Aena SME SA
MAD:AENA
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Aena SME SA
Earnings Call Analysis
Q2-2023 Analysis
Aena SME SA
The company has reached passenger numbers aligned with 2019, which was a record year from every angle, indicating a recovery back to pre-pandemic levels. There is an anticipation that passenger numbers could end the year on par with or slightly above 2019 figures, although growth rates have tempered during the summer months due to airline strategies and operational issues. In regards to revenue, the figures are already exceeding those of 2019, with sustainable growth particularly in commercial revenue per passenger.
EBITDA has matched the record level of 2019, with the margin also projected to potentially reach pre-determined objectives earlier than planned. The expectation was to achieve an EBITDA margin of 55% by the end of 2024 or early 2025, but these figures may be met sooner. While some non-recurring financial results may not be sustainable, the net result is already outperforming 2019 figures, with a positive trajectory observed in both absolute terms and when compared with 2019. The second quarter showed a more pronounced recovery relative to the first quarter, indicating a positive trend for the company.
All business areas are performing well, with the analytical segment showing robust levels despite tariff evolution and dilution effects, which are expected to be recovered in two years. Although current margins are admittedly lower than pre-COVID rates, they are considered to be a realistic outcome. The commercial business has regained strength, achieving similar margins to 2019's first half. The international sector, while different in dynamics, has doubled its EBITDA contribution compared to 2019. In terms of traffic composition, the recovery is balanced across different segments indicating healthy diversity in traffic sources.
Commercial revenue is robust, showing a 19% increase over 2019 figures. Excluding accounting impacts, the business activity is notably strong, with new contracts contributing to the positive trend. Operating expenses, on the other hand, have grown by approximately 12% when compared to pre-COVID levels, factoring out the exceptional element of electricity which has significantly decreased. The increase reflects higher activity levels and full terminal operations, and it is deemed as efficient management and expectations are in line with pre-determined objectives.
The management has expressed confidence in achieving and even possibly exceeding a 55% EBITDA margin ahead of schedule, demonstrating effective operational handling. This confidence is supported by recent achievements and control over operating expenses which are in tune with realistic management capabilities and strategic planning.
In response to media speculation regarding potential operational changes, such as the separation of Barcelona airport from the company's control, executive leadership has dismissed these as unfounded and has reassured shareholders of the company's solid legal framework and the strength of its network model, emphasizing the overall stability and good standing of the company.
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Thank you for standing by. My name is Bhavesh and I'll be your conference operator today. At this time, I would like to welcome everyone to the Aena 1H 2023 results presentation. At this time, all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions].
Thank you, Mr. Ignacio Castejón, Finance Director, you may begin your conference.
Thank you very much, and welcome everyone to the first half year results for year 2023 of Aena. Without further delay, I'll pass the floor to our Chairman and CEO Maurici Lucena and to Jose Leo, our CFO. Thank you very much.
Thank you, Ignacio. Good afternoon, everybody. Let me please formally welcome you all to our 1H 2023 results presentation. It's a real pleasure being today with all of you. I as usual will start with the key highlights before I give the floor consecutively to Jose Lea and also before the Q&A to Ignacio Castejón. So if you allow me I will start with traffic.
Concerning the first half of 2023, I think that traffic and of course, as a consequence also, all the financial results have been performing very well. In terms of traffic, Aena as a group, as a global group increased its traffic by 22.8% up to 144.1 million passengers. It implies our recovery again globally of 100.5% compared to 2019. So we can, finally and again, confirm that the COVID effect and the COVID wave as ended. So this is very good news.
Specifically, concerning the Spanish network traffic increased up to 129.4 million passengers. It represents a recovery compared to 2019 of 101.2%, London Luton 90.3%, recovery. And Brazil, and now I'm referring to the northeast Brazilian airports not including yet the new 11 Brazilian airports. So again, in Brazil, the first semester of 2023 represented a recovery of 100.5%.
In Spain, we still are facing kind of a symmetry between domestic traffic and international traffic but the gap is closing. Domestic traffic performed equivalent to 107% compared to 2019, and international traffic reached recovery of 98.5%. Therefore, I can confirm that we clearly stick to our 2023 traffic guidance for the Spanish network, which I remind you that it's between 94%, 104% in terms of 2019 traffic. And of course, I think that we have to be realistic and we shall not forget the potential headwinds ahead of us. I'm referring to the evolution of the cost of living. There could be in the future, supply side problems such as strikes, staff issues on aircraft deliveries problems.
However, I also want to be very clear stating that it seems that many, many airlines are still very confident that the current trend continues in the last quarter 2023. So, I think that the summary would be that we are realistic, but we are still pretty optimistic in terms of the traffic for the rest of the year.
I now leap to Financials. You can see in the press release this morning that total consolidated revenues for the Aena Group reached €2.3 billion. Aeronautical revenue stood at €1.3 billion, commercial revenue €715.3 million, real estate revenue €47.8 million and international activity €287.5 million.
On the costs side which is very important in context where the inflation is high. We are pretty satisfied I can say because the total OpEx stood at €1.1 billion plus 8.1% in comparison with the first half of 2022. But actually, I can say that of course apart from some inflationary pressures, you should remind that the traffic growth made Aena reopen terminals and subcontract many activities that did not exist in the first half of 2022. That is why I was saying that we are pretty much satisfied with the evolution of the OpEx. Again, I repeat an inflationary in them -- in an inflationary context.
The EBITDA stood at a noteworthy €1.2 billion. And this is very important, the EBITDA margin closed at 50.2%. This EBITDA margin is one of the highest in the airport industry. And let me stop just a few seconds at this point, because I would say that both in terms of total revenues on the EBITDA margin, I can expect and strongly expect that we will reach our strategic plan targets, I would say, well ahead in time.
I think that we are in a position to beat the targets that we define in the context of our strategic plan, both in terms of revenues, and I repeat, in terms of EBITDA margin, which I guess is very good news for our shareholders.
All in all, the net profit in the first half of 2023, reached €607.7 million, confirming the prospects for an attractive dividend in 2024. And the net cash from operating activities stood at €1 billion. I would say in short that the main drivers of our EBITDA, and of our net profit, where traffic growth, they're very positive commercial performance. And of course, if we were lucky, every one that we faced lower electricity bill. And we also have where we will have time afterwards to explain what specifically it is. We also had the positive financial results as it is true that it was not a large one. But it really made a marginal difference, both in terms -- not in terms of EBITDA I'm referring now to the net profit. We'll explain it later on.
Now, I pass -- I now move to the commercial activity. You can see when you read our results that we experienced very robust growth trend of commercial revenues, I would say that it was based on first, the commercial sales of the first half of 2023 exceeded 2022s by 7.6%. Second, all the material commercial businesses as lines surpassed 29 teams, and third variable and fixed rents invoiced in the first half of 2023 beat 2022 figures by over 23%.
And from a qualitative perspective, I would say that, apart from the evident traffic growth, I think that their progressive recovery of the U.K. passengers under new non-European union status and duty free was an important qualitative factor. Another one was the reopening of most of our specialty shops that remain closed because of the financial hurricane as a consequence of the COVID crisis.
And also, I would underline that we have experienced very welcome increase in passenger penetration rates in food and beverage.
And finally, I would also like to highlight qualitatively, the price increases in car parking and VIP lounges. So I think it's been a very good performance of our commercial activity. And from again, qualitative perspective. I would like to remind you of that we keep including and we are proud of it, the minimum annual warranty arrangements as a fundamental element in our contractual framework. In figures I would underline that, since November 2021, we have awarded more than 280 contracts in food and beverage, specialty shops, and financial services with a minimum annual guarantee rents increase of, for instance 130% in 2023, in comparison with 2019.
On the other hand, yesterday, we held a meeting of the Board of Directors and Board of Directors made two very important decisions. First, we approved the airport charges proposal applicable from the 1 March, 2024 setting the adjusted annual maximum revenue per passenger, the famous IMAAJ for 2024 at €10.35. And second, concerning the duty free tender and leaving aside the -- let's say, media noise that we experienced a few weeks ago, we are very happy to announce that we yesterday awarded the duty free contracts for Madrid and Catalonia and it means that the whole business I'm now referring to the whole duty free business for Spain.
I will just give an example, the minimum unwell warranty rents for 2024 are 16% higher than in 2023. So I think it's very good news for Aena, very good news for our shareholders. Because all in all, it means that the new contracts, again, I'm referring to duty free, firstly, preserve our business model of minimum annual guaranteed rents. And secondly, for instance, I would highlight that it means that Aena will perceive revenues for a minimum of €6.3 billion in the period from 2024 to 2035.
I'm now starting the end of my presentation. I would like to highlight two milestones. The first one is in the international and is referred to the International and finance -- the financial international activities. In Brazil, you know that we were awarded last year, the concession for 11 airports, including Congonhas, you know that the transfer of the facilities to Aena will happen during the second half of this year.
And the second element I would like to highlight is related to financing activities. Aena has recently executed sustainable syndicated credit facility for €2 billion that has been signed by 14 national international financial institutions. I'm sure that we will have time to discuss any other issues that you want to me to comment on. But now I stop here. And I just would like to thank you for your attention. Thank you very much.
Okay. Good afternoon, everybody. I will carry on providing some more detail on the key messages that our Chairman and Chief Executive already made by way of introduction.
I will just start by sharing with you what I believe are the main headlines or views that can come out of this particular slide that you have in front of you. What is clear is that now we have to compare ourselves with 2019. We have been doing that already for a while probably to a certain extent, that was an academic exercise. But now is a very realistic one. Clearly the reference to us now is 2019. That was the record year from every angle. I say that because we are back on track, the similar level.
To start with, the passenger numbers are now in line with the 2019 numbers. As the Chairman said, we maintain, we keep in place the guidance for the rest of the year. But clearly wouldn't be -- it wouldn't be surprising to see the year ending there that about the 2019 figures are slightly, slightly over. It is true that the summer months are showing in slightly less, let's say aggressive growth rate for reasons that we can discuss. Most of them driven by, in our view, the offer side of the business, the airlines strategies and the airline yield, let's say a strategy to pull them away plus other bits and pieces driven by some operational issues or issues coming from the -- let's say the provision of new aircraft.
The revenues are clearly up on the 2019 figures, we will see that later on that there is an element of accounting. As a result of the way we are now, spreading the minimum guaranteed rent revenue over the year. But this is now really, really minimal, is not a big deal. So the headline here is that we are already exceeding the revenues of 2018 with a similar level of traffic, that means that the deals are improving, particularly the commercial revenue per passenger figures are growing up and in a way that we believe is fairly sustainable.
EBITDA is now once again at the 2019 level. And that's very telling because 2019 was the record year with 2.7 -- what more than €2.7 billion in EBITDA. So the question mark would be, will we be able to deliver similar level of EBITDA now. While I will stop short of confirming that, where is clear is that the both the 2019 EBITDA figure, and the 55% margin that we set ourselves as objectives for the strategic plan, and that we were expecting to deliver by 2024, let's say, the far end of 2024, or beginning of 2025, are very likely to be reached earlier than that. And net result is also already exceeding 2019 figures is true. And this has been already mentioned by the Chief Executive Officer, that we have now a number of one-offs in the financial result line, that -- those are unlikely to be, let's say sustainable, or they are driven by a number of things that have been disclosed, and we can discuss later on.
But in total net of profit net of taxes, that's around €50 million, €51 million, you take that away, it's still your -- our net result is exactly flat on 2019, which is frankly, quite something. As we can see later, but more importantly, the trajectory is in the positive, because it's going positively because the second quarter has been much better quarter than the first quarter both in absolute terms, which is something you would expect, because of the seasonality. But more importantly, when in relative terms where we are -- because we are improving vis-à-vis 2019 more in the second quarter than in the first quarter. So in summary, we are in the right trajectory, the other piece that is clearly faster than we originally planned.
Can we move on to the next slide? Okay, in terms of the performance of the different business areas, I think, generally speaking, all of them are performing really well. It's true that our analytical element of the business is dragged to a point because of the tariff evolution and also, there is an element of dilution that we'll recover in two years time. But still is performing really well and reaching levels that are not very far from the 2019 figures. The margin is clearly slightly below 49% in 2019 at this time of the year 29% now, but as we said before, it would be a realistic as we said a number of times already it would be unrealistic to expect the margins that were achieved before the COVID to be achieved now. And this is something that I want to stress again and to reiterate it. So I call this good performance in terms of the art of the possible of what we believe is realistic and achievable.
The commercial business is back on track, we are exactly at the same margins reaching the same margins, there are there abouts that we enjoyed in the first half of 2019. Now 77% at that time 78%. So, we are back on track. And this is really good news and probably one of the key features of the performance of this business post COVID.
And in terms of the international side of the business, I just want to mention that obviously is a completely different kind of animal, the dynamics are different, but the margins are affected by the fact that they normally we are running concessions, but still, this is contributing double the EBITDA levels in absolute terms that we used to contribute in 2019. And this is good news, because this is part of our strategy.
Moving on. One more please. Okay, obviously, as we have discussed already, the traffic data, I just want to say that if you take a look at the pie charts, in terms of the relative weight of the different traffic segments, we are back to the 2019 composition there are there abouts. So, we can say that it is true that the international traffic has been lagging behind is catching up already. It will take some time to catch up in full, but it is not very far from the standard composition of traffic.
If you look at for instance, long haul traffic is now north of 9%. I think in 2019 was similar, was pretty much north of 9%. The European traffic is not very far from 2019. I think in 2019 was -- let me double check but to be precise but it was 59.7% now is 57.6%. And I want to stress this because this means that the international traffic is catching up. And this is very good news because for close to one year, the main driver for the traffic growth was the domestic traffic. It's true that if you look at the right-hand side of the slide, what is absolutely clear is that the leisure traffic, those airports that are -- that offer mainly leisure that they are, let's say used by leisure passengers clearly are exceeding the recovery of Madrid-Barajas or the Barcelona airport. But once again, they are close to catch up sooner rather than later.
So we can move on. I won't dwell on this, although I will be more than happy to discuss any of this information later on. So let's go on to the next slide, the commercial revenue summary. This slide is telling us, we consider this slide a very important one, because after the messy expedience of the accounting issues, we now want to be very clear about what is really the performance of the underlying business. This is telling us two things. First of all, that the business activity, when you look at those rents that are regularly on a monthly basis invoiced and collected in the month -- one month later, they are 19% above the 2019 figures and this is well -- this is something that you have been witnessing already for a number of quarters, but this is consolidating now, clearly. Then you have the MAG that for us are very welcome. They are critical to us. It is money clearly, it is cash that will be collected the year after. The MAG are growing 41% which is also good. That means that this is a combination of two things.
First of all, the VF-7 is somehow ineffective, because the traffic recovery is, let's say offsetting its impact and secondly, there are new contracts in place that are even more aggressive about the interests of the MAG, they are offering. This second element is still relatively minor. But clearly it will be growing over the coming months and years to start with, because we have now a new duty free contract in place. And then the accounting things, but you can see that the accounting overall is not having a huge impact. So the revenues are, luckily enough, not very far from the headline revenues, not very far from the reality of the business. But the key message is the commercial business is growing extremely, extremely strongly.
Going on to the next slide. This is the slide that is providing the information on the revenues in accounting terms, how they look like in the P&L. So I want to stop on this. Let's move on to the next.
Here you have once again, they fixed some variable elements of the rent, [indiscernible] rent that are invoiced on a regular basis. And what you can see here is that the recovery, this 19%, that we mentioned before, is now widespread. It's reaching all the different corners of the business, the specialty shop line was lagging as you know, they were lagging because there were a number of shops still closed, but they are catching up. Now in the second quarter, they are already growing 6.4%. Let's say joining the rest of the group.
Clearly advertising is probably the business that is taking longer to get back on track, I think is easy to understand, no need of huge explanations on that. And say the rest of the activities are growing. And indeed they are also providing growth in terms of the revenue per passenger what we have now is 0.74 or €0.74 more per passenger than in 2019.
Moving on to the OpEx. The OpEx is going up by around well, let's move on to the next, probably is much better because the total OpEx is going up as a combination of increase in activity, full opening of all the terminals, all of that partially offset by the electricity expenditure. That is now roughly half the amount we were incurring at this time of the year in 2022. But I think this is likely probably more important for you. This is like this comparing the Spanish network expenditure in 2023, 2022 and 2019, the first half and I would like to focus on the comparison between 2023 and 2019. Excluding electricity which is clearly let's say exceptional element of the equation, we are growing around 12%, the increasing OpEx has been very similar in quarter one and quarter two.
And I know this can be considered as half empty glass or half full glass. I have to say is half full glass. I know some of you might be tired of listening to me but this is what we believe is now the art of the possible. This is the realistic picture of operating our airports that was said by us before the COVID. We rated it that now after the COVID, obviously, with the influence of the recent inflation readings even more so. So growing at double-digit -- low double digit is not surprising is, in our view, performing to the plan is being able to manage the operation efficiently as enabled to extract the best of our management capacities. Frankly, we would struggle to do any better than this. And we believe we are good airport managers.
But on the other hand is clear that the 55% EBITDA margin, which at the end of the day will be the result of this activity, and this management capacity is not only to be achieved is going to be achieved well ahead of the plan. So happy to discuss operating costs later on. But let me be absolutely clear, this is for us a very good result -- a promising result. And this is frankly, delivering what we expected, what we planned.
I would say no need to go any further in my view unless you think otherwise. So I would recommend to open the Q&A session.
Hello, operator. This is Ignacio Castejón from Aena. You can start the Q&A session.
Thank you. [Operator Instructions]. Our first question comes from Cristian Nedelcu from UBS group. Please go ahead with your question.
Maybe the first one on the EBITDA margin of above 55% from 2025 onwards. I guess since your capital markets, the electricity prices have come down meaningfully, you have the duty free contract signed. Can you elaborate a little bit how much above 55% you think you can go. I remember used to be above 60%, pre-COVID. So with that type of margin be possible in a few years again.
The second one on the tariff increase, the 4% that you requested. Could you go a bit in more detail into the moving parts in the IMAAJ. So the adjustments there. I mean, from my notes, I had a tailwind from the K-factor. Then you put on top of it a B-factor. I think he also had some COVID recovery costs in there. I was expecting a bit more than 4%, to be honest. So any more color on the moving parts there.
And I guess the third one, I mean, there's been a few articles in the press these days around the possibility to see a scenario where Barcelona airport would be separated. So it will be no longer operated by Aena. From a legal point of view, would such a separation be possible? How would Aena be compensated? Is there anything in the current regulatory framework that takes into consideration such a potential scenario? Can you give us more color there? Thank you.
Hello, again, this is Maurici Lucena. I will answer the last question for obvious reasons. And I will try to be crystal clear. I think that all that concerning the issue that you raised all that has been published today. This is empty noise. I think that the Aena model is very well established by a strong 2014 law. I think that everybody agrees that the company functions very well. And one of its natural and recognized strengths is our network model. So I would like to really convey a message of tranquility to all our shareholders, both the public and especially our private owners, our private shareholders. This issue is not on the table. It is not on the table. So, again, it's empty noise. I really lament that in this way today that we have released our 1H 2023 results. This could have perpetuated the picture of current moment of the company, which is really, really good. Thank you.
Okay, Cristian, with regard to the EBITDA margin, we never said we will exceed the 55%. We said that 55% was the realistic, best in class achievable. EBITDA margin in the timeframe of the current DORA. Clearly, we think it does have DORA III, a number of things can change may change. So cards might be reshuffled, for instance, there will be no cap on charges. Secondly, the investment, the size of the investment product is likely to be more, let's say more sizable bigger. So a number of things could impact over time in the next DORA period, the margins. But frankly, it is very difficult to anticipate today, whether or not that will end up in us getting back to the 60% plus margin levels, we will try hard, obviously, and we will do our best. But in the time horizon of the existing DORA what we believe is achievable doing our job properly and being efficient, is 55%. No more than 55% but 55%.
What we can see now, is that the original plan that was to reach that level, let's say at the end of 2024. To be more precise, probably first half of 2025 is likely to happen earlier than that. That's what we say, but we are not suggesting that we could get over 55%. If we can, we will do it. And probably the tailwind that could help would be the commercial revenue side of the business but it's early days. So if we likewise stick to the commitment of delivering 55%, we now say that this is likely to happen well ahead of the original plan.
I hope this helps and we are considering everything together. Things you mentioned like the new duty free contractor, well, different things are already factored in the equation.
In terms of the charges, the airport charges increases that we are proposing, I will try to be precise, but probably the best thing is for the IR team to distribute the detail. I will try to provide as much information as possible. Obviously, there are number of numbers. First of all, the IMAAJ, maximum revenue per passenger. The starting point is €10 for this year. And the most relevant factor adding to that is the P Index proposal that we are making. That is 3.5%. 3.5% that has been endorsed by the CNMC. So technically, it's very sound very, very strong. But it's true that that will open a process in which both the DGAC and potentially the government should be involved. But the CNMC has agreed that our 3.5% proposal is absolutely sound and solid. That will take you to 10.35. So you have a number of factors, the key factor this time around is positive, because we have to recover some dilution. And I will stop short of sharing with you every number, but the IR team will provide the details.
All that together will take us to an increase before considering any impact although to the COVID costs, if we take away the COVID costs from the 2023 charges, and we take away the COVID cost from the 2024 charges, the headline increase would be close to 6%. To be more precise, 5.97%. But then we have COVID charges.
In 2023, the COVID charges were applied and were recovered. This year, we are not proposing we are not requesting COVID cost to be recovered. And the reason for that is that we are very close to receive an allowance grant from the European Union. And if we do that, obviously, we cannot charge the airlines. We cannot get twice the same revenue, or the recovery. And we are very close to that. So we are in discussions with the CNMC. And with the airlines we said we are not going to propose to COVID charges to the tariffs. Of course, if we fail to get the allowance, the grant, we will get back to request the inclusion of these costs. But we are pretty sure that this is going to be obtained. So there's no reason to -- well, there is no reason we would be wrong to get this twice.
So with all that in mind, we ended up in €10.35 per passenger for 2024. That means 4.09% increase on 2023. That was €9.95 per passenger.
The next question comes from the line of Elodie Rall from JPMorgan. Please go ahead with your question.
Hi, thanks for taking my questions. So my first one is on traffic. We've seen some lower traffic figures indeed in June. I think you've commented that it is due to airlines prioritizing yields over capacity. So my question is, do you see these as a risk for the rest of the year? And how are the trends in July so far? You could comment on that in terms of bookings and capacity for the winter season as well.
And my second question is on MAG, and the outcome from the tenders that you've just secured. And I wanted to have your opinion about the two specific contracts of Barcelona and Madrid; Barcelona in particular and how satisfied you were by the outcome of these contracts.
And lastly, on the accounting of MAG specifically, I know you said it's not that relevant anymore but in Q1, we had 79 million, in Q2 20 million. So I was wondering what to expect for Q3 and Q4, if you could comment? Thank you.
Hello, again, this is Maurici Lucena. I will answer the question concerning the duty free tender, if I understood correctly. I think that honestly, we are happy with the results of the overall tender. The way Aena contracts or sub-contracts, or assigns contracts to our clients is not the easiest one in the world. It means that sometimes we experience a public noise that with another system of procurement, we would not experience and this is related to our 51% estate ownership. And but I mean for us this is something that we have completely incorporated in the way we function. I think that in the end, the system works well. But in the meantime, sometimes as it was the case with Madrid and Catalonia, when in the first -- at first we could not close the deal that was finally closed with duty free.
Again, we experienced public noise that it is only noise, because in the end, what matters, I think is the combination of the quality of the new or the renewed duty free shops. I think that will be very high, and especially the financial results. So the financial results, no matter how we analyze them are very good. And let's remind that the starting point, I mean, the past contract was very demanding, was very challenging, users have to compare in relative terms, how much money Aena is able to earn from the duty free activity when you compare our duty free shops with other competitors. And with this very demanding, challenging starting point, I think that the figures are very, very good.
And of course, you always want more, but we are realistic, and we define in our first tender, what were our minimum, and these minimums have been overcome. So we are happy on Madrid and Barcelona, it is true that they have finally, just or we have just finally reached a marginal increase in terms of our original tender. But we also knew from the beginning that Madrid and Barcelona were the most demanding contracts among the Spanish -- among the rest. So we are happy, I think it's been a good business for Aena. And probably I must confess that the final result has even been a little higher than I could expect at the beginning. So I'm happy in a double sense. Thank you.
Okay. With regard to traffic, what we have witnessed is and frankly, it is difficult and very difficult to get to the bottom of every single driver or element that is influencing the situation what we see is that the demand is very robust, the demand is there. We see no reason to be concerned about this in the foreseeable future. But what we also see is that from the offer side, there are on one side some issues and on the other side, some strategies. Issues are linked to somebody aggressive airlines or airlines that were very keen on adding capacity aggressively for the summer are struggling to get the aircraft they need. Some other airlines are finding that if they have the more capacity because of the potential industrial conflicts, the origin airports, they may end up canceling flights and they believe that this won't be good for them. So they prefer to be a slightly more conservative at least for the time being.
But also, clearly, the airlines are playing the card of the yield enhancement which I understand. They went through a very difficult time and they are right to get to try hard to get back to their profitability. So the combination of all these factors are, believe me is not easy. This is not something that you can quantify element-by-element. But we believe that the combination of these different factors are leading to, let's say, flying the number of aircraft that is not us is not reaching the level that they originally wanted and expected. But the load factors are going up. I mean, we are reaching load factors that are these historic highs here in Spain now.
The consequence of that is that the growth that we experienced in the first six months, or five months of the year, vis-à-vis 2019 is likely to be a slightly less, let's say, clear in the summit. By no means we are suggesting that this is going backwards, not at all because the demand is there. But it wouldn't be surprising to see modest growth on the 2019 summer or even flattish numbers, it wouldn't be surprising. This is not bad news. This is simply a fact of life. This could happen any year in the past pre-COVID and in the future, because airlines also have the right to do the job the way they want to. So we are not at all concerned by that.
We believe that the guidance we are providing is still valid. And we believe that if you -- let's say make a mathematical average of 94 and 104, you could end up around 99% 100 or 101, you won't be wrong to expect that to be the final outcome of the year.
But finally, let me say, we don't know more than you in a way, obviously we have information we have inputs that are very valid and very valuable. But we don't know what the airlines might be doing in three, four months from now. For the time being, we believe they are protecting the yield. And for the time being, we believe that expecting the year to end up being flattish or slightly awkward 2019, it is a very reasonable expectation. But we might be wrong, and maybe we see more growth coming or but rest assured that we don't see any reason to be concerned about the demand side of the business. So we don't see the general macro conditions or any economic issues really eroding the healthy demand that we have been witnessing over the last month. I hope this helps.
With regard to the other comment you make, which is accounting of the MAG. Well, I didn't say that we should be or we should forget about the accounting? No, I didn't say that. What I said is that we're looking at the court or sorry, the half year results, the commercial revenue, the element of the commercial revenue, which is driven by accounting is not really contributing hugely. So the reason why the 2019 commercial revenues, or sorry, the 2023 commercial revenues are better than the 2019 commercial revenues are a very legitimate underlying improvement in performance. And the accounting element is adding but it is steady marginally. So I wouldn't put too much focus on that now. The accounting going forward is going to continue being sort of a confusing element.
Let me try to describe for you what is going to be the most relevant element of that, that still is not impacting the numbers. The most relevant element of that is going to be that we will be spreading the MAG evenly over the years of a particular contract. So, if you take a look at the duty free contracts, the new contracts for duty free, they are going to commit growing MAG year-on-year for 12 years. So between now and 2036. And we will have to -- unless we are invariable, to the extent that we keep operating under MAG, we will have to account for those MAG evenly every year, every day, every second will have the same MAG revenue despite the fact that some of them will be collected in 2028, in 2030, in 2032. And this is the reason why the accounting could be generating some confusion but we cannot get rid of that. What we will do is to be very transparent about the real element of the commitment of in terms of the -- when the MAG side view. And also, we will be disclosing the underlying trends of the business excluding, the MAG. But the MAG accounting will have a very significant impact going forward. I didn't say the contrary, what I said is that in this particular comparison between the first half of 2023 and the first half of 2019, this is not really adding, you cannot say the revenues are up because they are off the accounting, no, that's not the case, they are massively -- this improvement is almost entirely driven by the business, by the underlying business performance.
Thank you. Our next question comes from Luis Prieto from Kepler. Please go ahead with your question.
Good afternoon, Maurici and team. I had a couple of questions if I may. The first one is in the context of the endorsed 3.5% the factor for '24 that you were commenting on? If it finally materializes, how should we think about future use? Does a situation leave the door open to the elimination of the 1% P-factor cap at any point in time? And the second idea, or the second question is, if you can provide any sort of guidance of where variable rents would be in the agreed duty free contracts to sort of assess the likelihood of them being above MAG at any point in time. Thank you.
Hi, Louise. With regard to the P-index, the good news is that we have confirmed that the so to speak 1% universal cap was not really such a thing. It is just something that won't apply to the extent that your -- let me say the indexes that are set to be making up the calculation, which are well established in the regulation, they said they are not delivering something different. So if you are trying to -- let's say, run a exceptional request on the P-index. So it will be -- probably it will be a bit confusing, because there are a number of legal elements here. But just to try to get to the model, if you're trying to argue that there are exceptional circumstances such and such, you would face the challenge of the 1% cap.
If the indexes that are meant to be looked at when pulling together the calculation or delivering something which is different from one person. We have concluded that you can apply for that particular outcome and CNMC agreed. So the indexes that are meant to be making up the calculation ended up delivering 3.5%. So we went to the CNMC and said, there is nothing in the law preventing us from requesting or asking for 3.5%. And the CNMC said yeah, you're right. So this is good news.
So I hope that will apply forever. That doesn't mean that every year you are going to exceed -- this is not about inflation, this is not about saying well, we are closer to something that is similar to apply in the CPI. No, we are not close to that. What we are close, what we have been able to clarify is that to the extent that the component parts of the P-index are delivering something, you can ask for that something and this is a step ahead, obviously. So good news. And then Ignacio will be answering the other question?
Thank you, Jose. Hello, Louise. Your question on variable rents. Let me start with you a couple of things to try to help you and provide you some part of the information. When the company was putting together all the tender, the decision was made with respect to trying to set a very high level for MAG. The outcome was very successful, as just been explained by Maurici. And we managed to increase the MAG by 16%, if we compare levels of 2023 versus 2024. At the same time, what I would like to say very clearly is that the company also made a decision about not disclosing the variable rents. We've seen is a very sensitive piece of information, given our relationship, our contractor relationship with the duty free providers, what I would like to say this, there's one more thing that of course, the variable rents that where tender were higher than the one that we have in our documents. So the outcome was also successful from our site. Thank you.
Thank you. Our next question comes from the line of Sathish Babu Sivakumar from Citigroup. Please go ahead with your question.
Yes, thank you. I got two questions here. So first one, the commercial revenue, can you like, explain like the price mixes as the volume mix, the 6% growth that you're seeing how much of it's actually a function of just inflation because as you see, recovering long haul traffic coming through, you should have seen at least the volume of transactions should have been -- the growth should have been more than the inflation level. And second is, out of your spend compares, any color on long haul traffic as a short haul passenger spend.
And the second one is around the corporate travel. What is your exposure to corporate traffic? I believe it's mainly the leisure mix here. But just any color on that would be actually really helpful. The reason is actually airlines are pulling back some of their winter schedules, as we speak, especially from the low-cost carriers. So just wanted to understand like, are you actually starting to see that I'm not talking about the summer, I'm talking beyond the summer that winter schedule is being scaled back. So between that as you go into the winter, probably the upside would be more of a corporate traffic coming back rather than the leisure. Thank you.
Okay, I will answer some of it. And Ignacio will take on others. When you ask about the Q and the P of the commercial revenue, frankly, this is a difficult answer to be given over the webcast. So I will suggest that we will try and get to use some is difficult because, frankly, there are a number of factors. This is not about saying what is the quantity element and what is the inflation element is much more complex than that. No, so excuse me, if I don't give you a simple answer saying X percent of the increase is driven by inflation, Y percent of the increase is driven by the higher, or the propensity to consume more. What is absolutely clear is, that's one of the drivers, it is one of the drivers, which are having a much more significant impact without quantifying them are driven by I don't know behaviors.
For instance, the Brexit impact on the propensity of the U.K., visitors to spend because they can benefit from the VAT refund or the wealth, the lack of VAT billing. We also have a very clear example of, let's call it propensity to spend more in all the VIP services. It is unbelievable to what extent people are now queuing to get into a VIP lounge. I don't mean the airline lounges, but our lounges and ready to pay.
So, in my view, significant amount of the improvement is driven by changes that post-COVID or for whatever reasons or post-Brexit are making people to be more and more keen on spending or using our services. Inflation of course, is playing the part but is difficult to quantify, in a very simple way.
With regard to corporate traffic, Ignacio will be answering. I just want to demote, so to speak the importance of corporate traffic for Aena. And I don't mean by that that is not an element of it. But at the end of the day, this is not about mainly business travelers, it's about, let's say leisure traffic, international and domestic but business traffic is very welcome. And as long as it is back in full, we will benefit from that. But this is not the make-or-break kind of situation, as you may see in other airports, if you think of, I don't know, JFK or even Heathrow, or you can say, well, the corporate traffic here is critical. If you take a look at Aena's network, we have 46 airports in Spain, and probably a couple of them could be relatively affected by corporate traffic.
Before handing you over to Ignacio, with regard to airlines pulling capacity, definitely they are pulling capacity with regard to the original plans. The way these went was initially some of them in particular, some of them and you can think, if you can very easily guess, who were very, very aggressive reaching record commitments. And then, now they are pulling, obviously not dramatically still in the app, but pulling some of the capacity, for the resources that I discussed before, we believe, okay. But there's nothing dramatic at the end of the day. The endgame of that is what I said before, we will be there or thereabout the 2019 traffic or slightly over. That is our view of the 2023 picture. So this is summing up all the different trends that you can see over the summer and the winter. But definitely the airlines are now slightly less, particularly the low-cost carriers, slightly less keen on growing dramatically, although they are still adding capacity, are more focused on earnings. And the load factors are record, no, in our network. No, I think from memory, we are reaching levels of 95% load factors and that on average. So this is quite something.
Thank you. Could I just follow up actually on the commercial revenue spend? Like what is the difference you see between say a long-haul passenger versus a short haul passenger?
Sorry, you're right. You made that question as well. Normally, overall, the long haul -- some long haul, some nationalities are more prepared to spend at least to spend large amounts of money. And nobody ignores that the Asian traffic is particularly important for that, the Russian traffic was important for that before the war obviously. And it is absolutely fair to say that the Chinese traffic in Spain hasn't come back yet. But once again, unfortunately, maybe. Well, unfortunately, the weight of the Chinese traffic in our network is relatively small. Hopefully, in a number of years, we will get significantly more Chinese visitors or Indian visitors or people coming from that part of the world. But for the time being, they are not really moving the dial dramatically. But when they come back, the commercial revenue per passenger will benefit from this coming back. Of course, absolutely. Nationalities are the main driver, sometimes more than the reasons for the travel that of the revenue per passenger. It is what it is.
Yes, thank you.
Yes, Sathish. A quick comment on your question after Jose's explanation on the business travel or corporate travel. I think one of the main reasons for the recovery of Aena faster recovery than our peers has been that structurally. We have around 75% of our passengers are basically BFR or leisure. This is based on basically Q&A, statistics -- internal statistics of the company based on samples. I would like to say is that business travelers in Aena, we're not much higher, have always been below 20%. At this moment in time, the recovery, the level will be around mid-teens. So we are still a bit below that kind of passengers, if we compare 19 with 2022. Those are the latest data that we have. So it's coming back. And we come back as soon as Madrid-Barajas and Barcelona are also back. Because if you look at the recovery of [indiscernible], is still a bit behind. And that's what we are seeing the lower recovery in terms of business passengers.
I believe that the second part of your question was relating business traveler and low costs and legacy carriers. At this moment in time, we are seeing that there is an equal split for respect to carrying that kind of passengers between that type of airlines. Of course, all this info is based on samples, lab samples carried by the company, but it is information that we have at this moment in time, Satish.
Thank you. Our next question comes from the line of Manish Beria from Societe Generale. Please go ahead with your question.
So, yes. Thanks for the opportunity. I have two questions. The first is on your commercial spending per pack guidance in 2026. I mean, you had this guidance of €5.38. So I see I'm in commercial plus real estate in 2019 per pack was [€4.8] [ph]. And the duty free that you have already awarded. I mean, if you do that, I mean, it adds time plus food and beverages that you have done are probably at like €0.6. So you're already reaching there, just to be the duty free and some food and beverage contract. So I'm just wondering, the command that you have made the behavior changing, Brexit is helping, so why not? I mean, your guidance will be significantly exceeded I mean, so what is the realistic target that you can look at this point in time? This is my first question.
The second is also you mentioned that in DORA III, the CapEx spending will be very important for the investment thesis of Aena. So just with the political ramification, I mean, because Barcelona is one where we need more CapEx, also with the political events happening, or do you think we'll get go ahead or green signal for the Barcelona CapEx to happen there?
This is Maurici Lucena. I will answer your second question. Well, we as a company, I think that we were and we are very transparent, we simultaneously -- actually it was four years ago, but, then we went through these COVID crisis. So, if you leave aside the crisis and all of the perturbations introduced in the technical proposals for Aena. Let's say that, we after the worst effects of the COVID crisis, which simultaneously proposed the expansion, the enlargement of Madrid and Barcelona were both that they are the most important airports for Aena, the largest ones, the most profitable and so on. So I think we were very careful when we simultaneously proposed the enlargement of both facilities.
And the reality is that the enlargement of Madrid was unanimously accepted and Barcelona was not because the Catalan Government, it is true that it had and it has an environmental complexity, that is why we needed it as [indiscernible] condition, the approval of the Catalan Government, because of the environmental issue. And the Catalan Government finally did not accept the expansion. They opposed the expansion of the Barcelona airport. And we are very cautiously optimistic in the sense that, I think and we think that the expansion of the Barcelona airport is so important.
I would say it's a capital issue. It's a fundamental issue concerning the future competitiveness of the Catalan and the Spanish economy, but also for the mobility of the Catalan citizens. So I think that these very strong factors, these very strong arguments, could in the future, make the Catalan Government accept and support the project. It's not the case at present. But as a final comment, let me say that in the coming weeks, maybe after the August vacation, there will be an institutional, let's say, table and institutional discussion between the Catalan Government and the Spanish government, which comes from our budgetary agreement between the Socialist Party and ERC, which is the party that now -- who's -- in other words, the president, the Catalan president, the president of the Catalonia, belongs to this party, ERC. There's, again, an agreement between these two parties, whereby they commit to discuss, technically, again, the potential enlargement of the Barcelona airport. I think that Aena, of course, will support the project, the Spanish government, I can confirm that will support the project. So it's all in the hands of the Catalan Government, who, let's be confident that can change its mind.
Okay. With regard to the commercial revenue per passenger target, you're right. Looking at the current performance, plus the pipeline of improvements that could come up of the recent contract awards, and the 2026 target seems a little bit humble. I fully agree. I think that what we don't want to do is to update you or anyone on the business plan piecemeal. So we are planning to after the summer to, at some point in time to have a session and to update our views on the plan, because, as I mentioned before, there are some other relevant financial objectives that are likely to be reached earlier than expected. So definitely, we have to do that. But in the meantime, we don't want to, let's say, share information piecemeal. But I agree with you, the target seems to be now probably just closing.
Thank you. Our next question comes from line of Marcin Wojtal from Bank of America. Please go ahead with your question.
First one, I wanted to follow up on operating expenses. So you mentioned in your presentation that OpEx is up 12% I think versus 2019, in H1. But going forward, should we expect this cost inflation to accelerate because there are perhaps still some contracts with external suppliers that need to be reset to reflect let's say the new reality or conversely should perhaps cost inflation come down because when we look at inflation, the CPI number in Spain right now it's something like plus 2% year-on-year and it was at some point plus 11. So inflation in Spain has come down significantly, if you could perhaps indicate what would be your expectations for the next 12 months and perhaps not in terms of specific numbers but in terms of the direction of [indiscernible]? Thank you.
Well, you're right the inflation readings are more modest. Now, on the other hand, I have to say in our -- in the industries or the services that are providing us the support, such as security or maintenance or there is somehow some confusion of salary increases and pay raises that probably are still to be deployed by the suppliers in future tenders. We have ahead of us in the coming months, a very important one, the security services tender, which is a huge contract. We need to see how this plays out. We are conducting the process in a way that hopefully we will manage to let's say, match their expectations without going too far. We have engaged in a sort of competitive dialogue, which is a completely new approach for us. So, there are forces playing in both ways.
Let me tell you, I hope and I believe it is realistic to expect these two double-digit -- these double-digit growth rates to be part of the past shortly. But we have to work hard through the tenders to be able to mitigate the trends. This is the reason why all the time I come back rather than committing to say in 2023, this is going to be up by X or Y. I come back to my let's say mantra, which is what we believe is the art of the possible what we believe is achievable, but demanding obviously never easy. Goal is to deliver 55% of EBITDA margin sustainably, under the DORA II conditions. And in DORA III, we will see because as I said before, I hope there will be a number of cards that will be reshuffled, and hopefully that will give us -- that will open a new opportunity to increase the margins, over that level. But in the DORA II, the sum up the endgame, the bottom line of everything I can tell you is 55% EBITDA margin.
Thank you. Our next question comes line of Graham Hunt from Jefferies. Please go ahead with your question.
Maybe just a couple. Firstly, on the Brazilian acquisitions. Can you just talk a little bit about how that fits into that margin target? And maybe just in terms of how we should be thinking about that assume it's captured, but is it accretive or dilutive? And then coming back to the security tender you mentioned, obviously, that you're expecting that by year-end? Are you seeing anything in the process so far that gives you any confidence that you might be able to bring that in a little bit below that headline, contract number? I think you mentioned 1.5 billion. But do you seeing me targeting something a bit lower than that? And then thirdly, very quickly, you mentioned I think you need a grant from the EU around the COVID recovery costs, which led you to not apply for that through almost next year. Can you give any sense on the quantum of that and how you will account for it, if it is awarded? Thank you.
Can you, I didn't quite get your second question. Well, you can make it later on if you wish. But I will try to answer the other two questions in the meantime, if that's okay. With regard to the, yes, the 55% target is the target for Aena, let's say the Spanish network, okay. This has been always the reference when we discussed -- well, when we said that in the past, we enjoyed margins in the region of 62, 63, even 64 percent. What we say no is that Aena will be more likely end up in 55% unless there will be changes in conditions as I said before, probably as a result of the DORA III -- of the new DORA, okay?
When looking at the international ventures, the dilution, normally there is an element of dilution, there is always a trend to see a lower consolidated percentage of margin. But this is a little bit tricky. Why because on one hand, you have, you'd normally run concessions. And when you run concessions, you have two features of a concession that are dilutive. Feature number one, and that doesn't mean they are not very good businesses, they could be fantastic businesses. But feature number one is that when you are not the free holder, you are just the tenant, you have to pay concession fees. So you share part of your earnings. When you take away the concession fee, of course, this is an outflow I admit that you can say, well, so what that makes no difference. But you have to take into account that when growing internationally many times you have to let's say, obviously you have to play the game the way it is, and there are places where you only can obtain concessions, you cannot be by the freehold.
And the second element is that concessions are accounted under rule that is every K12 in which you have to account for all the buildings, all the developments you make as an intangible asset. And that goes through your revenue and your costs is absolutely neutral to your EBITDA. But this obviously, at the time of calculating the margins, they are affected by that, once again, the accounting and accounting impacting things. So I would say it's a bit misleading to say, well, when growing internationally, your margin is lower. Well, nonetheless, finally, there is an element of accounting and there is also an element obviously that you have to share. And if you can grow internationally by buying assets, as a freeholder that will be fantastic, but there are no many opportunities.
With regard to the COVID. Well, this is around 40 some million euros from memory, I might be wrong, but I remember I think is north of €40 million. We applied to the European Union for this grant that this absolutely, let's say, fit for purpose. This is something that we have to do, it's our duty. We have to take care of the airlines. If we can't reduce the cost that the airlines are paying for operating out of our airports, we will do it.
If we have the opportunity and they're completely legitimate rules and regulations to get to obtain an allowance or grant for that, we will do it. At the end of the day, the airlines will benefit from that. And this legitimate, we will end up recovering and pull the costs, but instead of being recovered from the airlines, we will recover from the European authorities or this is good for the airlines and anything that is good for the airlines is good for us. And then your second question was what sorry?
Just on the security tender, what kind of -- if any early indication of the levels you are seeing coming in any positive news you can share?
The positive thing that there are a good number of suppliers or providers that are engaging in the competitive -- let's say what we call competitive dialogue. So they are providing their views, their input, they are willing to be involved and this is very good news. Then the business debates that will be submitted, will come in a number of months, they are not yet used, so it's early days.
Thank you. Our next question comes from Johannes Braun from Stifel Europe. Please go ahead with your question.
I have two. First one would be on Slide 10, where you show the revenue for passengers. I just realized that the aeronautical revenue per passengers, obviously, we had that dilution in Q1. But now in Q2, we have what I think you call a concentration of revenues. Just wondering about the moving parts there. And then, secondly, on Slide 19, you're showing the development of the Brazil operations. Was wondering why EBITDA in Brazil has come down so much in H1. That's my two questions.
Okay. With regard to -- let me take a look at the Slide 10. One thing is to see the revenue per passenger going up different thing is to say that there is dilution or concentration of it all in this semester, in this half year, we are experiencing dilution all the time. So dilution, because the revenue per passenger, I mean, I don't know take a revenue per passenger obviously, is below the revenue per -- the actual revenue per passenger, on average is below the revenue per passenger you are allowed to get. So it's true the Q2 revenue per passenger is higher than the Q1 revenue per passenger, which is good. But that doesn't mean that it is reaching the level of the allowed or approved by the regulator, revenue per passenger. So to the extent that you are still below that level, we are still in the dilution mode. Dilution is something that happens very usually. Well, for a number of reasons, you can imagine there are many, many reasons. For instance, to the extent that the smaller airports are recovering quicker than the largest airports, as the charges are lower, you will tend to get dilution to the extent that you have -- I don't know higher load factors. And as I mentioned before there is a significant increase in load factors, you are likely to be in dilution mode. And dilution means that as you know, well, we will have to recover that in two years time capitalized. But this dilution or concentration is not a big deal to the extent that you can recover it so easily. If you are capped as we have that experience some couple of years ago, or three years ago, that was not nice. But to the extent that you can recover, that is fine. And once again, the revenue per passenger going up that doesn't mean that it's getting to the level where you move to a concentration mode rather than a dilution mode. I hope this helps. And then Ignacio will answer the second question.
Thank you, Jose. And thank you for the question, Johannes. I'm sure you will recall that on the Brazilian assets owned by Aena AMB. There was an impairment a few years ago, because of COVID and impact in construction costs, et cetera. That impairment got reduced in the first half of 2022 and has also got reduced this semester. What is happening is that basically, the reversal of the impairment last year, that is a positive impact in EBITDA, in euros was around 23 million this year has been 6.6. So that's why comparing EBITDA levels with that reversals of the impairments is basically is not like-for-like exercise, if you remove the impact of basic of this effect, EBITDA is growing.
I think we have time for a couple of more questions, because, frankly, we are over running. I'm very sorry. So maybe a couple of questions, or do we have three people in line? Or --
We do indeed sir.
In that case, we will do the three of them. Okay. Thank you.
Perfect. Thank you very much, sir. Our next question comes from the line of Atul Kumar from HSBC. Please go ahead with your question.
I have a couple actually. So first of all, I just want to understand I mean, going back to your comments where you mentioned that airlines have started pulling up the capacity. I mean, what's the reason for that? I mean I understand that recently, I think the Spain has become the second biggest hub between Italy. So I think there is quite aggressive demand, leisure demand, which is, of course dominating the recovery at the moment. So why you think the airlines have started pulling capacity? And then, of course, related to that. I mean, I think most of the low-cost airlines are your customers and the models they follow. I mean, of course, they sort of try to go to the airports where they get better deals or better prices. Now, if you're increasing your airport charges, do you think that could further discourage or that could cause low cost airlines like [indiscernible] and all pull further capacity away from Spain? So that is my first question.
Secondly, on the liquidity side, so basically, you have cash of 1 billion, but then you have a debt, maturing of 2 billion in next year. Looking at all the equation, I mean, how comfortable are you in terms of liquidity? And do you think would you be able to meet your target of net debt to EBITDA of two times. So you still have about 2.9. So these are my two questions, please, if it helps.
Okay. With regard to the first question, maybe pulling capacity is not the right expression. Let me try to make it more clear. Some of the airlines in particular, and you can guess, who they are, were planning to increase capacity in the summer very, very aggressively, following the trend of recent bonds. And now they are scaling that back is not that they are pulling capacity that they already, let's say put in place, they are being held in for growth, but there's much more modest growth. The reasons for that, obviously, are something that we can only guess, okay, we can only guess. You say the Spanish market is very attractive indeed. But just today, you can read in the press in Spain headlines today or yesterday, I don't remember about a couple of airlines relevant airlines here, one of them has increased the ticket prices over the last year by 22%. The other one by more than that. I think from memory more than 30%. So you can put two and two together. And rightly so I have nothing against them, obviously, taking care of their profitability.
In some cases, we know that some airlines operating out of the U.K., for instance, are thinking that they may face difficulties to cover some of the original commitments with Spain, probably with other countries for sure, because they are not going to get the aircraft that they expected. And some days ago, one of these Airlines was very clearly making the point that they are scaling back or delaying or adjusting the schedule of delivery of aircraft. They said that very clearly.
In some cases, we know that some airlines are concerned at some of their origin, airports to be facing over the summer some disruptions and they are concerned that if they try to bite more than they can chew, they can end up in cancellations and obviously cancellation means costs. So there is a whole host and a variety of reasons that frankly, I cannot speak for them. I can only share with you what we are witnessing. Is this that they don't like the Spanish market? They love it. Is this that they don't feel that the demand here is robust? Definitely. Is that they are not going to grow? They are going to grow. But six, three months ago, they were planning to grow even more. So they are just moving their, let's say their chess pieces around to make the most out of this situation and rightly so and they are now probably trying to avoid incurring costs that they can do without focusing on improving the deal. And that doesn't mean that the market is going backwards. This doesn't mean that we don't see the recovery ahead of us, but probably the growth that we have seen over the last month is likely to be more modest over the summer or who knows in the winter. But by no means I am suggesting that they are not willing to serve the Spanish market under demand here. The demand here is amazing. Okay?
With regard to liquidity. Liquidity, we are fine with the maturities as a combination of three things, four things. First of all, liquidity we have, we hold today, the new credit lines, the new RSCF that we just signed and is entirely unused €2 billion. Thirdly, very importantly, our capacity to generate cash flows. Don't forget that we will be generating cash flows over the coming months, in a very, very healthy way.
Finally, I can say that we are very close to be well, I don't mean issuing bonds, but we are very close to be in the market with the debt capital market platform. With a prospective, we are very, very close to do that. That doesn't mean that we are going to issue any not committing at all. But to have one more tool at our disposal. We are literally weeks away from that.
Just following up on the first question, I mean, as I asked that, do you think I mean, if you're increasing airport charges, do you think that could discourage the sounds of few low-cost airlines, some of the key customers? Are you hearing some kind of arguments or some of discussion -- are you having some kind of discussion with the airline, wherein airlines are asking, I mean, about limiting the capacity in case there is an increase in airport charges.
Definitely, the discussions around the airport charges are a staple of our business. And of course, the airlines will always complain about this. But first of all, we are still the most efficient in the leisure market, we are definitely the most attractive operator. And I don't think this 4% increase is going to be a reason to walk away, I don't think so the other way around, take a look at the key low-cost carriers operating in Spain. They are willing to grow, willing to grow. And I think capacity, once again, they are not pulling capacity, they simply are scaling down a bit, their ambitions of three, four months ago. So this is not going backwards. This is going forward, the slower pace that they originally expected.
Finally to let's say, wrap up, how on earth, they can complain about the 4% increase in charges, when their tickets are going up -- the ticket prices are going up by 20%, 30% and 40% in some cases. Simply they are doing their job by complaining. They complain everywhere, obviously, and rightly so. Once again, I'm not critic in that. And secondly, they are trying to take advantage of the current circumstances to restore their profitability because they went through a very difficult time. We have to recognize it. Sorry, we'll have to rush up because we are running out of time, big time. So can we make, the last two questions, Andre and Jose, I believe especially.
Thank you. Our next question comes from the line of Andre Liebenberg from Barclays. Please go with your question.
Can I just ask quickly, I've thought on the MAG accounting, what you said given the new MAGs and how they're going to be flatlined across the life of the MAG. Just to understand that means we're going to have a big accounting discrepancy in the opening years of it from next year and that your reported revenues will be way ahead of actual cash flows is that right? And then, that will taper down. So your reported profitability will be flattered for the opening years of the new MAG contract.
Second question. Madrid and Barcelona have lagged the recovery. Now they started to catch up. Does that mean anything structurally for the profitability of the business? I know originally when you came to market, the Madrid and Barcelona had high margins compared to the system, but I suspect the profitability at [indiscernible] Malaga and Alicante is pretty bloody impressive as well? But is there anything structurally from the catch up that we see now of Madrid and Barcelona for your overall economics and your margin?
Okay. Well with regard to the MAG accounting, you are absolutely right. The MAG accounting will imply that, if you take -- if you think in terms of the duty free contract, you have MAGs that are growing year-on-year for the coming 12 years on accounting wise. Well, let me say to the extent that you are operating under MAG obviously, if the contracts are operating in variable conditions or fee or royalty, that will be different completely different. But to the extent that they are under MAG, they are not exceeding the MAG level, they will be accounted for with the same revenue every second, every minute, every day, every year. So, what we will need to do and we will do is clearly to provide information there will be a discrepancy between the accounting revenue and the cash flow. Definitely, definitely, I know this sounds difficult to understand, but this is the way IFRS 16 is forcing us to account for this rent. There is nothing we can do about it. We have been fighting and discussing and arguing with regulators with auditors no way around. But we will be transparent, we will provide all the information needed on both the underlying revenues, the variable elements of the revenue, the sales, something we didn't do in the past. And on the cash flows.
With regard to, yes, there is an element of profitability in Madrid and Barcelona that will be flowing through the whole business. Yes, definitely, that's true. But all that is contemplated in the 55%, Andre to be perfectly honest. All of that is contemplated in the 55%. I'm not suggesting this will change the objective.
Okay, last question for Jose Immanuel, sorry. This time, I get it right.
It's from José Arroyas from Santander. Please go ahead with your question.
If I may, can you give us an update on the new Brazilian airports? The construction fee has been paid when we will just start operating the 11 airports, if you can update us on that. Second question is on the solar plant. We can even see ourselves that they've had plans under construction in Madrid 120 megawatts, does not accelerate the strategy for the 2030 timeline that still holds. I think that's the latest update you gave us.
And lastly, on the private security contract, priority turned right? You are estimating a 1.5 billion cost over five years but mechanically implies, I'm right 300 million a year. Because if I looked at the revised, cost, I mean the P&L security for running is today €200 million. Am I right to look at these contracting this way that you are already expecting 50% increase in credit security. Thank you.
Okay. I will start with -- I will answer on the Brazilian question and the security question. I'm not sure we'll deal with the solar plant question. We will be taking over the operation in Brazil over the summer, starting with a smaller airport. I think it's overcast and then the largest airport in September. I think Congonhas in September will be in our hands fully operated by us.
In the meantime, there is a sort of shadowing period where we work together with the current operator in [indiscernible]. With regard to the security, no, the answer is no. First of all, because the answer is no, because first of all, this is the starting point and then we will see what the final bits are. And secondly, because this is not like-for-like. The business is introducing an element of new equipment and new features over the coming years that will require a higher cost to operate in. We can't provide this information separately to you and the rest of the analysts. So you can understand what we are talking about. Once again, sorry to be so let's say insistent on that everything will end up in the 55% bottom line margin. But we will make sure to provide you more color about how to compare the existing services, the scope of services and the newer scope of services. And secondly, why it is not the first time I wouldn't be the last when we ended up with the bids below the -- let's say the original tender price.
Thank you, Jose. This is Ignacio speaking. I can in a few words, the updates, sorry, good way that in 2025 will be around 36% of energy being produced by the solar project at Aena. That's very similar to the last information that I think we share with you. And with respect to the 100% late 20s early 30s. So no big deviation. Yes, perhaps more specific in the goal for the 2025. Thank you.
I think we have to come to an end. Thank you very much everyone for joining us today and if we don't speak before that I believe will be the case. Have a good summer break. See you back after the break, after the summer. Thank you.
Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.