Renegotiation drivers in Brazilian airport concessions

This study investigates the factors influencing the renegotiation of airport concession contracts in Brazil, focusing on the period from 2013 to 2023. It encompasses 59 airports, representing approximately 90 % of passenger movement in the country, and examines concessions awarded across seven rounds. Using a Generalized Linear Mixed Model (GLMM) with a probit function and panel data, the analysis identifies significant predictors of renegotiation. The findings reveal that macroeconomic instability, particularly exchange rate volatility, is the primary driver of renegotiations, highlighting the financial vulnerability of airport concessions to external shocks. Regulatory constraints, including fee caps and mandated investments misaligned with demand, further exacerbated financial strain on operators. While competitive bidding and high premiums contributed to financial pressures, the main challenge lay in the underestimation of macroeconomic risks rather than the structure of concession agreements themselves. These results underscore the importance of integrating macroeconomic risk management into future concession models to enhance financial resilience. • This study focuses specifically on airport concessions in Brazil. • Exchange rate fluctuations increase renegotiation likelihood in concessions. • Rigid fee caps contribute to financial instability and renegotiations. • Concession design needs macroeconomic stability and regulatory flexibility. • Results are specific to Brazil; further comparative research is recommended.