Fraport AG Sees Share Increase After Airport Charges Agreement

Investing.com — Shares of Fraport (ETR:FRAG) AG (FRA:FRA) closed 4.3% higher today following a favorable four-year airport charges agreement with its airline partners.

The deal, a positive surprise for investors, aligns with Fraport's initial guidance for the first year and extends tariff certainty beyond the previously anticipated one-year timeframe.

Key Details of the Agreement

The agreement, revealed alongside Fraport's third-quarter results, sets an average 4% increase in tariffs over the next four years. Specifically, for 2025, airport charges for Origin & Destination (O&D) passengers will rise by 6.8%, while charges for connecting passengers will increase by 5.0%, averaging out to a 5.7% increase.

Additionally, incentives for long-haul traffic growth and more modest tariff increases for connecting traffic are introduced, potentially encouraging Lufthansa to enhance its hub operations in Frankfurt.

In the following three years, the differentiated growth rates will be maintained, with average increases tapering to 3.9% in 2026, 3.4% in 2027, and 2.7% in 2028. These structured increases aim to support the rebuilding of the hub function at Frankfurt Airport while offering airlines a predictable cost structure.

Barclays (LON:BARC) analyst Andrew Lobbenberg remarked on the agreement, noting, "Whilst there are variances between today's announced deal and our published tariff forecasts, the differences sit within the scope of variance that could come from differing traffic mix or from the impact of the incentives."

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