Corporación América Airports Secures Long-Term Extension and Updated Economic Framework for Armenia Airport Concession
Corporación América Airports S.A. (“CAAP” or the “Company”), one of the world’s leading private airport operators, has announced a significant amendment to its long-standing airport concession in the Republic of Armenia. Through its subsidiary Armenia International Airports CJSC (“AIA”), the Company has entered into an amendment agreement with the Government of the Republic of Armenia (“GOA”) to revise and modernize key terms of the concession agreement governing the operation of Zvartnots International Airport in Yerevan and Gyumri Shirak International Airport.
The original concession agreement, which was signed on December 17, 2001, marked a transformative moment for Armenia’s aviation infrastructure, enabling private-sector investment, operational modernization, and service quality improvements at the country’s principal international gateways. The newly agreed amendment represents the next phase of this partnership, establishing a long-term framework that enhances economic visibility, supports substantial capital investment, and aligns the concession with evolving international best practices in airport regulation and infrastructure development.
A 35-Year Extension Providing Long-Term Visibility
One of the most consequential elements of the amended agreement is the extension of the concession term by 35 years, pushing its expiry to December 31, 2067. This material extension significantly lengthens the remaining life of CAAP’s concession portfolio and provides the Company with long-term certainty over the operation and development of Armenia’s key airports.
In addition to the fixed extension, the amended agreement introduces the possibility for future discussions regarding additional extensions, subject to mutual agreement between AIA and the Armenian government. This provision underscores the long-term strategic partnership between the parties and creates optionality for further alignment as Armenia’s aviation market continues to mature.
From an investor and infrastructure development perspective, long-duration concessions are critical to supporting capital-intensive projects. The extended term allows AIA to plan, finance, and execute major infrastructure investments with greater confidence, while enabling CAAP to optimize returns over multiple decades.
Transition to an Inflation-Based Regulatory Regime
Another cornerstone of the amendment is the transition from the prior single-till regulatory framework to a new inflation-based regime for airport tariffs. Under the amended terms, annual tariff adjustments will commence in April 2027, introducing a transparent and predictable pricing mechanism aligned with inflationary movements.
This shift represents a structural improvement in the regulatory framework governing Armenia’s airports. Inflation-based tariff regimes are widely used in mature aviation markets, as they help preserve the real value of airport revenues while ensuring that operators can continue to invest in infrastructure, safety, and service quality.
The move away from a single-till model—where aeronautical and non-aeronautical revenues are pooled—toward a more balanced and formula-driven approach enhances financial clarity and reduces regulatory uncertainty. For CAAP, this change strengthens the long-term sustainability of the concession and improves alignment between operational performance, investment obligations, and economic outcomes.
$425 Million Capital Investment Program Through 2033
Central to the amended agreement is a new Master Plan and associated capital investment program aimed at supporting the future growth of Zvartnots International Airport. Under the revised terms, AIA is required to submit a comprehensive Master Plan by January 31, 2026, detailing infrastructure development, operational improvements, and long-term capacity planning.
The Master Plan will include a $425 million capital investment program, to be executed by 2033, with a strong focus on expanding and modernizing facilities at Zvartnots International Airport. Planned investments are expected to address terminal capacity, airside infrastructure, passenger experience enhancements, operational efficiency, and long-term scalability to accommodate traffic growth.
Importantly, the agreement establishes that the Master Plan will be updated every five years, ensuring that infrastructure development remains responsive to changing demand patterns, airline requirements, and technological advancements. This rolling planning framework allows for flexibility while maintaining a disciplined, long-term development strategy.
The scale of the investment program reflects CAAP’s commitment to Armenia’s aviation sector and positions Zvartnots as a competitive regional hub capable of supporting increased connectivity, tourism, and economic activity.
Economic Equilibrium and Rebalancing Mechanisms
A key enhancement introduced by the amendment is the implementation of a formal economic equilibrium and rebalancing framework. This mechanism is designed to protect the financial balance of the concession in the face of unforeseen events or structural changes beyond the operator’s control.
Under the amended agreement, compensation mechanisms may be triggered in the event of:
- Force majeure events, such as natural disasters or extraordinary disruptions;
- Passenger traffic declines below defined thresholds;
- Regulatory or tax changes that materially affect the financial equilibrium of the concession; and
- Additional capital investments approved by the Government of Armenia beyond the agreed investment program.
These provisions reflect internationally recognized principles in public-private partnership (PPP) agreements, ensuring that risk is allocated appropriately between the public and private sectors. Compensation may be provided through tariff adjustments and/or extensions of the concession term, offering flexibility in how equilibrium is restored.
For CAAP, the inclusion of a clearly defined rebalance mechanism significantly reduces downside risk and enhances the bankability of the concession. For the Armenian government, it ensures continuity of service and sustained private-sector investment, even in challenging market conditions.
Modernized Airport Charges and Tariff Adjustment Formula
The amended agreement also introduces a more sophisticated framework for airport charges and tariff adjustments. All tariffs will continue to be set in Euros, reinforcing currency stability, and will be subject to annual adjustments beginning in April 2027.
The tariff adjustment mechanism is based on a parametric formula that considers inflation indices in Armenia, the United States, and the European Union, as well as relevant exchange rates. This multi-index approach reflects the international nature of airport operations and costs, which are often influenced by global supply chains, foreign currency exposure, and international service providers.
By linking tariffs to multiple inflation benchmarks, the agreement provides a more accurate reflection of cost dynamics while maintaining transparency and predictability for airlines and other airport users.
Expanded and Clarified Commercial Rights
Beyond financial and regulatory provisions, the amendment also updates and clarifies AIA’s exclusive rights to operate and commercially exploit a broad range of activities at Armenia’s airports. These rights extend across both aeronautical and non-aeronautical domains and are central to the long-term value creation of the concession.
In particular, the agreement confirms AIA’s ability to develop and operate:
- Logistics platforms and cargo-related infrastructure;
- Free economic zones and commercial real estate developments; and
- Future vertiport infrastructure to support emerging electric vertical takeoff and landing (eVTOL) operations.
The inclusion of vertiport infrastructure reflects forward-looking planning and positions Armenia’s airports to participate in next-generation mobility solutions as urban air mobility technologies mature.
The amendment also refines termination and indemnification mechanisms, providing clearer definitions and processes under various scenarios. These clarifications enhance legal certainty and reduce the risk of disputes over the life of the concession.
Strategic Importance for CAAP’s Global Portfolio
Commenting on the amendment, Martín Eurnekian, Chief Executive Officer of Corporación América Airports, emphasized its strategic significance for both the Company and its shareholders.
This amendment, including the material extension of 35 years, represents an important milestone for our concession in Armenia and is a testament to the high-quality operational standards of CAAP,” Eurnekian said.
He noted that the updated framework enhances long-term visibility and reminded stakeholders that the revised regime includes protections designed to preserve the economic equilibrium of the concession.
The amended agreement establishes a clear tariff adjustment mechanism and provides the tools necessary to support our continued commitment to the development and modernization of Armenia’s airport infrastructure,” he added.
Eurnekian also highlighted the transaction’s contribution to shareholder value, noting that the extension materially increases the average remaining life of CAAP’s concession portfolio.
Strengthening Armenia’s Aviation Future
From a national perspective, the amended concession agreement supports Armenia’s broader economic and connectivity goals. By securing long-term private investment, modern regulatory mechanisms, and a clear development roadmap, the agreement helps ensure that the country’s main international airports can meet future demand while maintaining high safety and service standards.
As air travel continues to recover globally and regional connectivity gains importance, Zvartnots and Gyumri airports are expected to play an increasingly central role in tourism, trade, and economic integration.
A Long-Term Public-Private Partnership Model
The amendment to the Armenia International Airports concession agreement exemplifies a mature and evolving public-private partnership model—one that balances investor returns with public interest objectives. By extending the concession, modernizing the regulatory framework, and embedding robust risk-sharing mechanisms, the agreement creates a durable foundation for decades of continued collaboration.
For Corporación América Airports, the transaction reinforces its position as a leading global airport operator with a diversified, long-duration portfolio. For Armenia, it secures a committed partner to support the long-term development of critical national infrastructure well into the second half of the century.
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