Tuesday, August 18, 2015

The Greek Airports Story

There is a deal which concluded in the past day or two in Greece.....involving fourteen Greek airports.  Most of these were small airports which people wouldn't recognize.....but five were significant airports in Greece.....Thessaloniki, Corfu, Rhodes, Kos and Santorini.

The deal?  FRAPORT (the big Frankfurt Airport Company) will pay roughly twenty-three million Euro a year to the government of Greece.  In exchange.....they will manage these fourteen airports in terms of both passenger and cargo.

Some anti-capitalists will jump into this episode and get all upset that the Germans got some sweetheart deal, and screwed the Greeks yet again.  It is a shocker.....the FRAPORT crew actually bid on the deal and they were willing to pay more than anyone else.  It's money guaranteed to the Greek government for the life of the contract.

How does FRAPORT profit?  When you examine their business plan with various airports around the world.....they hire competent people who know how to build up an airport as a business mechanism.  It's not an accidental Micky-Mouse operation where profits are marginal and corruption a daily affair.   They look at various ways to build up tourism....entice more airlines to use the airport, work up cargo situations where new businesses want to utilize the airport for their structure.

FRAPORT makes profits.....you can see that from their yearly reports.  They aren't a failing business operation.

As for the Greeks?  I've been through both Corfu and Thessaloniki Airports.  What I'll generally say is that they remind me of Central American airports.....with a unplanned theme and no real vision about the airport growing or being inviting.  Corfu has the rusted metal siding and marginal air conditioning system.  Thessaloniki had a new presentation on the arrival side and actually looked fairly modern until you got to the second floor and the security area (dark and looking like something out of the 1970s).

Greeks may accept that type of atmosphere, but the majority of travelers who spend money to come to Greece....are European and kinda expect something more in the airport.

I see the deal as a win-win situation.  Some Greeks may be upset that they aren't in control of these airports....but frankly, airports of today....are strictly business operations and not some 'favored-son-operation' that existed forty years ago when they put up a big statue at the front of the airport to honor so-and-so for their fifty years of political contributions.  If they wanted the airport to be just a charity operation.....they should have said that from day one on and just kept pumping money into a failed operation.  

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