Airport charges: Fraport and airlines sign agreement

"In view of the enormous capital investments to be realized by Fraport in the coming years and the currently difficult economic situation faced particularly by the airlines, we have reached a result that provides the planning security we require," explained Fraport executive board chairman Dr. Stefan Schulte. At the same time, it is the declared goal of the contract partners also to reach agreement quickly on the series of fee increases for the years up to and including 2015.

The agreement signed covers the years 2010 and 2011. Specifically, it stipulates that charges will increase by four percent on July 1, 2010, and by three percent on October 1. Effective April 1, 2011, charges will again be raised by 3 percent and six months later, on October 1, 2011, by 2.5 percent. Thus airport charges will go up by a total of 12.5 percent over the coming two years.

This new charges regulation will only become effective if the aviation partners reach consensus by February 19, 2010, on the development of airport charges between 2012 and 2015, based on different traffic scenarios. If no consensus is reached, the partners may cancel the agreement. This would result in a one-time rise in airport charges of 8.4 percent effective April 1, 2010.

Schulte announced that Fraport will immediately hold further talks with the airlines. "We will hold these talks in a constructive and target-oriented way with the intention of reaching consensus on a regulation for the development of airport charges between 2012 and 2015, based on different traffic scenarios and thus achieve medium-term planning security," explained Fraport's CEO.

Schulte emphasized the need for raising charges. "The increase in airport charges is an essential element for financing the immense capital expenditures for FRA's future viability and competitiveness. By staggering the increase well into 2010, we have also taken into account the currently difficult economic situation faced by the airlines - provided we can agree on the subsequent years and the phased increase becomes effective", stated Schulte.

Fraport is currently investing about €1 billion annually in the modernization and expansion of its airside facilities - including the Frankfurt Airport Expansion Program. "The additional capacities thus created will ultimately benefit the airlines and their customers as much as they strengthen the competitiveness of Germany as an aviation base. However, it is important to note that each billion euro Fraport is spending requires about €100 million in additional expenditures per year for interest and depreciation. These expenditures must first be earned: through the expected traffic growth, through additional airport charges, and through increasing proceeds from retailing," Schulte concluded.