Lima Airport: the jewel in the crown of Fraport?

Airports that have been publicly committed to the progression of additional infrastructure regardless of the existing scenario are a recurring theme in CAPA reports; in some cases, the reasoning for downloading or unloading a strategic advantage, in others, connects to an environmental program.

In the case of Lima Airport Partners, an organization 80% owned through Fraport is neither; only part of the strength of the company and the parent company and its ability to attract foreign monetary organizations to finance it amid what is a war for the entire sector to succeed and thrive.

Resum

Lima Airport Partners signed a US$450 million financing agreement for the extension of the runway at Lima’s Jorge Chavez International Airport (LIM). Four foreign banks, adding KfW IPEX-Bank, Bank of Nova Scotia, Sumitomo Mitsui Banking Corporation (SMBC) and Banco Bilbao Vizcaya Argentaria (representing 4 other continents), lend.

The expansion includes a new 65-meter ATC tower, a new 3480-meter moment runway, 10 kilometers of taxiways, a complex 250-hectare intermediate platform for increased aircraft parking capacity, a new emergency facility, beacons and navigation aids, surveillance systems and other systems.

Construction of the new ATC tower is expected to be completed in July 2021, construction of the runway will begin soon and is expected to enter service until the end of 2022.

The progression of the Lima Airport runway is strategically important, only for the airport, but also for Peru and South America. LIM serves as the most important and popular airport for the South American market.

Dr. Matthias Zieschang, Chief Financial Officer of Fraport AG, said: “This transaction is of paramount importance for the progression of Lima Airport. Secured in a very complicated environment, this investment agreement sends a strong and positive signal about Lima Airport Partners and the entire Fraport Group. In addition, the transaction highlights the strong interest and call of money markets to finance well-managed airports that have a positive and long-term perspective, such as Lima Airport Partners with its main Airport Hub South American.

Dr. Zieschang recently announced that Fraport expects to register positive EBITDA in 3K2020 for its outer segment and an EBITDA of almost one hundred million euros for its outer segment in FY2020, despite the effects of the COVID-19 pandemic.

He said: “Abroad, our aggregate is much smaller than in Frankfurt. This means that prices can be reduced even faster and more strongly in the short term. “

Lima is the most productive example of Fraport’s strengths in its external market. In a recent CAPA report on Fraport’s 1S2020 monetary report, he revealed that, with the exception of Lima’s subsidiary (Lima Airport Partners, in which Fraport now owns 80%), all Fraport’s foreign airport subsidiaries had contributed negatively to monetary performance.

This point of ownership in Lima, which has gone from 70% in 2019, contrasts with Delhi Airport, for example, where it is only 10% and where, in the past, Fraport has expressed frustration at the lack of influence it can bring. focus on the occasions there.

Although on the Pacific coast, LIM is well positioned to serve as a hub between the countries of South America, between those countries and Central and North America, and on the intercontinental East and West.

While 20% of the capacity in providence is international, almost 90% of seats are provided through foreign airlines.

The expansion of passenger traffic has remained stable over the past decade, with a double-digit expansion from 10-10 to 2019, as well as a simultaneous expansion in seating capacity.

During the january 2020 era to August 2020, passenger traffic was reduced by 67%, dramatically a higher position than others, and represents a marginal improvement over the figure of Fraport’s main airport (-68. 4%).

This is largely due to the catastrophic decrease in capacity in March 2020, which it experienced at many other airports.

Capacity fell from 590,000 in the week beginning March 16, 2020 to 147,000 the following week, then remained at a low of just 5,200 in the week beginning April 20, 2020, and then increased to that point until the end of June. there has been a partial recovery, with 109,000 seats scheduled for the week beginning September 21, 2020.

Peru has imposed one of Latin America’s oldest and strictest padlocks to prevent the spread of coronavirus, but has noticed that cases of infection accumulate rapidly.

Peru has now experienced two pandemic peaks, reaching 8800 instances on the last day of May before falling to a low of 2500 on June 22, 2020, before passing past 10,000 for the first time in August 2020.

The progression of infection since then has barely been uniform, with a difference of approximately 5,000 new cases between two days alone in early September, however, the overall trend now turns out to be downward (there is a similar drop in staccato after the first peak).

The leader in the resumption of aviation in Lima is the umbrella of LATAM, which had only about 56,000 seats presented in the week of September 14, 2020, which is more than all other newly active airlines combined, representing 68. 5% of the capacity. despite the lack of bankruptcy through LATAM Airlines Peru, as well as other divisions, in May 2020.

LATAM has 65% off-piste movements and 46% peak moves right now.

Lima’s importance as a hub is evident in this graph, which shows that if precisely 60% of seat capacity is on flights involving ‘top’ and ‘bottom’ South America, Europe and North America remain represented.

Chile holds the largest number of seats, followed by Brazil, then Spain, the United States and the Netherlands.

However, despite all the other references of the Lima hub, the airport does not have a strong representation of air alliances.

SkyTeam has 2. 6% seats and oneworld less than 1%. Star Alliance has no representation.

Unlike Frankfurt, where Star Alliance has 70% capacity and non-aligned capacity is 22%.

However, despite this fact, more than 72. 3% of Lima’s capacity is provided through full-service carriers, while cheap carriers account for 22. 6%.

On the monetary side, Lima Airport has achieved a consistent EBITDA margin of 33% to 34. 4% in the last 3 years (2017-2019), slightly higher than the ME of Frankfurt Airport in the same period.

Foreign operators seem to like this component of the world. In neighboring Ecuador, President Len-n Moreno demonstrated in August 2020 that Korea Airports Corporation would operate there at Manta Airport and invest $182 million in airport infrastructure.

In the case of Lima Airport Partners, an organization 80% owned through Fraport is neither; only part of the parent company’s strength and ability to attract foreign monetary organizations to finance it amid what is a war for the entire sector to succeed and thrive.

Resum

Construction of the new ATC tower is expected to be completed in July 2021, construction of the runway will begin soon and is expected to enter service until the end of 2022.

He said: “Abroad, our aggregate is much smaller than in Frankfurt. This means that prices can be reduced even faster and more strongly in the short term. “

Lima is the most productive example of Fraport’s strengths in its external market: in a recent CAPA report on Fraport’s 1S2020 monetary report, it revealed that, with the exception of Lima’s subsidiary (Lima Airport Partners, in which Fraport now has an 80% stake), all subsidiaries of foreign fraport airports had made negative contributions to the group’s operations.

This point of ownership in Lima, which went from 70% in 2019, contrasts with Delhi Airport, for example, where it is only 10% and where, in the past, Fraport has expressed frustration at the lack of influence it can bring. provoke the occasions there.

Although on the Pacific coast, LIM is well placed to serve as a hub between the countries of South America, between those countries and Central and North America, and on the east and west intercontinental level.

Location of Lima

Source: Google Maps.

While 20% of the capacity in providence is international, almost 90% of seats are provided through foreign airlines.

The expansion of passenger traffic has remained stable over the past decade, with a double-digit expansion from 10-10 to 2019, as well as a simultaneous expansion in seating capacity.

Jorge Chavez Lima International Airport: passenger 2010-2020

Source: CAPA – Aviation Center and Fraport.

During the January 2020 era to August 2020, passenger traffic was reduced by 67%, dramatically a higher position than others and represents a marginal improvement over the figure at Fraport’s main airport (-68. 4%).

This is largely due to the catastrophic decrease in capacity in March 2020, which it experienced at many other airports.

Peru has imposed one of Latin America’s oldest and strictest blockades to prevent the spread of coronavirus, but it has still noticed cases of rapidly accumulating infection.

Virus cases in Peru: COVID-19 case rate

Source: Wikipedia.

Jorge Chavez Lima International Airport: percentage of the airline market through seating capacity, week beginning September 14, 2020