Corporación América Airports Stock

Corporación America Airports S.A. engages in acquiring, developing, and operating airport concessions. The company is a subsidiary of A.C.I. Airports S.à r.l.

The company is the leading private airport operator in the world. As of December 31, 2022, the company operated 53 airports globally in Latin America, Europe, and Eurasia. The company has expanded the environments and geographies in which it operates by acquiring airport concessions in Armenia, Uruguay, Ecuador, Brazil, Italy, and additional concessions in Argentina.

The company operates some of the largest and most important airports in the countries where it conducts operations, including a large international airport, such as Ezeiza Airport in Argentina, domestic airports, such as Brasilia Airport in Brazil and Aeroparque Airport in Argentina, airports in tourist destinations, such as Bariloche and Iguazu in Argentina, Galapagos Ecological Airport in Ecuador, and Florence Airport in Italy, as well as mid-sized domestic and tourist destination airports.

Revenue Sources

A significant portion of the company's revenue depends directly or indirectly on the level of passenger traffic at the company's airports and the number of aircraft movements (takeoffs and landings) conducted in the airports the company operates. The company classifies its revenue in the following categories: aeronautical revenue, commercial revenue, construction service revenue and other revenue.

Aeronautical Revenue

Aeronautical revenue is derived from the use of the company's airport facilities by aircrafts and passengers.

The company's concession agreements establish or otherwise regulate the rates that the company may charge to aircraft operators and passengers for aeronautical services. The company charges each departing passenger a fee for the use of its airports, which varies depending upon whether the passenger's flight is an international, regional, or domestic flight, and whether the passenger is in transit. Some of the company's concession agreements also allow the company to charge additional fees to passengers for services, such as security and reduced mobility assistance, among others. The company charges its aeronautical customers fees for aircraft landing and parking, which depend on whether the flight is international or domestic, the maximum take-off weight of the aircraft, the time slot and take-off time, among other factors. International fees are generally higher than domestic or transit fees.

Non-Aeronautical Revenue

The company's Non-Aeronautical Revenue includes commercial revenue, construction service revenue and other revenue.

Commercial Revenue

The majority of the company's commercial revenue is derived from fees resulting from warehouse usage (which includes cargo storage, storage and warehouse services and related international cargo services), services and retail stores, duty free shops, car parking facilities, catering, hangar services, food and beverage services, retail stores, including royalties collected from retailers' revenue, and rent of space, advertising, fuel, airport counters, VIP lounges and fees collected from other miscellaneous sources, such as telecommunications, car rentals and passenger services.

Construction Service Revenue

The company treats its investments related to improvements and upgrades to be performed in connection with the company's concession agreements under the intangible asset model established by IFRIC 12.

Therefore, the company recognizes revenue and the associated costs of improvements to concession assets in relation with the concessions' obligations to perform improvements as established in the respective concession agreements. Revenue represents the value of the exchange between the company and the respective governmental authorities with respect to the improvements, given that the company constructs or provides improvements to the airports as obligated under the respective concession agreements, and in exchange, the governmental authorities grant the company the right to obtain benefits for services provided using those assets, which are recognized as intangible assets.

Other Revenue

Other revenue includes revenue that is not otherwise classified as aeronautical revenue, commercial revenue, or construction service revenue.

Airports by Country

Argentina

The company's largest operations are in Argentina, where the company operates a total of 37 of the 56 airports in the Argentine national airport system, including the two largest airports in the country, Ezeiza Airport and Aeroparque Airport. Ezeiza Airport is the company's largest airport in terms of contribution to revenue and Argentina's second largest airport in terms of passenger traffic, while Aeroparque Airport is Argentina's largest airport in terms of passenger traffic.

The company's airports are located in 22 of the 23 Argentine provinces and in the City of Buenos Aires and currently serve major metropolitan areas in several Argentine provinces (such as Buenos Aires, Córdoba and Mendoza) and the City of Buenos Aires, tourist destinations (such as Bariloche, Mar del Plata and Iguazú), regional centers (such as Córdoba, Santa Rosa, San Luis, San Juan, La Rioja, Santiago del Estero and Catamarca) and border province cities (such as Mendoza, Iguazú, Salta and Bariloche).

Of the 37 airports the company operates in Argentina, 19 have been designated as 'international airports' under applicable local law, meaning that they are or may potentially be equipped to receive international flights.

In Argentina, the company's main concession is the AA2000 Concession Agreement, which accounted for approximately 32.7 million passengers, or 96.8% of the total 33.8 million total passengers the company served during the year ended December 31, 2022.

Italy

In Italy, the company operates and manages the Florence Airport and the Pisa Airport, the leading airports in the Tuscany region, one of Italy's most touristic regions. Florence Airport is an important world-class touristic destination serving full-cost carriers, while Pisa Airport has a proven low-cost carriers business model.

Of the approximately 6.7 million total passengers in the TA airports during the year ended December 31, 2022, approximately 4.5 million were in Pisa Airport and 2.2 million were in the Florence Airport.

Brazil

In Brazil, the company operates the Brasilia Airport and the Natal Airport. The Brasilia Airport is located 12 kilometers (8.5 miles) from downtown Brasilia, Brazil's capital city. It is the only airport in South America capable of operating two runways simultaneously, which provides the largest runway capacity in Brazil.

For the year ended December 31, 2022, of the approximately 15.7 million total passengers in Brazil, approximately 13.4 million were in the Brasilia Airport and 2.3 million were in the Natal Airport.

The Brasilia Airport Concession is owned by ICAB, a subsidiary of Inframerica. As of December 31, 2022, the company owned 99.98% of the equity interests of Inframerica, which holds 51.0% of the equity interests of ICAB. Infraero, a state-owned company affiliated with the Civil Aviation Secretariat of Brazil, is the owner of the remaining 49.0% interest in ICAB.

The company operates the Natal Airport through the company's 99.98% ownership of ICASGA. ICASGA was originally owned by Infravix (50.0%) and CASA (50.0%). In 2015, the company acquired from Infravix a 49.95% interest in ICASGA and the Majority Shareholder acquired the remaining 0.05% interest in ICASGA. As of December 31, 2022, the company owned 99.98% of ICASGA and the Majority Shareholder owns the remaining 0.02%.

Uruguay

The company's operations in Uruguay consist of the operation and maintenance of the two main Uruguayan airports that receive commercial flights, the Carrasco Airport and the Punta del Este Airport, and the Uruguay New Airports which were incorporated into the scope of the Carrasco Concession Agreement pursuant to the Amended Carrasco Concession Agreement. The Carrasco Airport, located near Montevideo, is Uruguay's largest airport in terms of passenger traffic and serves as the country's primary gateway for international travel. Carrasco Airport has the capacity to handle up to 4.5 million passengers annually. It serves regional centers, tourist destinations and certain major cities throughout Europe and the Americas. The Punta del Este Airport is not material to the company's business. Upon the execution of the Amended Carrasco Concession Agreement, Puerta del Sur also operates, develops and maintains the Uruguay New Airports.

The company also owns TCU S.A. ('TCU') through which the company operates the cargo terminal at the Carrasco Airport. The company owns 100% of Puerta del Sur, the holder of the concession agreement through the execution of a comprehensive management agreement with the Uruguayan Ministry of Defense (the 'Carrasco Concession Agreement') to operate the Carrasco Airport and, following the execution of the Amended Carrasco Concession Agreement, the Uruguay New Airports. Additionally, the company owns 100% of CAISA, the holder of the concession agreement ('Punta del Este Concession Agreement,' and together with the Carrasco Concession Agreement, the 'Uruguayan Concession Agreements') with the Uruguayan Ministry of Defense to operate the Punta del Este Airport.

In 2003, the company's wholly-owned subsidiary Cerealsur S.A. acquired 100% of the outstanding shares of Puerta del Sur, the holder of the Carrasco Concession Agreement. The original concession agreement was for a period of 20 years ending in November 2023, which term was extended for an additional period of 10 years, until 2033. In November 2021, the company executed an amendment to the Carrasco Concession Agreement extending the concession term for additional 20 years, until 2053 and incorporating the Uruguay New Airports to the scope of the concession.

For the year ended December 31, 2022, of the approximately 1.4 million total passengers in Uruguay, approximately 1.3 million were in the Carrasco Airport and 119.5 thousand were in the Punta del Este Airport.

The company owns 100% of Puerta del Sur, the holder of the Carrasco Concession Agreement, which incorporated the Uruguay New Airports, and 100% of CAISA, the holder of Punta del Este Concession Agreement.

Ecuador

The company's operations in Ecuador consist of the operation and maintenance of the Guayaquil Airport, in the City of Guayaquil, the second largest airport in the country, and the Galapagos Airport, located in Baltra Island, Galapagos Archipelago.

The company owns 50.0% of TAGSA, which operates and maintains the Guayaquil Airport, and 99.9% of ECOGAL, which operates and maintains the Galapagos Airport.

Armenia

In Armenia the company operates the only two airports for scheduled commercial flights in Armenia: the Zvartnots Airport, located in the capital city of the country, and the Shirak Airport.

For the year ended December 31, 2022, of the approximately 3.7 million total passengers in Armenia, approximately 3.6 million were in the Zvartnots Airport and 0.05 million were in the Shirak Airport.

The company owns 100% of AIA which owns the concession to operate and maintain the Zvartnots Airport and the Shirak Airport.

Peru

The company's operations in Peru consisted of the operation, use and maintenance of five airports in southern Peru, including the Arequipa Airport, which is the third largest airport in Peru in terms of passenger traffic, through the company's 50.0% participation in AAP.

On December 16, 2021, the company transferred its 50% ownership interest in AAP to Andino Investment Holding S.A. Following this transaction, Andino Investment Holding S.A. now owns 100% of AAP. Therefore, as of December 31, 2022, the company no longer operate the airports under the AAP Concession Agreement.

Main Customers

Main Aeronautical Customers

For the year ended December 31, 2022, the company's main aeronautical customers were Aerolíneas Argentinas Group, LATAM Group, Copa, Gol Transportes Aereos, American Airlines, Avianca Group, Iberia Lineas Aereas Espana, Ryanair Ltd., and FB Líneas Aereas S.A.

Main Commercial Customers

For the year ended December 31, 2022, the company's main commercial customers were Dufry and Flyone Armenia.

Regulation

The company is subject to numerous regulations that govern the AA2000 Concession Agreement, the concession agreements for the Neuquen and the Bahía Blanca Airports, as well as the company's business and the operation of the airports, issued by the Argentine Congress, the Executive Branch, the Ministry of Transportation, the ORSNA and the Administration of National Civil Aviation (Administración Nacional de Aviación Civil or the Argentine ANAC).

History

Corporación America Airports S.A. was founded in 1998. The company, formerly known as A.C.I. Airports International S.à r.l., was incorporated under the laws of the Grand Duchy of Luxembourg in 2012.