Passenger service and required expansion of airport infrastructure main focus – airport is important infrastructure facility and largest local employer in Germany.
FRANKFURT, GΕΡΜΑΝΥ – During Fraport AG‘s 13th Annual General Meeting at the Jahrhunderthalle in Frankfurt-Hochst, CEO Dr. Stefan Schulte reported to the shareholders on the past financial year. In Frankfurt, moderate growth in passenger figures (up 0.9%) and cargo volume (up 1.4%) was achieved.
“Compared with Germany and Europe as a whole, this puts us in a decent position, whereas real growth is currently happening in other regions of the world,” said Schulte. In air transport, nations in the Middle and Far East showed much more momentum last year with 10% and 7% growth in passenger numbers respectively. Thanks to investment in airports such as Lima in Peru, St. Petersburg in Russia, Xi’an in China, Antalya in Turkey and Varna and Burgas in Bulgaria, the Fraport Group participated in the good performance of international growth markets. In order to equip these airports for future growth, Fraport has invested in new terminal buildings in St. Petersburg, Varna und Burgas. The airport in Lima has just been chosen by the renowned consultancy Skytrax as the best airport in South America for the sixth time in a row. For the fourth time, the employees there have been honored as the best airport staff in South America.
The financial performance in 2013 met expectations: Adjusted revenues climbed 3.4% – primarily due to the increase in airport charges, higher retail and property revenues plus higher revenues from international business. The Group’s operating earnings (EBITDA) grew at a somewhat greater rate than revenues at 3.7% thanks to an intensive cost management. By contrast, consolidated earnings fell by 6.3%, as expected. This was due to a particularly high non-recurring income in financial asset management in the previous year. However, cash flow developed satisfactorily, becoming positive again after many years of high investments in airport infrastructure. The Executive and Supervisory Board’s dividend proposal is again €1.25 per share, which would maintain the dividend at a stable level since 2010.
Passenger service remains a priority. The “Great to have you here!” program has long been a recognized hallmark of service quality “Made by Fraport,” said Schulte, who continued: “The success proves us right. 80% of our customers in Frankfurt comment positively on the quality of our airport as well as the friendliness of our staff and are satisfied with the services we offer.” For example, last year Skytrax singled out Frankfurt Airport among all airports worldwide as the one making the greatest progress in terms of passenger comfort. Continuation in this direction is the company’s explicit goal. To do so, Fraport also intends to deploy new technology consistently in order to meet passengers’ requirements for mobile information. A good step in this direction was made recently with the relaunch of the Frankfurt Airport app.
As well as playing host to international passengers, Schulte said the airport also has another role to play – as the most important infrastructure facility and largest local employer in Germany. The increase in traffic is directly linked to an increase in the number of employees at the airport, he said. Germany’s largest air traffic hub offers employment to around 78,000 people at 500 firms and businesses at the airport. Together with the supplier and service providers further up the value chain, the airport secures approximately 116,000 jobs according to a recent study. This makes up 2.9% of all employees in Hesse, said Schulte, explaining the airport’s relevance to the labor market over a broad area. Its importance for the German economy and its international trade relations is also immense. No other airport in Europe has the diversity of routes and destinations that can be reached from Frankfurt. “German jobs depend to a great extent on the exporting industries, and these in turn rely on good connections to the rest of the world. These are concrete competitive advantages that secure our prosperity here in Germany.” This is also why it is important to continue developing the airport infrastructure as required: Firstly, to enable more companies to base their operations at the Airport City site and, secondly, to address the issue of terminal capacity expansion promptly before bottlenecks emerge, Schulte stressed.
In all decisions that Fraport makes, an eye is always kept on the company’s regional responsibility: “Together with our air transport partners, we will continue to embrace all operationally realistic opportunities for active and passive noise protection,” said Schulte, confirming the commitment to the airport’s neighboring communities.
For the current year, Fraport expects passenger growth of 2% to 3% in Frankfurt, while the position as Europe’s largest freight airport shall be maintained. Due to an amended accounting regulation, as of January 1, 2014, the Group is no longer able to include joint ventures proportionally in its consolidated accounting, which for Fraport has a particular impact on the investment in Antalya Airport. From now on, its earnings will be reported in the Group’s financial result, which will lead to a change in the figures reported in the current financial year. Compared to the pro forma figures adjusted retroactively for 2013, Fraport expects an increase in all financial key figures in 2014. Consolidated revenues are expected to rise to up to 2.45 billion euros (pro forma 2013: 2.378 million euros). Group EBITDA is anticipated at somewhere between 780 million euros and 800 million euros (pro forma 2013: 733 million euros), while Group EBIT is expected to rise to up to around 500 million euros (pro forma 2013: 439 million euros). The Group result is not affected by the new accounting standards and is expected to see a slight increase compared to fiscal year 2013. Correspondingly, the dividend proposal is to be at least at the level of the previous year.
Photo caption: Fraport AG CEO Dr. Stefan Schulte.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
