“Investing in the Future of Greece”
Key points presented by Fraport AG’s Executive Board Chairman, Dr. Stefan Schulte, at the General Assembly of the Greek-German Chamber of Commerce and the 26th ACI Europe General Assembly, Congress & Exhibition in Athens, Greece
Athens – Fraport AG’s Executive Board Chairman, Dr. Stefan Schulte, today spoke to delegates attending the General Assembly of the Greek-German Chamber of Commerce and the 26th ACI Europe General Assembly, Congress & Exhibition in Athens, Greece. At both of these events, Dr. Schulte presented the concession for managing, operating and developing the 14 Greek regional airports and the overall investment being made by Fraport Greece. He elaborated on the reasons for Fraport Greece’s commitment to invest. Dr. Schulte outlined the current situation and deficits (infrastructure and operations) at the 14 regional airports, as well as the planned construction works and operational improvements to be implemented by Fraport Greece. Also, he briefly discussed the showcase example of Lima Airport in Peru – where Fraport has been operating for more than 15 years – as a “success story” for airport concessions worldwide.
Dr. Schulte emphasized that the 14 Greek Regional Airports project is a key infrastructure investment for Greece and, indeed, Europe. He pointed out that well-managed airports worldwide have proven to serve as economic engines for their communities. The infrastructure investment in Greece is meant to act as a catalyst for the growth of the country’s significant tourism industry.
Dr. Schulte called the infrastructure project “an important investment at a challenging time for the Greek economy”. Fraport Greece’s offer includes an upfront payment of 1.234 billion euros and an annual fixed payment of 22.9 million euros, as well as an annual variable fee to the Greek State. Infrastructure investments planned for the 14 Greek regional airports will total up to about 330 million euros by 2020. In addition, he emphasized that Greece’s tourism industry will benefit from the promotion of the airports’ cities and regions as travel destinations in Fraport’s global network, to increase passenger traffic and to extend the tourist season.
Furthermore, Fraport’s executive board chairman said that the growth in tourism will enhance employment in other economic sectors and that Fraport Greece will award mandates and contracts directly in the regions served by the Greek regional airports – thus helping to secure jobs and boost local economies.
He emphasized that development and modernization of the airports’ infrastructure are essential elements of the 14 Regional Airports Project. Dr. Schulte described the infrastructure investment program that will be implemented during the first four years of the concession period. This phase includes expanding, restructuring and refurbishing existing passenger facilities as well as constructing new ones, among other initiatives. He also emphasized that in the short-term Fraport Greece will focus on optimizing processes in the terminals to achieve improvements that are immediately visible to passengers.
Finally, Dr. Schulte explained the process of preparing for the transfer of operations at the airports. Transition experts are taking care of the smooth transfer of operations, whereas technical experts are working on development plans for the 14 Greek Regional Airports. The project team is negotiating with International Financial Institutions and Greek commercial banks to set up the necessary project financing structure.
Overall, the major work streams are progressing according to the project timeline. As a result, Dr. Schulte said he is optimistic that the transfer of operations can begin by the end of 2016.
Dr. Schulte reiterated that Fraport Greece is truly committed to making the 14 Greek Regional Airports a win-win project for Greece and its people, for the tourism industry and overall economy, for tourists from around the world, as well as other users of these 14 gateways. We believe in Greece, we love Greece.
About the Greek Regional Airports Project – A Win-Win Project for Greece:
- The 14 Greek Regional Airports Project is a major private investment. It is considered to be one of the largest concession projects in Greece and presents significant potential benefits to the tourism sector, Greece’s economy as a whole, the people of the regions served by the regional airports, as well as to millions of international tourists visiting beautiful Greece every year.
- In the highly competitive international tourism industry, the 14 regional airports serve as vital gateways for one of the country’s most important sectors. The Greek Regional Airports include 3 mainland gateways (Thessaloniki, Aktion and Kavala) and 11 airports on Greek islands (Chania on Crete, Kerkyra on Corfu, as well as Kefalonia, Kos, Mykonos, Mytilene, Rhodes, Samos, Santorini, Skiathos and Zakynthos). Together, these airports received more than 23 million passengers in 2015 (up 6 percent year-on-year). Around 73 percent of these passengers are international travelers.
- In early 2013, Greece’s state-owned Hellenic Republic Asset Development Fund (HRADF) initiated a transparent, international bidding process for two 40-year concessions to operate, maintain and upgrade seven regional airports under each concession (Cluster A & Cluster B). The Fraport-Copelouzos consortium participated in this tender process which attracted leading international bidders.
- HRADF selected the Fraport-Copelouzos consortium as preferred bidder in November 2014 for the 40-year operating concessions for both Clusters A and B, based on the highest bid of 1.234 billion euros for both clusters.
- Fraport and Copelouzos Group established their joint company Fraport Greece in 2015 to act as the concessionaire for the two concessions.
- On December 14, 2015, Fraport Greece signed contracts with the HRADF and the Greek state for the 40-year concessions for the two clusters. The contracts are based exactly on the same bid submitted by Fraport-Copelouzos and selected by HRADF in November 2014.
- At the time of the project closing full payment of the €1.234 billion euros upfront concession fee will be made by Fraport Greece in tandem with the takeover of operations at the airports. Along with the upfront concession payment, an annual fixed concession fee of 22.9 million euros, plus an annual variable concession fee will be paid.
- The Greek Regional Airports are not being sold. Ownership is retained by the Greek State.
- During the 40-year concession period, Fraport Greece will be responsible for the operation, maintenance and upgrading of the 14 Greek Regional Airports. Under the contract, around 330 million euros will be invested by Fraport Greece in improving the airports during the first years up to 2020. In subsequent years, further investments can be made for maintenance and possible capacity expansions, depending on traffic volumes – totaling more than 1 billion euros in investments (including the 330 million infrastructure investment in the initial phase).