Fraport has announced that it is quitting its 16-year investment at Xi'an Airport in China, selling to a local company.
According to a report by the Centre of Aviation (CAPA), the decision comes only weeks after it walked away from an investment in Russia's St Petersburg Pulkovo Airport operator.
The German transport company — which operates Frankfurt Airport and holds interests in the operation of several other airports around the world — noted the "lack of other investment opportunities" in China.
CAPA noted that in some ways, it is not a surprise that on the last day of March, Fraport announced its plans to sell its 24.5% stake in Xi'an Xianyang International Airport to Chang'An Huitong Corporation Ltd for CNY1.11 billion (US$174.44 million).
"Fraport voiced concern about the lack of other investment opportunities in China," CAPA said. "However, the reasons given in this instance are more concrete."
Finalise sale by Q2 2022
"We reflect on our activity in Xi'an with great satisfaction, but also some disappointment," said, Stefan Schulte, Fraport CEO.
"Over the past 14 years, Fraport successfully developed Xi'an from a medium-sized regional airport with about 10 million passengers annually to one of China's largest aviation gateways, serving more than 40 million passengers per year."
"On the other hand, we always regarded our minority stake in Xi'an as a starting point for expanding our business in China ... However, this never materialised in Xian or at any other Chinese airport. Consequently, we have now decided to cease our activities in the Chinese market," the Fraport CEO further said.
Fraport expects to finalise and conclude the stake sale transaction in Q2 of 2022.
CAPA noted that the Xi'an Airport itself has been well developed by Fraport, becoming China's seventh busiest in 2019, and most economic indicators are positive despite a COVID surge.
"It is likely that a macro-economic/political decision also played a part in Fraport's calculations," it added, noting that it may be the last foreign investment into the Chinese airport sector for some time.
