Privatising The Spanish Airports

The partial privatisation of the national airports agency, Aena, is a matter which should be of interest to us all and so not just to the millions of tourists who pass through Son Sant Joan each year. It is a privatisation which, where Palma airport is concerned, could be positive or not so positive. Son Sant Joan is the most profitable Spanish airport. Shareholders like profits and they like to see them grow and to see their dividends also grow.

It is now more accurate to talk about Enaire rather than Aena. Since July this publicly owned company has been in charge of the country's civil airports; it currently owns all the Aena shares, for which offers have been received from the private sector for an initial 21%. The remaining 28% which comprise the partial privatisation (49% of shares) are due to be offered next month. Three "core" shareholders have now been confirmed. They are Banca March, Ferrovial, which is involved with the management of several British airports, and the London-based Children's Investment Fund (TCI).

The response to the offer of this 21% shareholding was, at best, not what the government had hoped for. It would seem that the three shareholders were the only applicants. The remaining 28%, thrown open to wider public subscription, may create greater interest, but there are concerns that the lacklustre start to the privatisation process might be repeated.

A problem for Enaire/Aena is that there are so many airports which aren't profitable, and they include Madrid. There are 49 airports in all and only around a fifth of them make a profit, in addition to which there is debt which many of them have. Palma is exceptional in this regard as it carries no debt. Barcelona, on the other hand, has a similar profit level but a massive debt.

The privatisation has not been met with total approval. The CCOO union is against it, as is PSOE, which is supposedly going to attempt to paralyse the sale in Congress (quite how is not clear). The opposition is all about guarantees of jobs, but there should also be a further concern, which is what investment might be forthcoming as a consequence of privatisation. Is the sale simply a way for the government to improve its accounts? But this question aside, Palma, because of its already high performance, might benefit further. As things stand, it already in a sense gets back much of its profit through the state budget allocation. The worry might be all those airports which are a drain and which demand a diversion of investment, though this assumes that they don't get closed, and it has been argued - justifiably - that Spain has way too many airports.

One airport which is a drain is Menorca's. It runs at a substantial loss - nearly 10 million euros in 2012. It would never be closed because, unlike some airports on the mainland, it is essential both for tourists and residents. But its tourism does perhaps help to explain why it does make a loss. Menorca receives half the number of tourists that Ibiza (together with Formentera) does. Ibiza airport makes a profit, not a huge one but it is profit nonetheless and its debt is small. Menorca's isn't. Over 150 million euros in 2012. Something needs to be done about its performance, and despite crowing in the Balearics that a Mallorcan bank, March, is a shareholder and that a leading Mallorcan hotelier, Simón Barceló, is a non-executive director on the new board will mean a defence of Balearic interests, it has to be accepted that shareholders don't deal with altruism, they deal with returns on investment. Barceló's involvement is arguably the more important - as a non-exec, he would doubtless do the defending - but then both he and March are part of a much bigger business, one with all those other airports that make a loss. The Spanish Government, as majority shareholder, would find itself under fire if it were to appear that the Balearics were being favoured at the expense of smallish regional airports on the mainland. This said, the government has stated in the past that airport closure is not on the cards. Well, that remains to be seen, as indeed does the success or not of the whole share offer.

The March Of Time: Joan March

Fifty years ago, on 10 March, Joan (Juan) March died. He was 81. March is one of the town of Santa Margalida's most famous sons, but the town's attitude towards March is distinctly ambiguous; ambivalent even.

March was and is one of Mallorca's most fascinating characters. His life was one that might well deserve being turned into a film. He was variously a smuggler of contraband and a philanthropist. He was variously left-wing-inclined, then right-wing-inclined. He was imprisoned for his smuggling and managed to escape. He was investigated for having allegedly arranged the assassination of his wife's lover. His death itself, in a road accident, is still the source of debate as to whether it really was an accident or March's own assassination.

In 1916, he was the creator of the shipping and passenger ferry company Trasmediterránea. Better known is that, in 1926, he founded the Banca March. This bank is not just nowadays one of Mallorca's best banks, it is one of Spain's best, indeed one of the world's best. It was March's banking activities that attracted for him his greatest notoriety, or fame if you prefer. He was Franco's banker and acted as one of the chief financiers of Franco's revolt in 1936. He was said to have been the banking intermediary through whom Churchill is claimed to have organised bribes to Spanish generals to keep them sweet and to keep Spain out of the Second World War.

March's Franco connections were, because of his initial political dabblings, somewhat strange. In 1923, he was elected as a deputy for Mallorca to the national parliament for a party known as the Liberal Left. This was the time of the pre-dictatorship of Spain, that of Primo de Rivera. Spain's first dictator was not a fascist, but there was little doubting that his political philosophy was essentially authoritarian. Perhaps this rubbed off on March. Or perhaps his imprisonment under the Second Republic in 1932 was what convinced him to lend Franco his support.

The connections are such that in 2009 the Avenida Joan March in Palma was the subject of demands that it be renamed under the provisions of the law of historic memory which has looked to remove symbols of the Franco era. As far as I am aware, there has never been any official demand that Banca March should change its name.

It is the connections to Franco as well as his early life as a contrabandist that have given rise to the ambiguous attitude towards March in his home town. You will find plenty of people from Santa Margalida who consider March to have been a crook or, at best, a bit of a rogue.

March was most certainly a contradiction. One might be inclined to consider that the establishment of the Juan March Foundation in 1955 was some sort of attempt at atonement. Or maybe it was an expression of self-aggrandisement. Whatever it was, the foundation was nevertheless still a thing of the Franco period. Yet its philanthropic philosophy was evident right from the start; it was one dedicated to culture, science and the arts. It has become, like the Banca March, foremost in its field and is one of Spain's most important cultural contributors.

Because March divides opinion so markedly, it can be difficult to arrive at an objective assessment of what and who he really was. Even someone with a touch of bloodline to March is only grudging in his estimation. Joan Monjo, today the second in command at Santa Margalida town hall, has described him as "Mallorca's most unique man" (if there can be such a thing as most unique) but also as not being representative of the "character of Santa Margalida". March was the brother of Monjo's great-grandmother.

Most unique or simply unique, March wasn't so unique in having been a contrabandist and having acquired a fortune from being so. Mallorca was not exactly unknown for its smuggling at the turn of the twentieth century. It is probably fair to say that above all he was an opportunist. He may have supported Franco, but was he really a supporter? There is a difference.

The arguments rumble on though. For example, it has been claimed that the donation by March of his Casa del Pueblo in Santa Margalida to a builders' guild, which became a headquarters for the Falange, was evidence of support. But it is stretching a point; the donation was made in 1924.

The town will find it difficult to celebrate the anniversary of March's death. You can understand why, but his legacy in terms of Banca March and the Foundation is significant. Yes, he was a rogue, a crook even. Yes, he was Franco's banker, but by goodness, he was an interesting bloke. That film really should be made.


Any comments to andrew@thealcudiaguide.com please.