airport under the FAA’s pilot program
  • The Government of Puerto Rico received $615 million in up front proceeds and expects a further $600 million from revenue sharing over the 40-year lease
  • The new airport operator (Aerostar) has announced a $1.2 billion capital plan including a $200 million terminal reconfiguration within the first two years
Services Include: 
Airport Privatization
Demand Forecasting
Airline Negotiations
Airport Commercial Development
Economic Analysis
Technical and Commercial Due Diligence
Passenger Facility Charges
FAA Pilot Program Compliance