The impact of the global financial and economic crisis on air traffic has now been relegated to the history books according to Frankfurt Airport (FRA). In the reporting month of April 2011, traffic volumes for passengers, cargo (airfreight plus airmail) and MTOWs (Maximum Takeoff Weights) all reached new April records and surpassed the April 2008 figures.
FRAs dramatic 31% year-on-year growth in passenger traffic is, first and foremost, the result of a statistical base effect that takes into account Iceland’s volcanic ash cloud, which brought European aviation to a standstill for almost a week in April 2010.
Eliminating all special events, including political unrest in the MENA region (Middle East and North Africa), the earthquake/Tsunami catastrophe in Japan and the late-occurring Easter travel season, FRA ended up with ‘regular’ growth of 210,000 to 250,000 passengers in April 2011. This represents a passenger gain of about 6% to 7% year-on-year.
A RECORD PERFORMANCE
Commenting on the latest traffic report, Fraport AG Executive Board Chairman Dr. Stefan Schulte said: “Even before the opening of Frankfurt Airport’s new runway in October 2011, we are seeing impressive confirmation of our expectations for noticeable growth in air traffic. We have immediately achieved record performance during this first month of the new summer timetable.”
Schulte further explained that Fraport registered more than 4.6m passengers at its Frankfurt Airport home base – a year ago the figure was only 3.5m. Germany’s leading air transportation hub also handled about 187,000 metric tons of airfreight in April 2011, up approximately 13% year-on-year.
Aircraft movements climbed by 25.4% to some 40,000 takeoffs and landings last month. Accumulated MTOWs reached well over 2.4m metric tons – rising 23.5% year-on-year.
FOREIGN AIRPORTS STRONG
Not only Fraport’s home airport recorded a dynamic growth trend. The group’s majority-owned airports overseas also experienced strong growth in April. Leading the way, Antalya Airport (AYT) served 1.6m passengers and achieved growth of 45.1% in the reporting month.
Part of this increase can be attributed to the situation in the North African tourism market and to this year’s Easter traffic occurring in April rather than March. Peru’s Lima Airport (LIM) followed suit with a 23.6% jump in traffic to 920,000 passengers.
The Bulgarian Black Sea airports of Varna (VAR) and Burgas (BOJ) still operate at a smaller statistical spring base for passenger figures, which can lead to unusual percentage growth values. In the reporting month, BOJ saw traffic surge by almost 200% to 19,500 passengers, while VAR experienced a modest 0.6% increase to 31,600 passengers.
In the first quarter of 2011, the Fraport Group’s revenue increased by 6.8% from E.476.1m ($678.2m) to E.508.6m ($724.5m) compared to the same period of the previous year.
The operating result or EBITDA (earnings before interest, tax, depreciation and amortization) rose from E.115.8m ($164.9m) to E.128.5m ($183m) year-on-year. This corresponds to an increase of 11%. Group profit increased more than six-fold, from E.4m ($5.6m) in the first quarter of 2010 to E.24.2m ($34.4m) in the same period this year.
“The noticeable rise in the group’s passenger figures during the first quarter of 2011 has had a positive impact on the development of Fraport’s key financial figures,” explained Dr. Schulte. “Further improvements resulted from the positive operating performance and the noticeable increase in the financial result.”
The surge in traffic volume caused personnel expenses to expand year-on-year by around 4% to E.232.2m ($330.7m).
2,000 NEW JOBS THIS YEAR
“More passengers and more cargo at Frankfurt Airport – along with our ‘Great to Have You Here!’ quality initiative for increasing service levels – is driving our job statistics and underscores the business dynamics of the aviation industry. This year alone, we plan to add a total of 2,000 new jobs,” stressed Schulte.
Non-staff costs (cost of materials and other operating expenses) went up 6.4% to E.165.2m ($235.3m), primarily due to higher energy costs. Total operating expenses amounted to E.397.4m ($566m), an increase of about E.20m ($28.4m) year-on-year.
Thus, with an increase in revenue of almost E.33m ($47m) the operating result (EBITDA) rose almost E.13m ($18.5m) more, while the financial result significantly improved year-on-year from minus E.42.3m ($60.2m) to minus E.24.6m ($35m), due to the development of the fair value of derivatives and currency translation effects.
STRONG OVERSEAS CONTRIBUTION
This positive interim result also reflects the strong performance of Fraport AG’s international investment airports. This segment contributed more than a third to the overall year-on-year increase in revenue of around E.32m ($45.5m).
Passenger numbers at Fraport AG’s two most important international growth drivers – Lima Airport in Peru and Antalya Airport in Turkey – continue to show a clear upward trend. With 2.8m passengers, Lima registered an increase of 20.9% in the first quarter of 2011, while Antalya served 2.2m passengers – up 14.1%.
Fraport AG’s five majority-owned airports welcomed a total of 16.9m passengers in the first quarter. This corresponds to an average increase of 7.7%. With around 11.8m passengers, Frankfurt Airport itself registered an increase of 3.7%. Fraport AG expects passenger numbers to rise at FRA by 4% to 7% in 2011.
NET RETAIL REVENUE PER PAX: $4.72
Benefiting from positive traffic development, FRA’s ‘Aviation’ and ‘Retail & Real Estate’ segments saw a particularly strong increase in revenue. Compared to the first quarter of 2010, the net retail revenue per passenger increased from E.3.07 to E.3.32 ($4.37 to $4.72) due to the improved range of services and shopping facilities for passengers at FRA.
“We are maintaining our full year 2011 forecast,” confirmed Schulte. Thus, revenue is expected to exceed E.2.3bn ($3.2bn), while the group’s EBITDA is forecast to grow in the range of 10-15%. Because of a high release of provisions in fiscal year 2010, the executive board expects group profit to decline slightly in 2011. Adjusted for this effect, however, the overall result for this year is expected to increase noticeably.