Fraport stock rises following new airport charges deal

Investing.com -- Shares of Fraport (ETR:FRAG ) AG (FRA:FRA) closed 4.3% higher today after the company announced a favorable four-year airport charges agreement with its airline partners.

The deal, which came as a positive surprise to investors, aligns with Fraport's initial guidance for the first year and extends tariff certainty beyond the previously anticipated one-year timeframe.

The agreement, unveiled alongside Fraport's third-quarter results, establishes an average 4% increase in tariffs over the next four years. For 2025, airport charges for Origin & Destination (O&D) passengers are set to rise by 6.8%, with charges for connecting passengers increasing by 5.0%, averaging out to a 5.7% increase.

The deal also introduces incentives for long-haul traffic growth and more modest tariff increases for connecting traffic, potentially encouraging Lufthansa to enhance its hub operations in Frankfurt.

In the subsequent three years, the differentiated growth rates are maintained, with the average increase tapering to 3.9% in 2026, 3.4% in 2027, and 2.7% in 2028.

These structured increases are designed to support the rebuilding of the hub function at Frankfurt Airport while providing airlines with a predictable cost structure.

Barclays (LON:BARC ) analyst Andrew Lobbenberg commented on the agreement, stating, "Whilst there are variances between today's announced deal and our published tariff forecasts, the differences sit within the scope of variance that could come from differing traffic mix or from the impact of the incentives."

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Source: Investing.com