Fraport drops as Turkey attacks seen hurting earnings at Antalya

Bloomberg

Fraport AG, the operator of Frankfurt airport, fell the most in 4 1/2 years after saying terrorist attacks in Turkey will hurt its business there as travellers avoid the country.
Fraport dropped as much as 8.5 percent, the steepest intraday decline since August 2011, and was trading down 8 percent at 51.81 euros as of 1:08 p.m. in Frankfurt last week. The stock has fallen 12 percent this year, valuing the company at 4.79 billion euros ($5.31 billion).
Ankara, Turkey’s capital, has been the site of three car bombings since October, and tourists in Istanbul, its largest city, were the target of a blast in January.
Fraport holds a 50 percent stake in the operator of the airport serving the Mediterranean resort city of Antalya, and Chief Executive Officer Stefan Schulte told journalists that passenger numbers at the Turkish destination will be “clearly down” this year as travel-industry bookings to the country plunge as much as 30 percent.
“The caution about Antalya is a negative,” Damian Brewer, an analyst at RBC, said in a report to clients. “The impact won’t be clear until the peak season in the third quarter.”
Group net income this year will about match or slightly exceed the 297 million euros posted in 2015, with earnings depending on developments in Antalya, Fraport said in a statement Wednesday. The German airport operator has been depending on traffic growth outside its home market to make up for below-average gains in passenger numbers in Frankfurt. Deutsche Lufthansa AG, its biggest customer, has capped its fleet and is developing point-to-point routes that bypass the German financial capital.
Passenger numbers in Frankfurt will grow 1 percent to 3 percent this year following a 2.5 percent gain in 2015, Fraport said. Traffic in Antalya fell 1.6 percent last year, pulled down by a 5.5 percent slide in international travelers that overwhelmed growth in domestic passenger numbers. The decline is likely to be bigger this year, Schulte said.
Frankfurt Airport is a major international airport located in Frankfurt, the fifth-largest city of Germany and one of the world’s leading financial centres. It is operated by Fraport and serves as the main hub for Lufthansa including Lufthansa City Line and Lufthansa Cargo as well as Condor and Aero Logic.
The airport covers an area of 2,000 hectares (4,942 acres) of land and features two passenger terminals with a capacity of approximately 65 million passengers per year, four runways and extensive logistics and maintenance
facilities.