Fraport reports -5% decline in retail revenue in first nine months

GERMANY. Fraport has reported a -5% year-on-year decrease in retail revenue in the first nine months of 2016.

Within that, shopping revenue fell from €99 million to €92 million (-7.1%). Retail revenue per passenger slipped -3% to €3.38 (from €3.49 the previous year).

Fraport said the retail slowdown reflected a number of factors: decreased passenger numbers at Frankfurt Airport (down -1.2%, with 46.7 million passengers handled), a change in the passenger mix, and a more restrained spending behaviour per passenger on average – partly attributable to currency exchange rate effects.

Gebr. Heinemann is the core duty free concessionaire at Frankfurt Airport.

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Source: Fraport

Four of the five top nationalities for retail spending by value suffered declines, with only South Korea (+5%) up. China slipped -2%, Russia -11%, Japan -13% and Vietnam -9%.

Among the top five nationalities by volume USA was flat, Turkey was down -20%, Germany was +1%, India was -3% and UAE was +3%.

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Source: Sales/revenue data of Gebr. Heinemann by destinations

Retail & Real Estate segment EBITDA slipped by -1.5% to €281.9 million, due to higher operating expenses. With depreciation and amortization almost level, the segment’s EBIT reached €218.5 million (down -2.3%). Overall revenue in the segment was up +4.0% to €370.9 million, driven by higher revenue from sales of land.

The Fraport Group reported adjusted overall revenue of €1.94 billion. EBITDA declined -2% to €677 million.

Fraport Executive Board Chairman Dr. Stefan Schulte commented: “As a globally linked industry, aviation is particularly affected by current geopolitical conflicts and risks. And Fraport is not entirely immune to these developments. Therefore, it is even more important that our group operates a broadly diversified portfolio, which we expect to generate considerable positive effects over the business year as a whole.

“Equally important is the fact that growth trends continue to be intact in the aviation industry. Overall, Fraport has achieved robust performance during the first nine months of 2016, despite challenging market conditions.

“In view of the ongoing slowdown in air travel demand as a result of geopolitical factors – which became manifest particularly during the summer peak months – Fraport is maintaining its outlook for the full year (as updated after the first half of 2016) and is still expecting a slight decline in year-on-year passenger traffic at Frankfurt Airport.”

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Source: Fraport

Fraport’s international portfolio of airports reported mixed results in the first three quarters of 2016. Group airports in Ljubljana (Slovenia), Antalya (Turkey), St. Petersburg (Russia), and Hanover (Germany) recorded declining passenger numbers, largely due to geopolitical framework conditions. The company’s airports in Lima (Peru), Burgas and Varna (both Bulgaria), as well as Xi’an (China) achieved double-digit growth rates in the first three quarters of 2016.

Fraport yesterday (2 November) announced that low-cost carrier Ryanair would launch passenger flights from Frankfurt Airport in 2017 – representing a significant shift in strategy as the company aims to combat declining passenger numbers at the German hub. The airport has traditionally been seen as one of the last of Europe’s major hubs to remain exclusively the preserve of legacy carriers.

Schulte said: “Ryanair’s decision to come to [the airport] underscores the increasing importance of Frankfurt for low-cost traffic.”

Ryanair’s first destinations to be served via Frankfurt will be Alicante, Malaga and Palma de Mallorca in Spain, as well as Faro in Portugal.

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Source: Fraport
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Source: Fraport
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