Antalya, St Petersburg airports’ co-owner hit by Russia crisis

FRANKFURT-Reuters

DHA Photo

German airport operator Fraport is suffering from the crisis in Ukraine and Russia, with ruble weakness hitting passenger numbers and retail spending, and St Petersburg airport, in which it owns a stake, in financial difficulties.

Fraport, which operates Europe’s third-largest airport at Frankfurt, said on March 19 net retail spending per passenger dropped 4.7 percent to 3.43 euros ($4) in 2014.

Russians are among the biggest spending travelers who pass through Frankfurt, accounting for just 2 percent of traffic but spending four times the average, it said in a presentation to analysts.

The retail and real estate unit is one of Fraport’s most profitable, accounting for 45 percent of the group’s 2014 operating profit of 790 million euros, and it had initially expected retail spending to increase in 2014.

“The devaluation of the ruble has made every trip twice as expensive (for Russians),” Fraport Chief Executive Stefan Schulte told journalists, after the group reported full annual results.

At Turkey’s Antalya airport, in which Fraport owns a 50 percent stake, one third of its 28 million passengers in 2014 were Russians.

Germans, accounting for a quarter of passengers at the airport, have helped to compensate for the drop in Russian tourists, with overall passenger numbers up 4.7 percent in 2014, but this summer will be difficult, Schulte said.

Overall tourist arrivals to Turkey from Russia dropped 21 percent last year, according to Turkish government figures, and hotels and tour operators have been slashing prices to try to entice more customers.

Fraport also said the operating company of St Petersburg airport, in which it owns a 35.5 percent stake and which is financing new terminal buildings in euros and dollars, was in negative equity due to the weakness of the Russian ruble.

Fraport is therefore planning to convert a loan it has provided to the operator, Northern Capital Gateway, into equity to restore it to positive equity.

The airport’s share of international passengers is declining as the crisis puts people off travelling to St Petersburg and this means 2015 will also be challenging, Fraport said.

Fraport had pre-released 2014 figures earlier this week, saying it expected core operating profit to rise by up to 6 percent this year.