Airport Concessions and Taxes

Interairports, owned by Grupo Terra's President, Freddy Nasser, and operated by Edgardo Maradiaga, has had the concession on airports in Honduras since 2000 and the current concession was set to run untiil 2020.

Now, Interairports has announced it will invest $129 million to build a passenger and cargo terminal at Soto Cano Air Base, also known as Palmerola, about 82 kilometers north of Tegucigalpa.

This would become Honduras's fifth international airport, joining those at San Pedro Sula, La Ceiba, Roatan, and Tegucigalpa.

Interairports, or Aeropuertos de Honduras as it now wishes to be known, announced a $300 million investment in Honduras's airports, including $52 million for San Pedro, $42 million for Roatan, $45 million for La Ceiba, and $7 million for Tegucigalpa.

The proposed investment in a modern terminal and separate cargo area at Palmerola that will be able to accommodate up to 1 million passengers and aircraft up to the size of 747s and Airbus 330s has a projected $129 million price tag.

Curiously, that leaves $25 million of the proposed $300 million investment unaccounted for.

Back in 2008, Interairports told the Honduran government that it would take rather more to build the facilities contemplated in Comayagua: $166 million, to be exact.

Now, with the new proposal and new numbers, Interairport's concession has been extended by the Honduran Congress to 2040, without discussion or bidding by other companies.

The concession extension was a quid-pro-quo for Interairport's announced $300 million investment.

Perhaps needless to say, this deal does not follow government regulations for large contracts.

We can't help wondering how much of the construction work will be outsourced to Grupo Terra's construction division, thus moving the "investment" in airport improvements back into Freddy Nasser's pockets.

But there is a much more immediate return on the investment that was part of the deal.

After extending the concession for twenty years, Congress passed a bill nearly doubling of the airport exit tax paid to Interairports for operating the airports, from $37 to $60.30. This tax is separate from the security tax, collected to pay the cost of required airport security, and the immigration tax, paid to the government.

This would generate about $36 million/year for Interairports at current passenger levels, or, assuming passenger levels stay the same, $1.044 million over the life of the concession.

This move makes Honduras's exit tax the highest in Central America, where comparable charges range from Panama at $40 to El Salvador at $20. An executive of Interairports, who did not wish to be named, was curiously inaccurate when he told La Prensa that:

"the airport taxes in Central America revolve, with the exception of Panama, around 60 dollars and by this measure we are standardizing Honduras with the rest of the region."

This is really new math: $20-$40 is "around $60".

An Interairports executive told La Tribuna that this increase was appropriate because Honduras's 600,000 annual passengers was "very low." That's supposedly the total number of passengers at all four airports. But there's also something wrong with this number, since publicly available sources cite over 600,000 annual passengers at Ramon Villeda Morales airport in San Pedro Sula alone (here, here, and here, for example)

By way of comparison, Juan Santamaria Airport in Costa Rica serves about 4.1 million passengers annually. Tocumen airport in Panama serves 3.1 million passengers annually. El Salvador International Airport in El Salvador gets about 2 million passengers annually. Augusto Sandino International airport in Nicaragua serves about 1.1 million passengers annually.

Congress extended the concession to 2040 as part of a deal between the Executive Branch and Interairports, approved in the November 29 Council of Ministers meeting.

The question of why Honduras needs an airport in Comayagua alone that can handle 1 million passengers annually when that's more passengers than all four airports combined supposedly see now is left unanswered; as is the question of why Congress approved the exit tax increase without debate.

How this will affect tourism in 2012 is also unknown, but at least here, there's a clear indication of what the answer likely will be. In Europe, where high airport taxes are all the rage now, airlines expect a 5% reduction in passengers next year.

Juan Bendeck , president of the Camara de Turismo de Honduras (CANATURH), calls the new tax "robbery". But in this case, the robbery is taking place in plain sight.

Holy Week, Tradition, and Cultural Tourism

Honduran newspapers are publishing accounts of the annual observance of Holy Week, that runs between Palm Sunday and Easter. Religious processions carrying carved and painted images of saints will wind their way from major churches.

In a few places, their route will be decorated with brightly colored imagery created out of dyed sawdust. The most traditional location of these alfombras of tinted sawdust is Comayagua. According to an article in La Tribuna, by Friday there will be 43 of these artworks along the streets of the city.

International tourist publications encourage visitors to come to Comayagua this week, stressing its well-preserved colonial buildings, products of its long history as the capital of Honduras, before the mining town Tegucigalpa took over this role. Comayagua is represented as Honduras' equivalent of Antigua Guatemala, where Holy Week processions and the creation of sawdust carpets brings enormous numbers of tourists, an estimated 1.5 million in 2008. News reports claim that 50,000 to 60,000 tourists are expected to visit Comayagua for its celebrations.

The creation of alfombras has because a focus of national identity and nationalistic pride. Supported financially by the Ministries of Tourism and Culture, the creation of similar street decorations in the capital city, Tegucigalpa, is described by El Heraldo as an opportunity for

residents of the capital city and tourists to be able to appreciate this impressive artwork, that there is no need to envy that of other countries.

Yet as another article in La Tribuna about Holy Week observations in Tegucigalpa notes, the tradition of making alfombras has shallow roots, having been introduced only about forty years ago in Comayagua. The initiation of these religious artworks is attributed to Miriam Elvira Mejía, in 1963. A website created by her son describes her introduction of a custom of her native El Salvador. While the practice continued in Comayagua from then on, its adoption as an emblem of Honduran culture marketed to tourists is much more recent. Fifteen years ago, tourists visiting Comayagua for Holy Week reportedly numbered only 3,000 to 4,000.

Secular entanglements of what began as a religious tradition are visible in many ways. El Heraldo reported on alfombras in Tegucigalpa, some made by members of the parish, others sponsored by the Metropolitan Committee of the Foundation for the Honduran Museum of Man. Some of the planned alfombras will use innovative materials, flowers, seeds, and fruits, to create more effects than possible with the dyed sawdust that is more typical. The incorporation of varied materials is described as making these street carpets a celebration of the harvest, a surprisingly secular role for what are otherwise monuments to the Passion of Christ.

The variety of materials being introduced in Tegucigalpa recalls the decoration of floats in civic parades in the US, as does the sponsorship by secular organizations-- this year, according to El Heraldo, including Pepsi, the general store Larach & Compañía, the hotel group Plaza San Martín, and the bottled water company Agua Azul.

Nor is that the only secular aspect of the alfrombras of Tegucigalpa. The same article quotes Elder Rissieri, in charge of creating a 540 meter long alfombra in Tegucigalpa, saying that the "social theme" this year, "Honduras united in the faith of Christ", addresses tensions created by the coup d'Etat (here described simply as "happenings", acontecimientos):

"By means of this work we want to invite union by means of the Christian faith. The incidents that happened in recent months have been the cause of division within society and we want to unite it in the faith."

Holy Week thus presents a melange of colonial tradition, modern adaptation of a religious practice typical of Guatemala and El Salvador, and overtones of secular parades. And this year in particular, the urgency of increasing tourism income in the wake of the economic disaster brought on by the coup d'Etat is especially evident.

Newspaper coverage documents a particular emphasis by the Ministry of Tourism on increasing internal tourism during Holy Week. An article in El Heraldo quotes the Minister of Tourism, Nelly Jerez, encouraging internal tourists in Tegucigalpa, saying the government has granted a week of holiday for that very purpose. La Prensa's article encouraging internal tourism prominently mentions the alfombras of sawdust to be installed in the streets of Santa Rosa de Copán, another colonial city in western Honduras.

The self-conscious promotion of these events to the Honduran public underlines the blurring of lived tradition and commodified culture that has become ever more evident as tourism rose to the third greatest source of external income. As yet another article promoting internal tourism this Holy Week put it, based on an interview with Juan Bendeck, president of the National Chamber of Tourism (CANATURH):

At this time it is important to take pleasure in family and rediscover a noble and generous country that offers above all human quality.

Before taking your vacations, think of the social welfare that will be left to the country if you decide to undertake internal tourism and take the decision to explore this Honduras that is yours, and that awaits you with open arms.

Convert yourself into an ambassador for Honduras in the world, get to know the native soil that saw your birth... because it's all here!