Fraport Looks to Asia for Expansion Plans

It is one of the busiest airports of the world. 700 planes land here every day --- that's a touch-down or lift-off every two minutes. No wonder then that Frankfurt airport – also called Fraport -- is popularly called the 'Gateway of Europe'.

Fraport is Europe's third largest passenger airport. In terms of cargo, it's Europe's largest. Fraport handled as many as 54 million passengers last year alone.

Experts say what makes Fraport a European hub of international travel is that it lies at the heart of Germany, well connected by a high speed train station, and an adjacent Autobahn, making it a perfect intersection of road, rail and air.

Now, as the jumbo Airbus A380 comes into vogue in the airline business, Fraport is expanding its capacity to serve even more people. Frankfurt Airport has finally been given the green light to build another runway, expected to come on stream by 2011. And it will open another terminal, worth 100 million Euros, by the end of 2015.

Growing Potential in Asia

Dr. Wilhelm Bender, the CEO of Fraport AG, the German company that oversees the management of this airport says that Fraport will also continue to pursue airport acquisitions around the world. The largest growth potential, he says, is in Asian countries, particularly its two burgeoning economies, India and China.

“We have a strategy in our external business that we want to go into markets where we see an over proportional growth. And India and China fullfill that criteria. That's the reason why we are investing in the Delhi airport,” says Bender.

Fraport AG holds a 10% share in Delhi International Airport Private Ltd., which took over the operation of Indira Gandhi International last year and just last year, got a 24.5% stake in Xianyang International in China.

Infrastructure in India is a Major Hurdle

But Bender is distressed by the infrastructure problems in India, something that gives China an edge over India. Talking about the biggest airport terminal in Beijing and the new terminal in Shanghai, Bender says that there is available capacity in airports across southern China.

What India needs to do is to act very quickly, on the same lines. It needs to spruce up its infrastructure, build airport capacity, improve its roads and railway systems,” says Bender.

Another major reason for Fraport to be interested in Asia is because Asian routes are far more lucrative than the saturated North Atlantic market, at a time of sky rocketing oil prices. According to estimates by European aircraft manufacturer Airbus, there will be 600 million middle class Chinese consumers with disposable income for European holidays by 2020.