Airports send Mayday message
The two companies that manage Greece’s main airports face a threat to their continued operations due to the absence of any passenger traffic. Athens International Airport (AIA) and Fraport Greece (which manages Greece’s 14 main regional airports) have described their cash drought in letters to the ministries of Finance, Infrastructure and Development as well as the state sell-off fund (TAIPED), requesting that they be granted the necessary space to deal with their liquidity problems.
In its letter, AIA says passenger traffic at the country’s biggest airport “has completely collapsed, while commercial revenues are now zero,” as a result of the introduction of extraordinary restrictions to prevent the spread of Covid-19.
AIA claims that the essential continued operation of the airport combined with an almost complete absence of takings will have a particularly serious impact on “the smooth servicing of the company’s financial obligations and its corporate sustainability.” Consequently AIA warns the ministers it may be unable to meet its upcoming obligations to the state, such as the payment for its rights to the infrastructure based on group results, citing Article 31 in the concession contract referring to external factors such as the epidemic.
For its part, Fraport Greece is asking for the suspension of the payment of 44 million euros concerning the concession’s installment for 2019. The contract provides for an annual fee of 22.9 million euros for leasing and operating the 14 airports, plus a floating payment amounting to 28.6 percent of earnings before interest, tax, depreciation and amortization (EBITDA).
The Fraport-led consortium invokes Article 45 of the contract, referring to unfortunate events, so as to safeguard its liquidity, given that “the state will not lose any revenues, because the payment obligation will continue to apply [but for] a later time.”
Nowadays passenger traffic at the 14 Fraport-managed airports has shrunk by 99 percent. However, the March data of the German group showed a 78 percent drop, which is due to the fact that traffic ground to a halt from mid-March.
The Finance Ministry is expected to respond to the requests in the coming days.
