passenger growth – For Immediate Release | Official News Wire for the Travel Industry

This airport has now become the world’s 12th busiest airport, moving up four places from the 16th spot in 2017. According to the preliminary world airport traffic rankings for 2018 released by the Airports Council International (ACI), it over took mega-hubs like Frankfurt, Dallas Forth Worth, Guangzhou and Istanbul Ataturk airports.

The four airports above the IGI Airport are Amsterdam Schiphol, Paris-Charles de Gaulle, Shanghai Pudong and Hong Kong, managing over 46 lakh passengers more than IGIA. The airport ranked busier than all these might surprise – it’s New Delhi’s Indira Gandhi International Airport (IGIA).

“India became the world’s third-largest aviation market in terms of passenger throughput, behind the US and China, in 2018. India’s move towards a more liberalized aviation market and the nation’s strengthening economic fundamentals have helped it become one of the fastest-growing markets with its traffic growing rapidly in a relatively short time,” read the statement by ACI.

The ACI’s World Airport Traffic Forecasts also predicts the country will represent the third largest aviation market in terms of passenger throughput after the US and China by 2020.

As per the rankings released by the ACI, the GMR-group-run airport has solidified its status as one of the fastest growing airports in the world for passenger traffic. Only Seoul’s Incheon International with 10 percent point growth was close to Delhi in terms of passenger growth. The Incheon International airport has secured the 16th place in 2018.

The ACI report said the IGI airport saw 69 million domestic and international flyers in 2018, which is 10.2 percent points higher than the combined passengers of 2017. Passenger traffic in advanced economies grew 5.2 percent while in emerging economies it rose 10.3 percent in 2017.

ACI World Director General-Angela Gittens said while strong competitive forces continue to drive innovation and improvements in efficiency and service for passengers, airports face the challenges of meeting the continuing global growth in demand for air services.

The ACI, founded in 1991, is the trade association of the world’s airports, currently serving 641 members operating from 1,953 airports across 176 countries.

“It is expected that rising incomes in emerging markets will help propel global traffic to new heights in the coming decades as new aviation hubs begin to overtake the more mature markets of Western Europe and North America,” ACI said.

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Boards propose dividend increase to EUR2 – Outlook remains positive

In the 2018 fiscal year (ending December 31), Fraport AG continued on

its growth path, achieving new records in revenue and earnings.

Supported by strong passenger growth at its Frankfurt Airport home

base and its Group airports worldwide, revenue climbed by 18.5

percent to nearly EUR3.5 billion. After adjusting for revenue related

to capital expenditure for expansion measures at the international

Group companies (based on IFRIC 12), revenue rose 7.8 percent to over

EUR3.1 billion. About two-thirds of this increase can be attributed

to Fraport’s international portfolio – with the airports in Brazil

and Greece, in particular, making a significant contribution.

Fraport AG’s executive board chairman Dr. Stefan Schulte said: “We

are pleased to look back on another very successful year, especially

for our Group airports around the world. Here in Frankfurt, however,

2018 presented challenges due to the constraints in European airspace

and the strong traffic demand. For the medium and long term, we are

very well positioned both at Frankfurt Airport and in our

international business. Moreover, we are laying the foundations for

further long-term growth by implementing our expansion projects.”

Revenue and earnings targets achieved

The operating result (Group EBITDA) climbed markedly by 12.5 percent

to over EUR1.1 billion. The Group result (net profit) rose even

stronger, by 40 percent to EUR505.7 million. This includes earnings

gained from the sale of Fraport’s stake in Hanover Airport, which

contributed EUR75.9 million. However, even without the positive

effects from the Hanover transaction, Fraport already achieved its

revenue and earnings targets. Operating cash flow slightly dipped by

2.0 percent to EUR802.3 million. This was mainly due to changes in

the net current assets related to the reporting date. After adjusting

for these changes, operating cash flow rose by 18.8 percent to

EUR844.9 million. In line with expectations, free cash flow fell

sharply by 98.3 percent, because of more extensive capital

expenditure for Frankfurt Airport and Fraport’s international

business, while remaining in positive territory at EUR6.8 million.

Given the positive business development, the Executive Board and

Supervisory Board will propose to the Annual General Meeting that the

dividend be raised to EUR2.00 per share for the 2018 fiscal year

(2017 fiscal year: EUR1.50 per share).

Passenger traffic rises noticeably at FRA and internationally

Serving some 69.5 million passengers, Frankfurt Airport (FRA)

achieved a new passenger record in 2018 and growth of 7.8 percent

compared to 2017.

CEO Schulte commented: “We are pleased that the airlines have

significantly expanded their flight offerings at Frankfurt Airport

for the second year in a row, thus improving connectivity and

prosperity for businesses far beyond the Frankfurt Rhine-Main Region.

Until the first pier of the new Terminal 3 opens in late 2021, we

will focus on maintaining a high level of service quality at

Frankfurt Airport – while dealing with the constraints affecting the

entire aviation industry. In particular, enhancing the situation at

the security checkpoints will be a top priority for us.”

In response to strong passenger growth, Fraport hired over 3,000 new

staff members at Frankfurt Airport in 2018. Despite the constraints

experienced at some central process points in the terminals during

peak periods – particularly at the security checkpoints – global

satisfaction of passengers with Frankfurt Airport was at 86 percent

in 2018 – thus even posting a slight increase compared to the

previous year (2017: 85 percent). To provide additional space for

security checkpoints, Fraport is investing in an extension to

Terminal 1 for installing seven extra security lanes in the summer of

2019.

Fraport’s international portfolio also posted a significant gain in

passenger traffic during 2018. In Brazil, the two airports of Porto

Alegre and Fortaleza reported a 7.0 percent increase to 14.9 million

passengers in 2018 – Fraport Brasil’s first year of operating these

airports. At the 14 Greek airports, traffic rose by almost 9 percent

to 29.9 million passengers. Antalya Airport in Turkey grew by a

significant 22.5 percent to 32.3 million travelers, a new historic

passenger record.

Outlook: Growth expected to continue

Fraport is forecasting sustained growth at all of the Group airports

in fiscal year 2019. At Frankfurt Airport, passenger volume is

expected to rise between around two and roughly three percent.

Fraport expects consolidated revenue to increase slightly up to

around EUR3.2 billion (adjusted for IFRIC 12). Group EBITDA is

expected to reach a range of around EUR1,160 million and

approximately EUR1,195 million, despite the non-recurring revenue

from the sale of Fraport’s stake in Hanover Airport. The application

of the IFRS 16 accounting standard – which changes the accounting

rules for leases – will not only make a positive contribution to

Group EBITDA, but will also lead to much higher depreciation and

amortization in fiscal year 2019. As a result, Fraport expects Group

EBIT to be in the range of about EUR685 million and around EUR725

million. The company also expects to post a Group result (net profit)

of around EUR420 million and about EUR460 million. The dividend per

share is expected to remain stable at the higher level of EUR2 for

the 2019 fiscal year.

Fraport’s four business segments at a glance

Revenue in the Aviation segment increased by 5.5 percent to slightly

over EUR1 billion. This was due partly to higher revenue from airport

charges resulting from increased passenger traffic at Frankfurt

Airport. At EUR277.8 million, segment EBITDA increased by 11.3

percent year-on-year, while segment EBIT rose 6.5 percent to EUR138.2

million.

Revenue from the Retail & Real Estate segment dropped 2.8 percent

year-on-year to EUR507.2 million. A major reason for this drop was

significantly fewer proceeds from the sale of land (EUR1.9 million in

the 2018 fiscal year versus EUR22.9 million for the same period in

2017). In contrast, parking income (+ EUR8.3 million) and retail

revenue (+ EUR0.8 million) grew. Net retail revenue per passenger

fell 7.4 percent year-on-year to EUR3.12. Segment EBITDA increased by

3.4 percent to EUR390.2 million, while segment EBIT climbed 2.8

percent to EUR302.0 million.

Revenue in the Ground Handling segment rose by 5.0 percent

year-on-year to EUR673.8 million. The strong growth in passenger

traffic resulted, in particular, in stronger revenue from ground

services and higher infrastructure charges. On the other hand,

passenger growth also led to higher personnel expenses at the

FraGround and FraCareS subsidiaries. Accordingly, segment EBITDA

declined by EUR7.0 million to EUR44.4 million. Segment EBIT dropped

considerably by 94 percent, but at EUR0.7 million still remained in

positive territory.

At nearly EUR1.3 billion, the International Activities and Services

segment significantly advanced by 58 percent compared to the previous

year. After adjusting for the EUR359.5 million in revenue related to

IFRIC 12, the segment’s revenue rose by 20.1 percent to EUR931.4

million. This revenue growth received major contributions from the

Group subsidiaries in Fortaleza and Porto Alegre (+ EUR90.9 million),

as well as Fraport Greece (+ EUR53.2 million). Segment EBITDA

increased a noticeable 28.3 percent to EUR416.6 million, while

segment EBIT jumped 40.7 percent to EUR289.6 million.

You can find our 2018 Annual Report and the presentation from the

press conference on our financial statements (as of 10:30 a.m.) on

the Fraport AG website.

MEDIA CONTACT: Fraport AG, Torben Beckmann, Corporate Communications, Media Relations, 60547 Frankfurt, Germany, E-mail: t.beckmann@fraport.de

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