German operator will get all clear to take over 14 Greek airports

As part of sweeping privatisations stipulated under the latest bailout package for Greece, German airport operator Fraport will get the all clear to obtain operating licenses for 14 regional Greek airports.

Fraport, the €2.4bn turnover operator of Frankfurt Airport, and its Greek partner Copelouzos Group will pay $1.36bn (€1.23bn) for 40-year concessions to run airports at top holiday destinations such as Crete, Corfu, Mykonos, Rhodes and Kefalonia, as well as at Thessaloniki, Greece’s second largest city.

The German-Greek consortium was named preferred bidder for the suite of concessions in November last year, but the deal was frozen after the leftist Syriza party won snap elections in January on an anti-austerity programme.

The annual net result of the consolidated company in the first three years would be a negative amount of about €100m accumulated–

Yesterday a Greek government official told Reuters that a decision published in the government gazette confirmed its commitment to proceed with the airports deal on the previously-agreed terms.

This follows the agreement hammered out on 13 July over Greece’s €85bn European bail-out plan.

The airports privatisation will come under a controversial condition of the package that obliges Greece to raise €50bn by privatising state assets.

As their new owner, Fraport-Copelouzos will be responsible for maintaining, operating and upgrading the 14 airports until 2055.

If the deal goes ahead, it would be the first privatisation completed under the government of Prime Minister Alexis Tsipras.

A spokesman for Fraport told Reuters that the government’s decision was "the basis for further negotiations", but that contracts had yet to be signed.

With the deal, Fraport hopes to cash in on the continuing growth of tourism in Greece.

In November Fraport told shareholders that in 2013 the 14 airports served a total of about 19.1 million passengers.

It also quotes the UN World Tourism Organization, whose figures show the number of international tourists visiting Greece grew by 17% in the first half of 2014.

Fraport said the operating company running the Greek airports would be expected to have revenue of more than €180m in 2016, with EBITDA exceeding €90m.

But it cautioned that, due to "interest charges, depreciation of the purchase payment and effects related to concession accounting", the annual net result of the consolidated company in the first three years would be a negative amount of about €100m accumulated.

The airports included in the deal are mainland airports Aktio (PVK), Kavala (KVA) and Thessaloniki (SKG), and island airports Corfu/Kerkyra (CFU), Crete/Chania (CHQ), Kefalonia (EFL), Kos (KGS), Mitilini (MJT), Mykonos (JMK), Rhodes (RHO), Samos (KGS), Santorini (JTR), Skiathos (JSI) and Zakynthos (ZTH).

Photograph: The island of Kos, from an aeroplane circling to land at its airport, which is among those to be privatised (Karelj/Wikimedia Commons)