Germans snap up Greek airports

The sale of 14 Greek airports has finally been agreed in the latest step of the privatisation programme mandated by the European Union and the IMF following their €240bn ($298bn) bailout.

No doubt to the chagrin of the Greeks who blame Germany for six years of recession and enforced austerity, the tender was won by Frankfurt-based airport operator Fraport in partnership with Copelouzos.

The consortium, in which Fraport is the dominant partner, will pay €1.2bn ($1.5bn) for three mainland and 11 island airports that together serve about 19 million passengers per year.

In contrast, last year Manchester Airports paid roughly €1.8bn ($2.2bn) to buy London Stansted, which processes slightly fewer passengers per annum.

The deal is also advantageous for Fraport because of Greece’s burgeoning tourism sector, the country’s biggest generator of foreign exchange and a key foundation of Greece’s expected return to growth this year.

In 2014 tourist arrivals are expected to beat last year’s record of 18 million, while visitors are forecast to spend €13.5bn, a figure that could rise to €18bn by 2024, according to a report by McKinsey.

Also benefiting from this growth has been Aegean Airlines, which recently announced a €300m investment in seven new A320s and the addition of 14 new routes, ranging from Helsinki to Tehran, next summer.

Tourism’s obvious potential in Greece will probably raise questions about whether the privatisation – which doesn’t encompass Athens airport but does include Thessaloniki, Greece’s second city – has short-changed Greek taxpayers.

The government was undoubtedly under pressure to sell, having fallen woefully behind on a privatisation schedule that promised €22bn of sales by 2013, but only delivered €5bn.

At least Greeks and foreign passengers should benefit from better facilities, as Fraport has promised to invest €300m across the airports in the next four years – money that the state certainly doesn’t have.

November 30, 2014