Frankfurt Airport: Fraport wants to learn from mistakes

At the beginning, Stefan Schulte says something that CEOs don't really like to say. "That was a sentence with X." With these words, the CEO of Fraport on Tuesday characterized what his company had achieved "operationally and qualitatively" in the past year in the handling of travel volumes, "that is definitely not our claim". The convoluted apology to air travelers, who often had to cope with long waiting times, delays, but also cancellations at Frankfurt Airport last year, is also good news for Fraport. After a difficult first quarter of 2022, the company's business gradually improved from April onwards, so that the airport operator is now on the upswing again after the pandemic years.

Daniel Schleidt

Coordinator of the business editorial department in the Rhein-Main-Zeitung.

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This can also be proven by the figures that Schulte and his CFO Matthias Zieschang will present on Tuesday. Accordingly, the end of the corona pandemic and the expiring travel restrictions have given the Frankfurt-based company a better year than expected, the consolidated result improved by 81.5 percent and was bottom line at 166.6 million euros. The main driver was people's desire to travel more again. The number of passengers at the airport almost doubled last year to 48.9 million, which is still a minus of 30.7 percent compared to the last year before the outbreak of the pandemic.

"I'm not worried about the future"

What is quite surprising is that the Group is growing disproportionately strongly outside its headquarters in Frankfurt, and more than half of last year's growth was attributable to Fraport's investments in other countries – even though Fraport had to write off its Russian business completely last year. When looking at these figures, airports in tourist destinations stand out in particular, especially in Greece, where Fraport reached a new all-time high of more than 2022 million passengers at 14 regional airports in 30. In total, Fraport is involved in 29 airports, including Peru, Brazil and Slovenia.

The reasons why things are going better abroad than at home also have to do with the general conditions at Frankfurt location. For example, when it comes to "point-to-point airlines", which are popularly referred to as low-cost airlines, Germany is lagging behind other European countries, which, according to Schulte, "are now avoiding Germany". Why? Because in this country the requirements and thus the costs are higher. In many neighboring countries, airport operators have even exceeded the level of low-cost lines before the beginning of the pandemic, in Germany, on the other hand, less than two-thirds of the pre-corona level has recently been reached.

However, Schulte does not want this criticism to be understood as pandering to the low-cost airlines and refers to forecasts by Federal Transport Minister Volker Wissing (FDP), according to which air traffic in Germany will increase disproportionately by up to 2050 percent by 65. Flying will therefore remain necessary and is wanted by the people. "I'm not worried about the future," says Schulte, because there is no need for a separate low-cost strategy, the industry is "welcome here like any other".

Further growth forecast

Last year, Fraport also had difficulties coping with the growing desire to travel because, according to Schulte, there was sometimes a lack of manpower to carry out all the services necessary for boarding flights at the airport. Since Corona and the resulting job cuts in the re-employment of skilled workers, Fraport has suffered from the fact that competition on the labor market in Germany has increased, says Schulte. At the airport, a driver's license is required in many places, especially for driving on the apron, "that remains a bottleneck," says the CEO. In other countries, it is easier to recruit staff quickly. They are working hard to build up sufficient resources for this year's travel season. "The clear goal is stable operation that is robustly positioned even for special situations," says Schulte.

The airspace that airlines have to cross from Frankfurt is also currently a challenge for the Group. For example, the freedom of airspace in Eastern Europe is restricted by the war in Ukraine.

Despite these difficulties and uncertainties, Schulte is optimistic about the future and expects further growth, both in the balance sheet and in the number of passengers. In the summer, Fraport expects 15 to 25 percent more passengers than in the previous year, which is mainly due to growing interest in intercontinental flights, for example to the Caribbean or North America.

By the summer, the number of maximum flight movements per hour is expected to rise again to 104. On the other hand, the guideline for the upcoming Easter holidays is only 94 in order to ensure quality in handling, catering, cleanliness and safety. Schulte refers to the opinion of experts, according to which the number of passengers at an airport should not grow more than ten percent per year, "last year we were significantly higher".

For long-term growth, the company continues to build the new Terminal 3, of which there is good news: It is on schedule and should go into operation on time in 2026. That's what the CEO likes to say.