Revenue from Fraport AG’s retail & real estate segment fell to €101.7 million/$109.8 million in the first quarter of 2020 year-on-year.
Lower retail and parking revenues were to blame owing to the sharp drop in Frankfurt Airport (FRA) passenger numbers, which sunk 24.9% to 11.1 million.
On the other hand, Group net retail revenue per passenger lifted by 4.3% to €3.6/$3.9 for the period year-on-year.
Travel and contact restrictions that began in earnest in March have pummelled growth across all revenue divisions.
SEVERE GROUP IMPACT
The international operator says the business was heavily impacted by the coronavirus (Covid-19) in the first three months of this year.
Group revenue slid 17.8% to €661.1m in Q1 (the decline was -12.6% when adjusted for revenue linked to capital expenditure according to IFRIC 12 reporting standards).
Group EBITDA fell 35.6% year-on-year to €129.1m Measures to offset revenue slumps due to the sharp drop in March passengers have only been partially successful.
That month, pax volumes plummeted by 62% compared to the same quarter last year and by 90% in the last week of March.
The fallout persisted in April, when passenger declines reached as much as -97% on a week-to-week basis.
Net profit dropped by 21% to €35.7m – the first time since 2001 – with all international airports in the Group’s portfolio aside Lima in Peru returning losses.
Stefan Schulte, Chairman of the Executive Board, Fraport AG commented: “We’re experiencing global aviation’s worst-ever crisis. Despite timely and comprehensive action to reduce costs, the situation is severely impacting our company.
“It isn’t possible at this time to make an accurate forecast for the year as a whole, since we don’t yet know how long the travel restrictions will remain in place or how far the global economy is likely to contract.
“One thing is certain, however: the post-pandemic aviation industry won’t be the same. But we’re getting our airport and company ready to face the challenges.”
The Group says it took early steps to mitigate against rising cost pressures. More than 18,000 of the roughly 22,000 workforce at FRA are on reduced working hours.
Airside and landside operations have been consolidated and passenger handling has been focused in Concourse’s A and B of Terminal 1. No more passenger flights will be processed at Terminal 2 until further notice. The airport adds it has processed next to no passengers in the last six weeks.
Extra loans totalling almost €900m were received during Q1 and as of 31 March, the Group possessed more than €2.2bn in liquid assets and committed credit lines. Since then, it has bolstered its finances by more than €300m.
“We’re continually reassessing whether the steps now being taken to trim costs will be enough to safely pilot our enterprise though this crisis,” added Schulte.
“Our personnel requirements also largely depend on air traffic volumes. Depending on how long the coronavirus crisis lasts or how deeply the global economy slips into recession, and how far the aviation market shrinks before it begins reviving, we too may need to appropriately reduce our expenditures for materials and staff.”
Today (6 May), Fraport AG has published its latest sustainability report and a GRI-compliant report on the entire 2019 fiscal year.
Additionally and despite the challenges, FRA intends to forge ahead with plans to lift passenger capacity with the construction of Terminal 3.
The Group is also studying expansion projects in Greece and Brazil, although in these and other cases the length of construction work will be extended.