Fraport looks to airports outside Germany for passengers as Frankfurt stagnates

(This story has been refiled to add a link to earnings in paragraph 5)

(Reuters) - Frankfurt airport operator Fraport AG is increasingly relying on airports it manages outside Germany for revenue due to weak passenger numbers at domestic airports, its annual results showed on Tuesday.

Rising costs in Germany were making the country's airports uncompetitive, analysts said.

Passenger numbers at Frankfurt totalled around 61.6 million last year, Fraport said, down from pre-Covid levels of 70.6 million in 2019 when Frankfurt Airport was the fourth largest passenger airport in Europe after London Heathrow, Paris Charles de Gaulle and Amsterdam Schiphol.

Fraport operates 29 other smaller airports around the world and said on Tuesday that passenger traffic growth across its airports overall including in Europe, China and India had far exceeded weak domestic numbers in Germany that weighed on full-year core earnings.

"If no political action is taken, costs imposed by regulators will further increase in 2025, with airlines facing an additional 1.2 billion euro ($1.31 billion) burden," CEO Stefan Schulte said after Fraport  released its results.

The German aviation industry is currently facing several challenges, from worker protests and disruptions to high taxes and fees. These increased costs have prompted airlines - particularly low-cost carriers - to cut services in Germany.

Lufthansa, Fraport's biggest customer at Frankfurt Airport, last year cancelled its Frankfurt-to-Beijing flights as Chinese carriers increased capacity. The German airline issued two profit warnings in 2024 because of rising labour costs and strikes in Germany, and has previously said it is trying to buy up airlines in southern Europe where services are less expensive. 

Lufthansa has also said it hopes to expand into newer regions, including Latin America and Africa.

Domestic traffic within Germany rose by 2% in 2024, still well below pre-pandemic levels, Fraport said.

Fraport said passenger numbers across its European airports rose 4.2% last year whereas the number of people travelling within Asia jumped by 13.3%. Additional flights to and from China played a major role, the company added, recording the highest increase in absolute terms. It also saw rising passenger numbers in India but did not give a specific figure.

($1 = 0.9132 euros)

(Reporting by Amir Orusov; Editing by Richa Naidu and Susan Fenton)