No Price Cut For Fraport's Greek Airport Deal

Greece will not cut the price of a deal with Germany's Fraport to lease some of its airports, the head of the country's HRADF agency told a newspaper, despite reports that the German firm was seeking better terms.

The government chose the airport management group and its Greek partner, energy firm Copelouzos, last year as the preferred bidder to operate 14 regional airports in tourist destinations.

Fraport has agreed to pay a lump sum of EUR€1.2 billion (USD$1.35 billion) and annual rental fees of about EUR€23 million for the 40-year lease of airports in popular tourist locations, including Corfu and Mykonos. It is also expected to invest a total of EUR€1.4 billion over the period.

"We are not discussing any reduction in the price," the head of privatisation agency HRADF, Stergios Pitsiorlas, told Efimerida Ton Syntakton newspaper, adding that the deal with Fraport "will be signed as it is".

Senior Fraport executives visited some of the airport sites last week and the paper quoted unnamed sources as saying the German company was seeking to secure a lower price for the deal, which would be the first major privatisation completed under the Syriza government.

Asked about the report, a person familiar with Fraport's thinking said it was "obvious that the deteriorating economic situation in Greece should be reflected in the price".

The Fraport executives also met officials of Greece's civil aviation union, which opposes the sale.

"We explained to them that the deal is not profitable either for the Greek state or for them," Vassilis Alevizopoulos said.

The union opposed the lease because Fraport would have to raise ticket charges and landing and parking fees, making the airports less attractive, Alevizopoulos said.

He added that the union planned to take legal action against the deal with EU competition authorities and Greece's highest administrative court.