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FAA plans Sept. 28 public hearings on LMM P3

AeroStar General Manager Agustín Arellano (Credit: © Mauricio Pascual)

The Federal Aviation Administration will hold on Sept. 28 what will likely be the only public hearing on the proposed public-private partnership through which the government of Puerto Rico would turn the management of the Luis Muñoz Marín International Airport over to Aerostar Holdings, News is my Business learned.

The meeting will take place in San Juan, a little over a month after Aerostar Holdings, a consortium composed by Mexico’s Grupo Aeroportuario del Sureste (ASUR) and Highstar Capital, submitted a final draft of its application for certification as the airport’s new operator, Aerostar General Manager Agustín Arellano told this media outlet.

“We submitted the final draft on August 17, after meeting with the FAA on August 20 and 21, and knowing that the FAA has no major objections with the filing,” he said. “We have a correct filing that meets all of the FAA’s requirements as well as those of the U.S. Department of Transportation, for the final analysis.”

In the proposal, Aerostar outlined its plans for the LMM airport and its agreements with the Puerto Rico Ports Authority to improve and modernize the facility to the tune of $1.4 billion in investments.

The company also committed to making an upfront payment of $615 million, as well as annual payments of some $550 million to the Ports Authority during the life of the 40-year concession.

The process of landing the FAA’s approval requires Aerostar to meet a number of compliance and certification requirements through a process that should take about 90 days. If the FAA gives its go-ahead, the Mexican company would take over the management responsibilities in December, Arellano said.

While the FAA reviews the paperwork, Aerostar will continue working with the Ports Authority on the due diligence required prior to closing the deal, which includes establishing the exact blueprint of the properties to be leased as part of the concession.

For now, Aerostar will take over LMM’s four terminals, two runways, and additional facilities to set up future private jet operations. However, the inclusion of two major components — the airport hotel and part of the cargo activity — remains up in the air as their operators are tied up in litigation with the Ports Authority.

News is my Business learned that the hotel, currently operating under the Best Western flag, will likely be excluded from the final agreement.

A large contingent of members of the Ports Authority’s Brotherhood of Office Workers and Allied Fields protest in Isla Verde Wednesday.

Employee unrest
While Arellano was delivering a presentation of Aerostar’s plans for the airport during the “2nd Meeting of Puerto Rico-Mexico Entrepreneurs and Professionals” at the Intercontinental Hotel in Isla Verde, outside, at least 100 members of the Ports Authority’s Brotherhood of Office Workers and Allied Fields protested against the “privatization” of the facility.

Brotherhood President Astrid Rosario led the group in blasting the government’s “privatization policy, which has only brought on instability and unrest for the island.”

“We’ve spent a year and a half denouncing administrative sloppiness and this government’s inability to manage, as well as the deliberate actions by the current management that have led our agency to a progressive indebtedness,” she said.

During the protest, the unionized workers claimed that the government has deliberately held back from investing in the airport’s facilities, while granting hefty salaries to employees in positions of trust.

Arellano confirmed Aerostar executives will meet with Brotherhood leaders today to discuss their concerns, particularly about future job security.

“We will reiterate what the governor announced, which is that all of their jobs are guaranteed, either by staying with the Ports Authority or moving over to Aerostar. This element of the agreement is favorable to the workers here in Puerto Rico, and is something I have not seen done anywhere else in the world,” Arellano said.

“They also need to know that this is not a privatization, because the government isn’t selling anything. We want to work with them, we work well with labor unions and we support the workers,” he said. “We’re not importing people, because the idea is to work with and use local talent.”

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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