Does privatization make Brazilian airports more efficient

Airport concessions to private management began in Brazil in 2011 to address infrastructure bottlenecks and the need for investments. Productivity improvements after privatization need to be measured and efficiency gains can help to identify strategic points where to intervene both in current and upcoming concessions. However, previous studies have applied neither the Slacks-Based Measure Data Analysis Envelopment models nor the second stage Tobit regression to evaluate airport efficiency, especially in the context of Brazilian airport privatization. The objective of this study is to verify if privatization contributes to improving Brazilian airports' productive efficiency compared with public airports, using variable slacks and identifying new socio-economic variables that may influence the productive efficiency index. A two-stage SBM-DEA approach found that only 40% of the sample among 28 airports are efficient, evidencing poor management overall, and the slacks show the sectors that need most attention and investments. Based on the productive process and the sample evaluated, the study concludes that privatization of Brazilian airports did not improve their production efficiency. A revision of the contracts in the first round of concessions is suggested, as contractual obligation may result in lower production efficiency.