Fraport down by 9.8%, but results are mixed

By Administrator |

The Fraport airports company yesterday reported a 9.8% fall in revenue for its full fiscal year to E.2.1bn ($2.6bn) although EBITDA reached a new record high figure of E.600.7 ($763.5m) – a 3.5% rise compared

to the previous record year of 2007.

The 2008 net profit of E.180.2m ($227.3m) was below the previous year?s figure of E.213.7m ($269.5m).

Fraport Executive Board Chairman Dr. Wilhelm Bender said that the strong downturn in the global economy led to declines in passenger and airfreight traffic at the Group?s Frankfurt Airport (FRA) home-base in 2008. With nearly 53.5m passengers, Frankfurt Airport registered 1.3% fewer passengers than in its record year of 2007, although the airports' company pointed out that its intercontinental passenger segment still reported light growth.

The company also said that at the group level, traffic development for 2008 was more positive elsewhere than in Frankfurt. For example, Peru?s Lima Airport saw passenger traffic jump by 10.4% to 8.3m and airfreight volume climbed by 6.1% to almost 240,000 metric tons. Antalya Airport on the Turkish Riviera also recorded 9.1m passengers, a healthy 8.5% year-on-year increase.

In total, Fraport?s majority-owned airports handled around 78.2m passengers and nearly 2.5m metric tons of cargo (air freight and airmail).

Fraport pointed out that the development of traffic in previous decades shows that crisis-related declines have been followed by over-proportional growth in the succeeding recovery phase. Bender said: ?There is no doubt that globalization and internationalization of the division of labour will intensify further. This is why the world economy needs a high-performance global air transportation industry – that links the growth centres of the world together.?

As a result, Bender said that a temporary drop in traffic figures was 'definitely no reason' to put a hold on FRA?s capacity expansion.

He said the demand from airlines for take-off and landing slots at Frankfurt has remained stable for many years, above and beyond the limited capacity available. ?After a long ten-year planning and approval phase, we are finally constructing the new Runway Northwest – a decisive step for the future,? he said.

Bender stressed that Fraport is not only securing the airport?s future with the new runway – which is expected to go into operation during the 2011/2012 Winter Timetable – but progress has also been made in strengthening, modernizing, and expanding FRA?s existing infrastructure. In 2008, Fraport invested nearly E.500m ($630.7m) on various projects, including provision for docking positions for the Airbus A380 super jumbo.

Bender described Frankfurt Airport?s expansion as one of the largest investment projects in Europe: ?In total we will be investing about E.7bn ($8.8bn) here at FRA between 2007 and 2015. On top of this, billions of euros will be invested by numerous other companies, that want to profit from the dynamic Frankfurt Airport City in the future.?

He said this privately financed programme will have considerable impact on the economic development of Frankfurt/Rhine-Main and far beyond the region. He said it will secure many thousands of jobs and, through catalytic effects, will create approximately 100,000 new employment positions throughout Germany.

Despite all of these positive developments, ?it is difficult to provide an outlook of our expected business development in 2009,? said Bender. Fraport expects Group traffic figures to drop because of the global economic situation.

At FRA, the stabilization of air traffic is expected during the third quarter and by no later than the second quarter of 2010 and Bender sees a sustainable recovery trend taking hold thereafter – led by renewed growth in air traffic figures around the globe. For the Fraport Group, Bender said he is expecting decreases in traffic and revenue in 2009 – which, through strict cost management, will have only an under-proportional impact on EBITDA and Group results.

In conclusion, Bender stated that uncertainty about the economy and air traffic development currently made it impossible to quantify precisely how Fraport?s business results will develop.


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