CEO: Fraport Greece’s performance better than expected

Fraport AG CEO Stefan Schulte this week referred to a better-than-expected performance by group’s Greek subsidiary so far, in an interview with the economic daily WirtschaftsWoche.

Fraport Greece, a majority of which is controlled by Fraport AG, assumed the management of 14 airports around the country last year, a 40-year concession deemed as the most important privatization in Greece during the crisis years, along with the transfer of the Piraeus Port Authority to Chinese multinational Cosco.

Schulte added that there are important margins for improvement in the airports’ prospects, while challenges for the regional airports in Greece remained great. At the same time, he said Greece was very attractive as an investment destination for his company.

“Greece has enormous possibilities in tourism; the country offers great cultural and natural variety; people are cordial and welcoming. We deeply believe that Greece has a great future before it as one of the most significant tourism markets in the world.”

Conversely, he pointed out management of the 14 airports will not generate short-term profits for the parent company, citing the initial concession outlay and additional costs.

“Over the next few years the Greek state will primarily benefit … For Fraport’s shareholders, such large and long-term investments pay off after 15 years,” he estimated.

A 40-year concession deal was sealed in April 2017 with the deposit of 1.234 billion euros into the state’s coffers by the consortium (FRAPORT AG – SLENTEL Ltd).

Beyond the upfront cash payment, the consortium pays 22.9 million euros annually in leasing, adjusted to inflation, along with an adjustable fee of 28.6 percent of pre-tax profits. According to the privatization fund, the revenues for the Greek state during the 40-year period of the concession are calculated at 10 billion euros.

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