Luis Muñoz Marín 

International Airport (SJU)

Public-Private Partnership Airport Project

December 2011
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Executive Summary

 SJU is the busiest airport in the Caribbean with 4.2 million enplanements in FY 2011*. 

 SJU is a critical infrastructure asset for the economy of Puerto Rico and job creation on the 

Island.

 SJU is facing serious challenges: 

 Deteriorating infrastructure;

 Decline in traffic;

 Lack of financial capacity;

 Absence of managerial continuity; and

 Strong competition from neighboring countries. 

 SJU can have a positive transformation by establishing a public-private partnership (P3) with a 

strong private consortium (P3 Project).

 The objective of this meeting is to brief you on the P3 Project for SJU, gather general support 

and start an open dialogue as we approach the final phase of the P3 Project. 

_______________

* Fiscal years in Puerto Rico are periods of twelve months starting in July and ending in June of the following year. 
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Background

 Opened with a capacity for 665,000 passengers and 

permitted the development of a tourism industry and overall 

economy. 

 Puerto Rico became a preferred destination. 

 Gates were expanded. Eastern Airlines became the dominant 

carrier and occupied Terminal B. 

1955

2000-09

1980s

1990s

Original structure of the SJU International Airport 

in San Juan, Puerto Rico. 

Present 

 After Eastern Airlines closed, American Airlines became the dominant carrier. SJU became a 

hub for American Airlines. 

 Other Caribbean destinations became more competitive. Puerto Rico looses its international 

interconnectivity capacity due to 9/11 attacks.

 The Dominican Republic, Mexico and Jamaica consolidate as tourism destinations. 

 Miami and Panama City are now the new “doors” to Latin America. 

 SJU is no longer a hub and funds for capital improvements are scarce . 

 Lack in continuity in the management of SJU and underutilized terminal space.
The Need for Transformation

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 Restore infrastructure 

investment and world class 

standards. 

 Driver of economic growth and 

competitiveness.

 Re-establish the financial stability 

of the PR Ports Authority. 

 Deteriorating infrastructure and 

need for O&M best practices. 

 Weakened position of Puerto 

Rico as a destination and adverse 

effect in economic growth.

 Ports Authority without credit 

capacity and nearly insolvent.

Objectives of P3 for SJU

 Situation Objective
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Need to Restore Investment in SJU

Deterioration Parking Lot

Parking lot stairways

Safety Concerns

Leaking roofs

2007 2008 2008 2009

Junk

Credit

Rating

Aaa

A3

Baa3 Baa3

Puerto Rico Ports Authority Credit Rating

In 2010, Moody's 

determined a negative 

outlook on it’s ratings 

and the GDB had to 

redeem the bonds of 

the PA. 

In 2010, GDB* provided 

additional funds to PRPA 

due to a negative watch 

from Moody’s and a real 

risk of downgrade.

Moody’s Credit Ratings

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* GDB = Government Development Bank for Puerto Rico. 

Pipe Lines
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Need to Increase Traffic and 

Create Jobs

 The passenger base at the airport has been the "same" for 20 years.

 The number of enplanements has remained in the range of 4-5 million passengers since 1990.

 Increasing the number of visitors by 400,000 would have a significant impact on the local economy*:

 Increase Puerto Rico’s gross product by $276 million.

 Create 3,772 new jobs.

 Increase government revenues by $34 million.

Trend in Total Enplanements

In millions

4.60

5.10 5.20

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Fiscal Years

Annual average since 1990: 4.7 MM

Annual average for 2000-2010: 4.8 MM 

4.2

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* Source: Luis Muñoz Marin Airport P3 Project Desirability and Convenience Study, P3 Authority, www.p3.gov.pr. 
Benefits of the P3 for SJU

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Positive Change for all Stakeholders

 Preferred destination connectivity: Caribbean Region, USA and global routes.

 Increased economic activity: more passengers, cargo logistics, long-term investments. 

 Fiscal restructuring: restructuring of the PR Ports Authority.

Airlines

General

Public 

(Passengers)

Puerto 

Rico

 Travel experience: enhance travel experience and customer service. 

 Clear focus: convenience, efficiency, safety, and high quality services.

 World-Class Operations: application of best practices and clear operating standards.

 Rates and charges: significant value due to savings and greater transparency. 

 Holistic approach: comprehensive Use Agreement and equal set of rules.

 Aligned interests: better alignment of commercial interests.
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Airline Participation

 Air Transport International

 Gulf and Caribbean Cargo

 ExpressjetAirline

 Pace Aviation

 TradewindsAviation

Supporting airlines and discussion participants

American Eagle

Potential parties to be involved

Puerto Rico achieved the 65% consensus to support a P3 process, as required by the Pilot Program of the Federal Aviation 

Administration on metric weight carried (MAGTOW). This consensus was crystallized by signatures of a non-binding MOU.

* MAGTOW = Maximum Allowable Gross Take off Weight.

AirTran

American Airlines

 USA Jet Airlines

 ViequesAir Link

 Amerijet International

 ABX Air

 Arrow Air

 Cape Air

 Spirit Airlines

Delta

Federal Express

UPS

JetBlue

US Airways

United/Continental
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1. Concession Terms:

2. Capital Improvements:

Keep moderate term below 50 years and as short as 

feasible. 

Snapshot of the Airport P3*

Require immediate improvements to rapidly enhance 

conditions and allow for long-term life-cycle upkeep. 

3. World Class Standards:

Require operating standards that integrate world class levels 

and best practices.

4. Route Development: New air transit routes, an increase in air traffic and global 

connections. 

* Private-Public Partnership’s basic elements. Terms are subject to change.
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Preferred of 

Bidder 

FAA Final 

Review

Projected Timeline*

 RFQ Due Date: August 8, 2011 

 Shortlisted bidders: 6 shortlisted out of 12 potential bidders

 Issued Request for Proposals (RFP): Oct 2011

 Draft Transaction Documents: Nov 2011 

 Site Visits, Due Diligence, Technical Meetings: Nov-Jan 2011

 Bidders meetings with FAA and Airlines: Dec 2011-Jan 2012

 Selection of preferred bidder in accordance to P3 Act

 Commercial Close

 Submission of final application to FAA Pilot Program

 60 days of review before final approval by FAA



In Progress

Next

Completed

Next

=

Request for 

Proposals and 

Tender Process

Bidder 

Qualifications

(RFQ)

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* Subject to change and revision.
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Conclusion

 P3 for SJU is based on the right reasons: 

 Economic growth; 

 Competitiveness; and 

 Financial stabilization. 

 Achieve a world class P3 project with a solid transparent process.

 Support for the process can be key in achieving this much needed economic development 

measure: 

 Facilitating understanding of benefits to airline industry; and

 Facilitating understanding of the benefits to other stakeholders (industry leaders, general public, passengers, organized labor,

investors, airport operators, and others).
Appendix

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General Approach to 

SJU P3 Project

Tourism 

Company

P3 Authority and 

Government 

Development Bank 

Department of 

Economic 

Development 

Ports 

Authority

Luis Muñoz 

Marín Airport 

World Class 

Airport

•Airport as a central driver of 

positive change. 

• Focus on economic 

development objective. 

• Strong tourism platform. 

• Long-term partnering with 

Puerto Rico and PRPA.

• Financial and contract 

monitoring expertise to ensure 

compliance.

 Holistic Approach for Global Connectivity  Ensuring Success