Business Model
Fraport Group (hereinafter also referred to as: Fraport) is one of the world's leading companies in the airport business and is active on four continents with its international investments. As an airport operator, Fraport provides all operational and administrative services for airport and terminal operations. It also provides planning and consulting services, IT services, and facility management. In line with the mission statement “Gute Reise! We make it happen”, customers are the focus of all company services. This applies both at the home site in Frankfurt and at the international Group sites. Fraport considers itself to be a learning organization that uses its know-how in a targeted and profitable way worldwide.
The main site is Frankfurt Airport, one of the most important passenger and cargo airports in the world. Owner of Frankfurt Airport is Fraport AG Airport Services Worldwide (abbreviated: Fraport AG), the parent company of the Fraport Group. Other key sites include 14 airports in Greece, Lima Airport in Peru, and two airports in Brazil – Porto Alegre and Fortaleza – (see also “Key sites” chapter).
The Fraport Group generates the majority of its revenue and earnings from the passenger and freight business. In this context, Fraport distinguishes between different services in the following four segments:
- Aviation – holistic management of the terminal facilities and passenger processes at Frankfurt Airport.
- Retail & Real Estate – development and leasing of space at the airport and in the area near the airport in Frankfurt. This primarily includes the retail sector, building and space leasing as well as parking management.
- Ground Handling – all ground handling services such as loading, baggage and passenger services, and also the operation of the central infrastructure and baggage transfer system at Frankfurt Airport.
- International Activities & Services – international marketing of the Group's expertise and airport operations as well as bundling central services in Frankfurt.
Fraport's business model creates value by participating in the international demand for air travel and flows of goods. Through its existing investments, Fraport is pursuing a clear growth strategy that also takes into consideration environmental and social concerns (see also the “Strategy” chapter). In addition to the strategically well-positioned portfolio of airport investments, which focuses on both business travel demand and local tourism offerings, the employees form the basis of the company's success. Together with its partners, Fraport is consistently developing the Group sites and achieving a broad revenue and earnings base.
External influences
The main external factors influencing the business model of Fraport include disruptive events, such as extreme weather conditions or pandemics, in addition to economic, (socio-)political, and regulatory factors. These influencing factors can both positively and negatively affect passenger and freight demand as well as the range of aircraft movements and passenger capacity at the Group’s airports. At the same time, they can influence the purchasing behavior of passengers and thus the economic situation of the Fraport Group as a whole (see also the “Risk and Opportunities Report” chapter).
Economic growth and globalization generally favor the demand for air travel and freight transport. At the same time, economic prosperity and a globally growing middle class tend to lead to a higher number of air journeys. Rising inflation rates worldwide, on the other hand, potentially reduce disposable income and can have an impact on business development. International exchange rates also affect the appeal of tourist destinations, travel and freight flows, and passengers’ booking behavior as well as their buying behavior in the retail area. Exchange rates also play an important role in the financial contribution of individual foreign Group companies, as functional currencies are converted into the currency of the Group, the euro.
Price fluctuations on the commodity markets, especially for crude oil and therefore jet fuel, also have an influence on air traffic and can have both a positive and negative impact on air traffic demand.
Politics affect air traffic at the regional, national, and international levels. Restrictions on operations, such as bans on night flights and anti-noise measures, as well as travel restrictions can have a negative impact on airline offerings, and thus affect passenger numbers and cargo volume at the concerned sites and favor the development of other airports. Environmental policy in particular can affect air traffic. A further political influencing factor is the possible liberalization of air traffic rights. This may result in the opening of new markets for air traffic or the expansion of already existing markets. By contrast, sanctions or tightly specified air traffic agreements lead to the closure of markets.
Geopolitical crises are leading to increasing global political and economic instability. They can influence air traffic development in many ways.
Fraport monitors various early warning indicators to identify trends in travel or freight flows at an early stage, and to derive appropriate countermeasures if necessary.