Fraport AG Frankfurt Airport Services Worldwide, commonly known as Fraport, plans to exit Delhi International Airport Ltd (DIAL) by next May, both as an operator and investor.
Fraport is also closing its business development office in India, saying it was due to lack of opportunities in the airport sector. “We expected opportunities to come up but that did not happen and, hence, it does not justify running an office in India. We still look to India as an interesting market but we are disappointed,’’ said Ansgar Sickert, the managing director of Fraport India.
Fraport manages the Frankfurt airport in Germany and is a joint venture partner with Malaysian Airports in the GMR group-run Delhi airport. It has invested for a 10 per cent stake in DIAL. Apart from the equity investment, Fraport also has a mandate to operate the Delhi airport. That role, too, ends next May and Fraport does not plan to hold its stake and carry on in an operator’s role.
“Under the operations maintenance and development agreement between the Delhi airport JV partners our role was to bring in expertise and transfer it to the local partner. It was never envisaged that the operations agreement would be long-term in nature. There was no plan to extend it beyond seven years,’’ said Sickert.
Adding: “We are in discussion with Airports Authority of India and other authorities regarding the sale of stake in DIAL. Once our role as the airport operator ends next May, we would just remain as minority shareholders, with a limited influence.’’ Hence, the decision to pull out, he said, for Fraport did not look at stakes in projects merely as a financial investment.
DIAL did not respond to an email query. Sickert refused to disclose the share valuation of Fraport’s 10 per cent stake. According to a media report, Fraport had invested Rs 240 crore in the project.
Another reason for Fraport’s decision to pull out of the Delhi airport could be the latter’s poor financial performance. “From a purely financial perspective, Fraport’s investment in DIAL has been a failure. The company has not given a dividend of one rupee and has made a cumulative loss of Rs 1,600 crore. Its net worth, too, has eroded,’’ an aviation source said.