Fraport AG (FRA.DE) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I am Emma, your Chorus Call operator. Welcome and thank you for joining the conference call of [ Fraport AG ]. [Operator Instructions] May I now hand you over to your host today, Christoph Nanke, SVP, Head of Finance and IR. Please go ahead.

Thank you. Welcome also from my side. I have Stefan Schulte, our CEO; and Matthias Zieschang, our CFO, at the table. They will provide you with the presentation with the details of 2019 and probably even more important these days, more news about the recent developments. So let's start, please. Dr. Schulte?

Yes. Thanks very much. Good afternoon, ladies and gentlemen, also from my side. Looking -- regarding 2019, we had a quite good year with total results and so good progress also on the international participations with all our international airports, but also on the progress on all the extension programs, whether you take Brazil, whether you take Greece or the terminals in Sweden and Frankfurt, so all the big CapEx programs. To start the presentation, I would like to give you more an update on the actual situation because that's probably more important for you to understand, and then we can go a little bit back on 2019, but I will make 2019 quite short. So of course, these days, it's not at most importance. You have seen our traffic figures. On January, February, they are published and yes they are -- they are negative, but it's not a real big amount negative. If I may take you with me on the March figures. From 1st of March up to the 12th of March, we are on minus 35% passenger, we're on minus 8% cargo and we're on minus 15% movements. So you see that the coronavirus really arrived in Europe. Because if I compare those numbers I just gave you, with those numbers, January and February, the coronavirus was really more on the destination in China and later on, end of February, more to Far East destinations. Now it's completely spreaded to Europe. And to be quite honest, the numbers are even worse if I gave you the last week or this -- no, this week, not last week. So the most recent days, we are -- yesterday, the day before, we are on minus 45% on passengers. We stay on minus 8% to 10% on cargo, and we are on minus 30% on movements. What's the reason behind and what's the outlook here? The outlook is very, very difficult to give. We are seeing now the immigration stop from the U.S. We got messages from Argentina, Singapore, Kuwait that they will also stop leisure traffic or traffic in -- at all from Europe. Other airports are closed. So we expect that even with really negative numbers I just gave you, it will be even worse over the next weeks. So the minus 45% from passengers with now the stop on the U.S. could go up to minus 60% over the next weeks, and it's difficult to project whether a minus 60% is really something like a peak or not. So we even don't -- we also don't know it like you don't know it. It depends very much on what's going on not just in the aviation market, but in general, in Europe. There are a lot of discussions these days. It's absolutely clear that payers and convents and whatever are skipped, that's clear, but now the decision in Germany seems to be. And the state already took the decisions that also schools will be shut down for 6 weeks or whatever the period it is. And so it will have more and more impact for sure, so I'm not sure that we will peak on minus 60%, and it's really difficult to give you any guidance on that thing. We can just keep you informed as much as possible, and we'll come back on this a little bit later on because it could even be that for the European countries will stop traffic, which it's unclear. There are some rumors, that's unclear whether something actually is happening, it depends very much how the coronavirus will spread around, will go up, will influence people and how the numbers are getting up. What I just can tell you is that politicians try to do whatever thing is possible to gain time. That at the end, the topic behind to gain time because they need medicaments and they have to protect the -- shall I say the...

Hospitals.

The hospitals and so on to keep the situation under control. That's the reason that they closed down our schools and -- so let's say, to avoid any convent, any meeting and so on, any public -- bigger public meeting to separate people and to follow the processes there on detail. So it's very, very difficult for us. It means we are very much on the cost side now working. We started there already beginning of February with the first negative numbers to cut down, of course, normal administrative costs and then to adjust shift plans and to bring down stuff amounts and to -- in light of the reduced traffic and traffic projections, but to keep always -- and that's important for us, so we have to be as strict as possible on the cost side, but to keep on -- to keep up always also the opportunity if -- like eastern or other periods, traffic is better to keep the operational ability to handle this traffic. I will come back to this a little bit later on, but I wanted to give you first the update -- not actually update, on those numbers. And let's go now a little bit more in detail into the numbers regarding 2019, but just on the high level from my side. Matthias will have more details for you later on. So I'm on Slide 4. I think it's -- you see there that revenues have been up in 2019 by plus 4.5%. EBITDA was up an all-time high, that's really good. Results are down here because last year, we [ sold ] the participation in Hanover, so take this effect out, then also, our net result is up by plus 5%. So 2019 so far was quite fine. In terms of operational cash flow, everything fine as you see on this slide. But also the international business supported very much roughly 50-50, international, Frankfurt, for that. Okay. Let's focus a little bit on business, on the basic. Slide 6 is of course always traffic. You see on this slide, it's the traffic numbers, and most of the airports have been quite okay. It's just Slovenia because in autumn last year, Adria Airways with a market share of 50% went into insolvency. And on the other side, the Bulgarian Airport, so-called the Twin Star, was minus 10% because there, we have seen 3 strong years of growth in between 10% to 15% per year, and there was a market consolidation last year. Also, some shift to Antalya, which we'll cover quite fine with another time, plus 10%. So in principle that story was our key. And you also see here on the February numbers already the positive thing for Fraport is that we are not just depending on Frankfurt, but we also have a broad picture of international airports. So business airports like Frankfurt were, with the coronavirus, more effective, but also leisure traffic airports like Antalya and others were less affected there because leisure is not so much the traffic going down these days and on business and on intercontinental. So coming another time on Slide 7 to the coronavirus. First, it was, of course, very important for us to be prepared with epidemic situations, and we are very experienced in Frankfurt. We have a very close contact with responsible heads, authorities. We have a very professional medical center and doctors here who will give us and our employees the right guidance, which is really important of course, on the one side. On the other side, if you look at the economical impact, the virus started first in China. We saw the cancellations to and from China that was especially beginning of February, end of January. And capacity offered to and from Mainland China is somewhat reduced by around 70%. That's already a lot and spreaded around into further Asia traffic. But all this have been numbers at the end affecting us in total somewhere in the range of 7%, 8% or 9% or 10%. But now with the spreading -- the virus is spreading across Europe and other continents, so North America, it seems to be also now more and more South America affected. People generally travel less, and they fear to travel because even if the air quality in aircraft is in very high level, they fear to be taking in current time for weeks far away from home that at the end the topic. And that's a ban a lot of companies give to their employees that they should travel less or that they should travel not at all. So we see the business trips are canceled on a very, very high amount. So business traveling is coming down very much, trade fairs, conferences, meetings are skipped, sporting events are not taking place as long as there's audience. So that's a little bit the topic here. And Frankfurt's our business and intercontinental traffic at least is very, very much affected and much more affected than pure leisure traffic at least for the time being we have to see. The result of this development is sharp in the ongoing reduction in traffic. I just gave you the numbers. And we don't know what's going on, whether there are further countries, excluding Europeans, could happen. It's difficult to predict up to the point what politicians will decide to keep the virus under control to exclude even further our aviation traffic. Financially, I'm on Slide 8. This is affecting all business units, like real -- expect from real estate like aviation, like retail, like parking, but also ground handling. We try to give you some rough numbers to calculate. In effect, that means one lost passenger in Frankfurt, we would calculate with roughly EUR 10 to EUR 14 of EBITDA, so lost EBITDA per passenger. And we know that this guidance seems a little bit white, but it depends very much. And that's unclear for the time being how much intercontinental traffic, which region, which type of passengers are factored over. That's more on the European side, and it's not just aviation. There, the guidance was EUR 8 to EUR 10 normally, but it's also retail, and it's also ground tending, so affecting the full company at the end. Those measures we took already, of course, including the hiring freeze, the adjustment reductions of shift plans, the cut-off administrative costs I mentioned already, cost-saving measures up to restrict orders to those who are really operational needed, so nothing else, to reduce extra time accounts. We -- and we started already to prepare for the application of the so-called short-term working in Frankfurt. We call it in German [Foreign Language]. So short-term working maybe the right expression where we are freely to say thanks to the German government because they've finally decided on last weekend to ease the hurdle rates and to make it much easier to apply for short-term working. It's, in principle, working that way that if we go probably next week to start with short-term working on all operational stuff and we try also to involve as much as possible the administrative staff. If we ask them to work 30% less, then we have now to complete 30% minus on staff costs, that's right. But we have, Matthias, something like 25% or something like this, 22% less of staff costs, something like this as a ratio. So it's really -- you can't call it attractive, you can call it necessarily because the only alternative would be if you are going on minus 60% of traffic, the only penalty would have been violent people. There's no other chance. So then it's much better to go for such a short-term work, and we are already in discussions there regarding the application with the official units there, with the official governmental bodies. So I think that we will also -- that we will apply for that next week and to start very soon after that. We will start probably with a magnitude of -- for the official application of 30% of the staff. But the instrument is very flexible, so you can -- if the numbers are really going to 50%, 60% or 70%, you can immediately going up the numbers. You just need once the approval. That's the reason for the 30%, but then you can go up immediately. That's no problem. Staying there for a second, you see that we'll come to this a little bit later. You see that we have not given any guidance besides that our numbers will be worse in this year because it's so difficult to do it. What do we see? We see that the business impact on business passengers is much bigger than our leisure passengers. We see that it's affecting European traffic, it's affecting intercon traffic, but also domestic traffic. We see that the numbers from day-to-day are getting worse. So it's very, very difficult to say these days how long it will be. But from today's point of view, I would at least expect a level of minus -- probably minus 60% for the next 3 months. It could be worse, it could be longer. We hope that the summer is getting a little bit better because on leisure and the peak summer is a lot more on leisure traffic. People still go on vacation. So if I could -- if I compare it with an airport, [ these adults ], they are 80% on leisure traffic, they are now on minus 20-something, like this minus 25% where we are on minus 45%. That's probably because we have much more transfer passengers, we have much more intercontinental passengers, and we have much more business passengers. But that means also, in summer, we normally have much more leisure traffic that means the negative numbers in peak summer could be less, but it will still be, from today's point of view, negative. So it's no question. Experts are telling us that we have to be prepared that there could be a second wave in winter. What level ever, nobody knows. So coronavirus could be a topic for this year, but it could also be a topic for this and for next year. I'm sorry, we don't have a crystal ball there. So we can just prepare our sites, ourselves on the side of cash, to be always prepared to have enough cash. We do this, and we'll have enough cash. And to be prepared to cut costs down as much as possible as long as necessary to the absolute operational needed and of course to bring down resources as quick as possible by those instruments I just mentioned. To give you just an idea on calculation, you know that we had last year 70 million passengers. If you would calculate now that we have -- would have minus 20% on a complete year and you would multiply this with EUR 10 to EUR 15 per passenger, then it would be an EBITDA effect of roughly in the size of EUR 150 million to EUR 200 million. If you would go for on a year total, minus 30% and nobody knows, and I will not predict for a minus 30%, but I'm just saying those numbers, then you are somewhere in the range of a negative EBITDA effect of EUR 200 million up to EUR 300 million. Nobody knows. So I don't want to be too much on the negative side. That's the reason we cannot give a guidance today because also, we don't know what's happening on the international side of the participation. We see from today's point of view that the effect on our participation, that's a positive thing, the 50% of our business is not so bad, it's not so negative. Up to now, we still even have positive numbers improved or slightly positive numbers in Brazil. So that's -- everything is fine. If you take the European airports, it's too early to make any calculation because if I take the European airports, most of these are really with peaks in summer in Antalya or also in Greece. So it's too early. And the prebookings are down these days, but that's clear and people are uncertain. They don't know what they should do. And -- but the question is how long this goes ahead, which way it goes ahead and whether people who had booked in on a later base and so to make vacation and so to go on vacation. And so we would expect from today's point of view at least a smaller effect, a smaller negative effect, but probably a negative effect also on the European airports. Staying on Frankfurt for a second, Slide 9. There are 2 other important operational topics. First, security. Yes, we made a lot of progress there. Last year, we had a new building in place. We welcomed first line, so first lanes was new, enhanced security technology. We increased the number of lanes. So that was very positive over the summer. We got back to problems in autumn. But we are now -- and that's the positive message I wanted to give you, we are back on the table on negotiations with the federal state about the reorganization of the security process and also about the rollout of new technology at least for some lanes here in Frankfurt. And we hope that we can present you some good news, let's say, over the next month on that. It's really a topic we're dealing with already for a year. So I hope that we will get ahead now on this top level negotiations we have on the federal government. Second focal point remains CO2. We are convinced that the debate around CO2 will come back to light once the current challenges around corona will be over. So therefore, we continue our progress here. While we reduced our CO2 footprint from peak 6 years ago, 300,000 tons, we were last year somewhere in a level of I think 180,000, 190,000 tons. We'll reduce this another time. But 10% this year to 170,000 tons, so a little bit above, something like this. And we are working there on further topics on further projects like the construction of photovoltaic plants, on purchase contracts, on wind energy, on new wind energy sites offshore because we're absolutely convinced that we have to bring the CO2 emissions down up to a level of CO2 zero in the longer term. If I go just for a second to the Slides 10, 11 and 12. Greece. Greece really continued quite fine. They got further airports ready. We will see -- whatever the traffic development is, we will see the fee increases this summer. And this spring, I think it's already, I don't know exactly. So we will see a positive effect there that we can increase the charges by EUR 5 per passenger to EUR 18. So there will be a very positive effect and to really, congratulations to our team there. They did a great job. Same in Brazil. Also there, we have minimally completed the extension works also in terminals in Fortaleza and Porto Alegre. I'm on Slide 11. Those airports will increase. So we doubled the terminal area and we'll increase the retail area by roughly 25%. We renewed the taxiways, created parking facilities, aircraft positions and so on. The next topic there is now the extension of the runways, which should be completed by end of 2020 in Fortaleza and end of 2021 for Porto Alegre. So we stay also on the budget, that's quite fine and working quite good. Lima has continued the success story also with further traffic growth last year. So we need really urgently the new capacity there. We started with the -- preparing works for the runway construction that's already proposed to work, that's already under construction, the runway, then we'll start with the construction very soon. We expect to -- the runway to be up and running by 2022, so that we have further growth potential there because nowadays, the capacity is quite full. The terminal, that should be early enough by 2024, 2025. So for the time being, we expect to cash out about EUR 200 million to EUR 300 million this year, subject -- that's a little bit question to down payments to the construction companies on the projects we would see. Guidance, I mentioned already. I tried to give you a little bit an indication how it works because what you see here on Slide 14, we try to give you, on the one side, an indication how we see -- how we saw the guidance before corona and then the corona impact. And the corona impact is very simple. It's all negative, so it's a problem there. So it's very, very difficult to predict from today's point of view what the year average is that we will be for the next weeks and probably months more on a minus 60% of passenger traffic and probably also movements. While movements -- at the moment, we are on minus 25% of movements, but there's still this grand terminal work in place. That means airlines have to fly, so don't want to lose their slot for the next season, next summer season or next winter season. They have to fly at least 80% of the total slots. Otherwise, they would lose their slots, which makes no sense because the flights are -- they are not empty of course, but the circular effect, that's really coming down. And it makes also no sense from an environmental point, it makes also no sense because we need, at the end, healthy airlines. Airlines will survive. So I'm absolutely sure that over the next weeks, the EU Commission will leave this topic and the 80/20 rule. And as soon as this is skipped, then of course, airlines will take out even more aircraft and park more aircraft. So if -- I would expect for the next weeks at least a passenger reduction of minus 60%, maybe even more, then probably movements will also go to minus 50%, minus 60%, something like this. And it's a big operational topic where to park all these aircraft. It will not be possible to park them all in Frankfurt, no chance. But our people are working on this in close links with Lufthansa because that's our biggest home carrier, of course, to organize all this. And that's a positive thing. The bigger the class is, the closer links are. Sorry for that, but that's also true because we are also fighting together with the government to get to the wise decisions on that side, by federal government, by state government and so on. So far from my side. Thanks very much. Matthias to continue.

Yes. Thank you, Stefan, and a warm welcome also from my side. Let me start my presentation with a more detailed view on our segment performances in 2019 starting with aviation on Slide 16. Our revenues in Aviation segment increased by EUR 22 million or 2% over 2018, which was broadly in line with the traffic development. After a good run rate under the Q3 presentation in November, aviation charges and revenue from security services in Q4 '19 were stable compared to the previous year due to the capacity reduction in the winter flight plan. Including for incentives, incremental aviation charge amounted to around EUR 6 per passenger, which equates to an increase of EUR 6 million or 0.75% in total. So half of the passenger growth rates, which was in line with our expectations for 2019. You see that a disproportionately high revenue increase of EUR 30 million or nearly 9% came from security services, which incur costs in roughly the same amount, so they do not influence the segment's EBITDA. In '19, there was again a negative effect from cost for security personnel, which could not be reimbursed in the amount of around EUR 4 million. Negative EBITDA development of minus 1.6% has to be seen in the context of the reversal of a provision in the amount of EUR 10 million in Q3 2018. Adjusting the figures for the reversal, we see an EBITDA increase of 1.9% from the underlying business. From last -- from past publications, you also know that the EBIT was affected by shorter assumed lifetimes of some Frankfurt assets and therefore, higher depreciation of EUR 20 million in 2019. Consequently, EBIT was down by EUR 24 million to EUR 140 million. Usually, at this point, I would provide you an outlook for 2020. But as Stefan already pointed out before, the development of the segments in the group will be strongly influenced by the spread of the coronavirus. For this reason, I ask for your understanding that we cannot comment on the segment's expected development in 2020 at this point of time, but it will be clearly negative. Having said this, let me continue with our retail and real estate segment on Slide 17. First of all, looking at the performance of our retail business as a whole, 2019 was a very successful year at Frankfurt Airport. An increase of 6.8% over the previous year was realized on the back of favorable passenger mix, meaning much stronger intercontinental traffic growth, new and refurbished shop concepts as well as higher revenues from advertising. In total, retail revenue thus was up by about EUR 14 million. I will go into further details here on my next slide. Another important driver. Parking revenues were up by around 5% or EUR 4 million due to the traffic increase and more important, a higher utilization of our parking lots and price increases. It is worth highlighting that flat total revenues are a very good result, having in mind that we were missing around EUR 22 million revenues over 2018 due to the sale of our energy supplies as subsidiary. On the other side, OpEx decreased by more or less the same amount, it is EUR 22 million. All in all, EBITDA and EBIT performed fine, growing by EUR 8 million and EUR 7 million, respectively. Coming now to the retail business in detail. Starting with the big picture, we are satisfied that we were able to increase our revenue per passenger in every quarter, so that in total, we clearly outperformed our initial target of additional EUR 0.10 per passenger. We finally ended up with a plus of EUR 0.16 or retail revenues per passenger of EUR 3.28 in 2019. One of the drivers of this positive development, where shopping revenue is growing by 7% year-over-year. The passenger growth of plus 1.5%, this means that the average ticket increased by around 5%. In addition, advertising performed very well, which realized an increase of more than 20%, especially due to different fares. The declining trend in revenues from services reflects a lower demand for banking services, including currency exchange and car rental services. On the right side of the chart, you see that among the high-spending countries, especially China and Vietnam, contributed to the positive development in terms of retail revenue per passenger. In 2019, passengers to Vietnam showed a spending behavior, which was 11x higher than the average spend per passenger. The spending behavior of passengers to China was 7x higher than the average. Among the high-volume countries at Frankfurt Airport, passenger numbers to the U.S., Turkey and India showed significant growth rates on an already high basis. On the next slide, you see our ground handling financials for 2019. Over the course of 2019, we saw a very positive development on the basis of a rather weak year 2018 due to operational challenges. Total revenue thus increased by more than EUR 30 million, which was mainly driven by the traffic growth in Frankfurt and the gain of additional market share. As explained in previous presentations, the positive development of other revenues in 2019 was driven by higher demand for additional services in combination with better contract conditions. Staff costs increased due to higher wages, in line with collective bargaining agreements and a higher number of employees. Nevertheless, we were able to realize an EBITDA growth of more than 35% over 2018 and a clear positive EBIT despite higher depreciation. Coming to our final segment on Slide 20, international activities and services. In '19, we saw a steep revenue increase of around EUR 87 million without IFRIC 12. This development mainly resulted from the strong operational performance in Lima, tariff increases in Greece as well as from our U.S. business that accounted for operations in New York, JFK T5 and Nashville for the first time. On top of that, the U.S. and Lima operations benefited from a favorable U.S. dollar to euro conversion rate. The positive revenue development as well as the new accounting standard, IFRS 16, which mainly concerns leasing contracts of our U.S. business, drove the segment's EBITDA growth of EUR 32 million or 7.7%. It is important to take into consideration that these figures compare to results which had been positively impacted by the disposal of our share in Hanover Airport in Q4 '18 with an EBITDA impact of around EUR 25 million. Fraport Brazil was able to realize an EBITDA on the previous year level despite adverse FX effects and the temporary closure of significant retail space due to the construction works. Taking into consideration the operational challenges the company was facing caused by the before mentioned effects and the bankruptcy of Avianca Brazil, one of the biggest airlines at both sites. This was a very good result. In Bulgaria, the decrease in traffic numbers of around 11% also negatively impacted the EBITDA and had an effect of minus EUR 8 million. Fraport Slovenia's slightly negative EBITDA development was due to the insolvency of Adria Airways in late September '19, which was the home carrier of Ljubljana Airport with a market share of 50%. Looking at the entire portfolio, I would like to emphasize that we saw a successful year 2019 in a challenging environment for the aviation industry. Now toward the end of my presentation, I would like to give you an update on our group cash flow and net debt situation. Starting with the operational performance, you see that we recorded a significant increase in our operational cash flow as well as the cash flow adjusted for working capital changes. The improvement was mainly due to the underlying growth, better interest result as well as the new accounting standard, IFRS 16. In line with our expectations for '19, the total CapEx increased significantly on the back of our investment programs in Frankfurt, Brazil and Greece. In Greece, meanwhile, we have completed the construction works at 9 of the 14 airports. In Porto Alegre, the terminal expansion was opened in November, and we are about to open the new parts of the terminal in Fortaleza at the end of this month. Despite the high dividend inflow from our investments in Antalya, the free cash flow of the group in '19 was negative at minus EUR 374 million. On top of that, our group indebtedness was influenced by the dividend outflows as well as a 10% stake acquisition in Lima at a purchase price of EUR 40 million. At year-end, net debt reached out -- reached about EUR 4.15 billion. This figure is slightly above the guidance we gave you at the start of the year, which is mainly due to a down payment or upfront payment for Pier G of exactly EUR 112 million. To conclude my presentation for today, let me guide you through the expected CapEx and cash flow development for the current year. Continuing with the construction works of Pier G and Terminal 3 and adding maintenance CapEx and CapEx for the upgrade of the existing terminals, we expect CapEx in Frankfurt to grow to a level of around EUR 950 million. Despite not being able to provide you a precise forecast for the operational cash flow today on the back of the ongoing investments, we expect a clearly negative free cash flow in Frankfurt. Having completed the majority of construction works in Greece and Brazil, we expect declining CapEx figures at these sites to around EUR 100 million and EUR 150 million, respectively, and then we are through with the CapEx in both countries. In Greece, we will make good progress working on the biggest single project in Thessaloniki. In Brazil, we will continue with the runway extensions. Both companies, Fraport Greece and Fraport Brazil, have a project financing in place which cover the investments at the airports. In case there are no significant impacts from the coronavirus on Greece, we estimate that the company will be free cash flow breakeven this year already while Brazil will remain negative. In Lima, the construction works for the runway will impact the CapEx profile this year. Subject to possible upfront payments, we expect an investment amount of around EUR 200 million to maximum EUR 300 million this year. All in all, these developments will lead to a significant increase in net debt to around EUR 5 billion by year-end 2020. Based on this, we also expect our net debt-to-EBITDA to increase notably. So having that said, I'd like to thank you for your attention and hand over now to the Q&A session.

[Operator Instructions] The first question is from the line of Ruxandra Haradau-Doser with Kepler Cheuvreux.

Three questions, please. First, do you see chances for the aviation tax increase in Germany to be postponed? Second, at the beginning of the year, Dr. Zieschang mentioned that only 50% of the CapEx for Terminal 3 was signed at that stage. I understand that you currently plan to proceed with CapEx according to plan, you have a solid liquidity position. But if demand weakness was to remain at minus 60% or higher for a longer period of time, what would be the flexibility you have on the CapEx program in Frankfurt? And third, how high was the incentives you paid to airlines at Frankfurt Airport last year? And could you please remind us how the incentive mechanism works? Once an airline qualifies for 3-year incentives, do they continue to receive incentives even if traffic is declining from 1 year to the other within the 3 years period of time?

Thanks very much. To start with the third topic, the official incentive program which is linked to growth and new routes, despite this -- and you know the details there. Despite this incentive, we are not giving more details airline per airline or in total. Regarding the topic of CapEx, Terminal 3, what's mentioned is that 50% of the volume is tendered, the other 50% is not tendered up to now that's why, so we would be flexible on that side. But we will -- from today's point of view, and I would probably say also the same in one year, we will not use this flexibility because if on such a big construction project, you start to stop this one now or to interrupt this on some issues, then you will run into a big mess to finish it ever and with high cost overall. Our view on the future is that we have a big issue, that's right, and we're on a big crisis not just aviation, but in total. And I'm absolutely sure you will see much more effect on the general economy in some weeks, in some months. But we are also, at the same time, quite convinced that the long-term perspective for aviation is positive. Why people want to travel? They will not change their life completely. So all the experts are telling us and they want to be mobile, and they want to explore further cultures and so on and so on, going on vacation, all those topics. All the professional studies we see on that are still in favor of aviation. You can discuss the level of growth rates. But from our side of this, we have no indication that there's a general game changer in place. So we are optimistic on that side. And if I take all the recent crisis over the recent 20 years, we have always seen a strong recovery. Maybe it takes a little bit longer to get to the same level of 100%, so not in the first step, but we have seen a strong recovery. And second, all experts are telling us that coronavirus could affect a lot of people, there's no question at all, but it's a topic of -- in between 1 year to 2 years, something like this, 2 years, worst case. So I would not expect on 2 years to have reductions on the same level we just see because all the people get common to this. They will continue with their normal life at some time. I can be wrong, I know. But I'm not so negative, as you mentioned, and we don't see that we need that flexibility. So from today's point of view, we will continue on that side because you know there was 70 million passengers here in Frankfurt. Terminal 1 and Terminal 2 have been really fully utilized, even if not a little bit more than fully utilized. On federal topics, aviation tax. So the increase of aviation tax, we have -- it's one of the topics we asked for, that's right, as an industry in total. But much more important for us was and thanks there to the federal government that they took the decision last weekend and being very fast now to implement it on the short-term work because that gives us flexibility to bring costs as quick as possible on a social responsible way down. That was the most important thing. The other topics, no question, aviation tax will be a second topic or passenger wise, the second topic and you can bring up further topics there. I think for the industry, in general, that's also very important. The program they communicated today is also a very stabilizing program to give whatever flexibility, whatever liquidity is necessary. Whether this is right or not from a general perspective, we can discuss it, but it will have a lot of smaller companies. It's not a topic for us. We have high cash reserves, bank lines and so on, more than EUR 1 billion. We will be prepared on that side. But if you take all these midterm companies, they will be very, very soon affected. And so don't get such a flexible liquidity or credit facility, something like this, and that's very important there for them.

The next question comes from the line of Elodie Rall with JPMorgan.

I have 3 questions, if I may. First of all, in terms of capital allocation and strength of your balance sheet. And given that, indeed, this year, we're seeing a big stress on traffic, therefore, EBITDA, therefore, cash flow. Given your balance sheet was already getting more and more leveraged, given the increase in CapEx, do you see, first of all, a risk that some of your plans might be delayed? So if it's CapEx or dividend, do you also see potentially a risk of meeting one of your debt maturity, if you could remind us a little bit of where we are on the situation there? So that's my first question. Second, on China, given that you operate an airport there, the airport, do you see any change in trends very recently or over the last week, for example? Just to try to understand if the situation there is starting to get better? And lastly, I know you've touched based on your flexibility on OpEx, but could you come back on that? Like what is the percentage of your OpEx that is fixed and variable, for example?

Thanks. Very good questions. First, China is not the most important airport for us, it's just a 25% participation. So we are, these days, much more focusing on Frankfurt, on the big participations and to get the wide measurements in place there. So China is very, very much down on traffic, but it's for us, financially really at the moment, not under focus. So recent numbers, I heard some numbers, minus 90% at the moment or minus 45%, I learned, whatever, I don't know. That seems to be very, very negative on that side, but it's financially not important for us. On CapEx, to give you another topic there I haven't mentioned, of course, one thing we are working on is that we are not starting new CapEx programs that we have, then we'll have a discussion on that one. So what I mentioned is we will continue those CapEx programs, which are already under construction because otherwise, it's getting too expensive. But CapEx programs, also smaller things, they will have a discussion to postpone those things, which makes sense in such situation, but we have to have that discussion project by project. On dividend recommendation, we'll be, as you have seen in the annual report, that we'll pay out the EUR 2 for the year 2019. And we believe that we also can continue the EUR 2 for 2020 because the guidance on dividends is to be in the range of 40% to 60%. We were very much now on the 40% in 2 years, and the further guidance is to keep it stable as long as it is really a onetime effect. One thing is also clear, if the world is dying, then we will not pay dividends. But there, we aren't. Let's first see how the coronavirus is affecting us over the further months, our business, what the perspective is there and come up for the rest of the year and so on, and then we have to take that decision. Finally, I don't want to weaken the message we have given to you that we will be stable on the dividends, but you can be also sure that we are experienced enough to manage the business in a responsible way. From today's point of view, we don't have any problem on the banking market, on the capital market, to get money, and we will strengthen even our cash reserves there, that's absolutely clear. But there's no question we are still very attractive for that market, and we have a very stable business, even if we have these big onetime effect now, but we don't see a long time change there. Third point was on -- your third question?

Fixed and variables.

Fixed and variables. That's very good, I don't know, [ 70% ] -- Matthias there, you probably have an idea.

When you look at the Frankfurt side and focusing on the 3-year segments here on the side, we have -- if you take together all personnel costs, we are talking about EUR 900 million. And when you look on the material expenses, we are talking about EUR 250 million. So this is a total amount, which we could theoretically attack. If you look on material expenses, there are a lot of things inside like fuel, like electricity, et cetera, which is not variable, but we assume that up to 20% is controllable and can be scaled down. On the other side, when we look on personnel expenses, we have this big tool or a big lever with short-time work. And the question, at the end of the day, is what is the extent? What we can bring down 10%, 20%, even 25%, 30% of the work. And then you have a direct impact on the cost side. And as Stefan already mentioned, for example, if we go for it, even as an example, if you go for 20% short-time work, our cost reduction is 90% roughly of this number, yes, but we have a guidance what we can try to attack on the cost basis. Now it's up to us what will happen on the traffic side and how fast can we react on the cost side.

Okay. That's very clear.

Just to add one topic. One thing is clear, we will not be able to compensate the negative effect per passenger with cost reductions. There's no chance on fixed cost business. On the one side, on a timely effect, if I have a passenger left today, I'm not -- it's not possible to get the resources down the same day, so we have a shift in between there. That's the reason, for us, it's really important to get all the measurements these days in place so to apply beginning of next week already for short-term work that we start with this instrument because up to now, we use very much the instrument to cap shifts, to skip shifts, and which have to be then worked later on, end of the year, but we have to get more flexibility, that's the reason for short-term work. So we are not managing these days the company, just by topic, our top-down, let's bring down the cost by 10% because traffic is down by 30% 2 weeks ago. Now we're really going maximum attention, whatever is possible to cut, to cut and to bring down the resources as much as possible, of course, to the level of traffic reduction on the operational side. And the topic you are asking for to have some ideas on general guidance, will be a second priority for us, but not the first priority. But at the moment, we have to shift, if you want to change the culture of people, to bring them in that cause and cause and models, and it's working very good. But that's a full attention on at the moment.

The next question is from the line of Michael Kuhn with Societe Generale.

Basically following up on a couple of topics that were already discussed. Firstly on -- let's say, the current development, passenger mix and so on. What do you see -- if you look at the business of just leisure traffic and what do you see in terms of the international traffic segments, is there recovery, Asia, et cetera? And looking at those mix changes, how does it influence your per passenger spending at the airport? Then secondly, again, following up on the liquidity topic, a couple of companies have started reporting current liquidity numbers. You mentioned you have no problems to get money. What is your current cash position? And do you plan to prop up that position just to, let's say, give yourself a little extra buffer and headroom in case the crisis intensifies? And then one more, let's say, in terms of mass events and the impact on your overall passenger number. Obviously, Frankfurt is a major location for trade fairs, what amount of passengers do you expect to lose for those ones, also for the automotive trade fair that will leave Frankfurt permanently? And then as a very last question, you mentioned a couple of, let's say, scenario analysis numbers, profit per passenger and a decline in the passenger number. Could you maybe repeat those numbers, just to be sure we know what the P&L impact of certain changes in the passenger growth would be?

Okay. Let me first start with -- to repeat those numbers. If I take these days, so it's not the total from March -- well, let me start with March. If I take the first 12 days of March, on average, we are on minus 35% of passengers and a minus 15% of movements. If I take this week, so Wednesday, Thursday, then we're already on minus 45% of passengers and minus 28% of movements. And I gave you the estimate for the next weeks. Now with the U.S. summer flights and -- not summer flights but for Europeans, at least, with some other countries, all stopped European flights to Argentina, Singapore and others. We would expect, because we have a high portion of U.S. traffic, that this minus 45% of passengers could go to minus 60% or even more than minus 60%. It's not just everything rational, it's also because the behavior of people. If you close schools, if the Chancellor is getting into the TV mentioning those things, then there is an overreaction or a further reaction, which you cannot really rationally argue. So that's the reason I'm saying, there's a lot of emotion in that full discussion or history is just with panic that it could be not just minus 60%, it could also go to minus 70% for some weeks. We don't know at the moment, but we cannot exclude it. And that's the reason we have to be prepared with short-term work and all those things and to bring cost as much as possible down. So the passenger mix is very difficult. At the beginning, we have seen -- and I mentioned this number, minus 70% capacity reduction on China. China is still down, even if we get the messages from China that production is getting up and so on, and they are coming back a little bit, at least, to normal life. But a little bit is not a really normal life. So the capacity reduction is still on that level of minus 70%. There's nothing changed, but it depends very much from destination to destination as the destinations are fully utilized, but the [ site inspectors ] say it's just half of normal. So you should estimate at the moment that the spend per passenger is really depressed because all we see is that, on average, all segments, it's domestic, it's international, and it's also European, are getting down. There are weeks where it's more on the -- at the beginning, it was more on the intercontinental side and domestic but not affected on European traffic. Now it's more in European, but international, so on average, at the end, all segments will be down. I don't see a big difference there. Announced a decision today or yesterday in Russia that they would screen all incoming flights or incoming passengers, and you have to go as a foreigner 14 days in quarantine. It would mean that also those flights will come down to 0 because -- I can't believe that anybody from Germany will be prepared to go to Russia and then to go first for 14 days to quarantine, not at all. So these are things we cannot predict that are suddenly happening, and we have to deal with this. We need flexible instruments, and that's the reason we cannot exclude anything. There are some rumors that even it could be, even in Europe, in general, coming down to a grounding on navigation for 2 or 3 weeks. I don't believe it. I have not heard those discussions if I discuss with politicians with the government, but you cannot exclude anything these days. So it makes no sense to give more detail there on passenger mix and so on. But we will keep you updated via our IR department, and we will, for sure, give you more information than in the past on passenger development because that's the best indicator we can give you on what's going on there and how we see them the next month. So from today's point of view, I would expect that we somewhere will be on that minus level for the next, at least 3 months. I'm not more optimistic there on that level. What's happening thereafter in summer, summer could be a little bit better because normally, in summer, it's more leisure traffic, as mentioned. And a lot of people will continue at the end to follow a normal life and to go on vacation, and they're not all so afraid as some public discussion on that these days. But it's uncertain to be quite honest. Liquidity, probably you'll take it, Matthias?

Yes. With regards to liquidity, we feel very comfortable because in the past, we have been always attacked or there have been a lot of complaints about our high cash position. Now it's good to have this position. We have in our group balance sheet, cash position and also including cash equivalents of more than EUR 1.1 billion. And on top of this, we have unused credit lines of more than EUR 500 million. So in total, more than EUR 1.6 billion funds available. On the other side, based on our indebtedness guidance for 2020, we guided an increase of the indebtedness from EUR 4.1 billion to about EUR 5 billion. So we need, based on the CapEx program, roughly EUR 800 million to EUR 900 million fresh money. And on the other side, as I mentioned, we have EUR 1.6 billion available, but it's not our intention to use the cash for this requirement, it's just our reserve, of course. We go as normal and go into the market, and we'll refinance these requirements based on bilateral loans. So promissory notes, et cetera, as always in the past.

Excellent. Just one last follow-up. As you briefly mentioned a, let's say, worst-case scenario of a grounding of all air traffic. Have you done any analysis on what such a scenario could theoretically cost you?

Now I think you can calculate it if you look at the passenger numbers, and we gave you the indication that whatever passenger number we are missing, it's an EBITDA effect of EUR 10 to EUR 14 per passenger. You don't have and we can give you the numbers month per month because we are now getting from May onwards, May, June, July, of course into the peak months. But at the moment, we are discussing just the next 4 weeks. So of course, we have to focus also in May and June, but we have to have much more focus on the next 4 weeks to see that we there get all the elements in place.

The next question comes from the line of Cristian Nedelcu with UBS.

Three, if I may. First of all, coming back at the OpEx and in particular, the cash OpEx that you're spending. I mean, now that you have a bit of visibility into the, call it, [ SAR's bite ]. Could you give us A rough indication what the Frankfurt's cash OpEx expenditure per month or a range, something that would help us there? Secondly, on the CapEx, in relation to your guidance this year, could you give us a bit of color in terms of the timing of the CapEx? And obviously, it's more weighted towards the first half, towards the second half. Do you have a bit of flexibility here and there to delay from quarter-to-quarter? The second question, if I may. I mean in the past, you're mentioning sort of net debt-to-EBITDA levels, potentially with a preference to stay below 5x. I mean how do you think about this, the leverage, sort of sustainable leverage going forward or the sort of range that you feel comfortable with? And the third one, looking a bit from the working capital sides, could you talk about reinsurance of insurance for bad debts or any similar instruments there in case of smaller suppliers of yours get into financial trouble? Any color would be helpful.

Yes, thank you for the questions. First of all, your question regarding OpEx, as I mentioned, we are talking about EUR 900 million personnel cost for the Frankfurt segments plus EUR 250 million material expenses, so this is the whole total amount. In a worst-case scenario, let me say, for these 2 items, we spend roughly EUR 100 million cash out per month, so as a rough indication. And then the question is what can we bring down in such a total grounding scenario, which we see as a really worst case, and if then just temporary. So CapEx, so we -- and I think I gave you the guidance for our CapEx programs: EUR 950 million, Frankfurt; EUR 200 million to EUR 300 million, Lima; EUR 100 million, Greece; and EUR 150 million, Brazil. First of all, starting with the last 2 programs in Greece and Brazil, as I mentioned, at the end of the year, we are through. We are through in Greece because all the 14 airports are fully fixed. So then the cash drain goes nearly to a small double-digit amount at both sides in Greece as well as in Brazil. So in Brazil, again, in this year, EUR 150 million, and then we are through with the 2 terminals and also with the runway investments. So that in 2021, we just focus on 2 remaining CapEx programs, and this is Lima. In Lima, we guided -- so we guide for this year, EUR 200 million to EUR 300 million, primarily for the runway. Next or upcoming years, when we're talking about the terminal, this is, in so far, I wouldn't say variable, but then we have a theoretical chance to delay or not to delay. For the runway now, we have to go forward, and we are going forward. And in Frankfurt, if we divide this total amount of EUR 950 million in this year into the 2 items, T3 on one side and the rest on the other side. We have a clear indication on the decision to go forward with T3. All -- or each every other decision would be ridiculous. So we continue with T3. And on the other side, with the remaining EUR 350 million for the northern part of the airport base, there is some variability, and we have to see what we can delay or not delay. Yes, with working capital, we have an extremely low working capital. This is already optimized. And with regard to this item, we can't see any potential to improve because it's really going to nearly to 0. Net-debt-to-EBITDA, we have our long-term maximum of 5x in the moment. We go up a little bit faster due to the EBITDA weakness, which we will see in this year, that's for sure. On the other side, we are counter steering. We can play a little bit with the CapEx in the next couple of years, so we think this coronavirus is a temporary issue. Nobody knows how long the temporary situation will be, but there will be an end. And in this, let me say, in the immediate time span, we are going to manage the company and be sure that the financial equilibrium will be stable also in the long run.

The final point on working capital for the smaller companies, suppliers and so on. Insurances, no, we don't have any interest in what the federal government would do, I don't know. But we have to be careful how we spend our money there. And it's not a specific Fraport issue, if at all. It's just a general issue for the whole economy, but that's the reason that the government issued today such a big credit program, whatever I should call it, I don't know, to stabilize the economy in general.

The next question comes from the line of Johannes Braun with MainFirst.

Three questions, actually. Only one is related to corona. And that one is -- I mean you mentioned the suspension of the flat rule, the 80-20 rule. Question would be, is that already included in your guidance from an EBITDA impact of EUR 10 to EUR 14 per passengers being lost? Because clearly, airlines will park more aircraft now, and you will not only miss the related passenger fees, but also the landing fees that means that the hit per passenger should be stronger. And then any news on the Antalya concession re-tendering, which was recently stopped? And lastly, I'm not sure if I completely understood the CapEx numbers for 2019 and the guide for 2020. I think you reported for 2019, EUR 1.4 billion. But the original guidance, I think, was EUR 1.2 billion and also the 2020 guidance of EUR 1.4 billion, EUR 1.5 billion looks a touch higher than expected to me.

Okay. I'll take the first 2 questions. The 80-20 suspension is included in the guidance because the guidance is so wide, EUR 10 to EUR 14, don't worry at all there. It's much more an operational issue. How to park such a lot of aircraft is -- this will occur. On the other side, it will help us because it's more strict and more consistent than on short-term work because it makes no sense if you have 50% less passengers or maybe even for some weeks, minus 70% or something like this or for whatever period, I don't know, but just minus 30% movement. So that's an embedded, it's absolutely clear. We need also surviving airlines. Antalya concession, there's no new message on that. It depends on the government. There have been rumors that it would come quite soon. There are rumors it will be delayed by 2 to 3 years, which would be possible because our concession is running up to end of 2024 as far as I know. So whatever the reason is, probably, they we also have other topics these days. And with coronavirus, I can't believe that it will come this year, but that's the decision of Turkey. CapEx?

Yes. I'll take over the CapEx question. First of all, let's start with 2019. You can see on the Slide 21 what we spent for the programs and when we go through. So in Brazil, we spent EUR 240 million, and this has been a clear amount more than what we guided. But this has nothing to do with the cost over, and this has to do that they have been, which is very positively to see ahead of the milestone plotting. So what is now higher in '19 will be less in 2020, so this was the main driver for the total overrun in 2019. Plus, on top of this, the upfront payment for the PRG in the amount of EUR 112 million. So if you deduct from the EUR 1.38 billion, the upfront payment plus roughly EUR 50 million, EUR 60 million more in Brazil due to faster progress, we are exactly in line with our guided numbers. In 2020, on Slide 22, when you look on the guidance, as I mentioned, now it's a little bit more. Again, we are very fast at Brazil, and we can say that end of the year, we are through in Brazil as well as in Greece. So that's the reason why there's a little bit more in this year and less in the following year. Today, we expect the absolute CapEx peak in this year. And also with regards to T3, we can say that the construction site is running very well. You can see everywhere, the cranes over there making good progress. And in combination with this, we see also the CapEx outflow for T3, but as a clear proof that this site is running very well.

The next question comes from the line of Nicolas Mora with Morgan Stanley.

Just a few follow-ups on the COVID on 2 areas. First one, we are -- we're hearing airlines are starting to lobby quite hard to get waivers on passenger fees or at least cuts. And we hear news from Norway, for example, today. Just wondered what you thought about this? And second, on MAGs, so minimum annual guaranteed rents, when do you think you'll start to negotiate with your travel retailers friends, so the Heinemann and so on, to basically lift the MAGs because they seem completely unsustainable for these guys? And last point on the CapEx, I mean, come back on the previous question. I'm also a bit surprised both for '19 and '20. I mean you always guided that the peak was 2022, 2023. I'm not sure I totally understand why, especially Frankfurt, and especially on the maintenance, so much you needed right now. I just wondered whether you've actually -- what was the genuine flex for the point, the EUR 350 million you gave for 2020? I mean, that looks 50% -- 50% to 100% too high, but happy to get your view there.

Okay. Let me start with the first question on passenger fees, waivers there, no, nothing, no requests from airlines. And to be quite honest with the situation we are in, we will not be prepared. So that makes no sense at all. We've suffered enough, and they can ask the federal government or whomever, but not us. And we don't have this topic on the table. Regarding the mix, that depends very much on the different contracts of the different airport, but you also have to take into account there, sometimes there are also force majeure clauses and so on, and that we have force majeure. So that's very difficult, there's not one answer. But we are going through that with the different concessionaires to see what we can do and to see where the MAG is and what the contractual rights are.

Coming to your CapEx question. So I'm a little bit confused because we are in line with our guidance. We last -- we said for last year, about EUR 1.2 billion, now we came out with EUR 1.38 billion, and I think I give you the explanations why we had this increase, again, due to the upfront payment, and then second, also to the work in progress or the good progress which we made, especially in Brazil but also in Greece. When we look forward, we always said that in '20, '21, '23, we see a settle as a peak and not one year where we reached the highest amount of CapEx, and it's very difficult to predict precisely how much we spend in a year. And let me say the guidance that the amount in this year -- first of all, it's pure coincidence that we now have a high CapEx amount on one side, on the other side is coronavirus. But this high amount of CapEx, again, is an expression that our construction sites are running extremely well and that we are in time and on budget. And I just can repeat that we are, in this year, end of this year, we are through with 2 big CapEx programs, and this is a big success. So we do not talk about Greece. And next year, just that all the 14 airports are fixed and opened and the same applies for Brazil. And in Lima, again, we are now continuing with the runway. We have some flexibility about the point of time to start with the construction of the terminal. This is a little bit of discretionary issue. But with the runway itself, we are also making good progress. And when we focus in Frankfurt, again, the EUR 600 million for T3 are expression of the progress. And the EUR 350 million, this is not just maintenance, but this is creating the confusion. In this amount of EUR 350 million, we have roughly EUR 200 million maintenance, maximum EUR 250 million, the rest is also investment from upgrading or upgrading elements in the terminals, in existing terminals, T1 and T2. And this is also some amount which we can control or influence, but it's not EUR 350 million maintenance CapEx.

Okay. So just on the latter point on Frankfurt. There's not a hidden kind of cost overrun built into just the higher CapEx for 2020? We are still -- you're still sticking to the envelope of EUR 4 billion, although I can imagine 50% of it is not bid yet?

EUR 4 billion, for what?

For T3. For T3.

Of course. Of course, as I mentioned.

The next question comes from the line of Christian Cohrs with Warburg Research.

Yes. I hope can you hear me?

Yes, sure.

Okay. Most important questions are already answered, but some minor ones remaining. First of all, can you maybe shed some color, what was the background for the impairment you made on Xi'an Airport end of last year? Was it already due to COVID-19? And secondly, if so, are there any more impairments coming up due to the spread of the coronavirus within your airport portfolio? Secondly, you just mentioned that your construction sites are running very well. There were some press rumors that in Frankfurt, that you have to deal with contaminated excavation with extra contaminated soil. Does this mean any meaningful extra costs? And then lastly, I was a bit confused by your rule of thumb that one pax actually translates into EUR 10 to EUR 14 on EBITDA level. My calculation was that you have EUR 12 per pax in aviation, roughly EUR 3 to EUR 3.5, if there is a big decline on business travelers rather than more than EUR 3.5 in retail. And then, obviously, also some coins for the ground-having business. So does this equation EUR 10 to EUR 14 per pax on EBITDA already includes the benefits of short-term labor? Or am I missing something?

Starting with the last topic, the guidance, EUR 10 to EUR 14. So it's relatively complex because now we -- in opposite to the past, we have a change of the total structure of the elements of our fee collection. So first of all, that was one of the first question, I think, from Ms. Haradau-Doser, where she raised the question whether we are going to pay incentives or not. In the past, all our metrics have been included incentives. Now it's just washed out because the growth will be negative. So this gives us some, let me say, support by the number. This is already included. On the other side, we have the situation that in the first 2 months, even the intercont share was higher than before, so now we have to look what will be the new balance between cont and intercont, and then we have also a further element, which we have to consider is that normally, if we gain or lose 2% passenger growth on both sides, all these elements in this very complex structure remain well balanced. Now we have the situation a number of passengers went down significantly. Number of movements is significantly less. Also the seat load factor, which always, in the past, just showed deviations of 1% to 2%, now it's clearly different. And that's the reason why we're now taking into consideration all these elements to came to this range of EUR 10 to EUR 14. So what you said, first of all, you said EUR 12. This is not correct. We have -- if you look on our P&L, the total amount of fees, which we collect is roughly EUR 700 million, EUR 730 million exactly. If you divide this by 70 million passengers, we came out to a little bit more than EUR 10 per passenger based on the past. And again, now all these, let me say, equilibrium of elements is different compared to the past. That's the reason why I feel comfortable with the 10% to 14%, and this has not included, of course, all the things on the cost side, which we try to initiate to compensate something of this negative impact.

On the impairment of China, on Xi'an, we know that Xi'an is going for a big extension program. The extension is very big, it cost a lot of money. We would have been more in favor, a little bit smaller, to be quite honest. And then if you make such calculations with long-term passenger growth, long-term fee development and so on, we wanted to be more on the conservative side. That's the reason we decided to take here an impairment on that side. If possible, we will, of course, influence the extension program to be more realistic, but that's in China, not so easy. The contamination issue, that's in the numbers, in the guidance and so on. So the tenders are done already, and it will be solved over the next 6, 7, 8 months. So that also will be carried away.

The next question comes from the line of Andrew Lobbenberg with HSBC.

I would say, I did miss some of the early parts of the call. So deep apologies if they've been covered before. But I want to come back to something you said about the market being open for you to raise money. Can I just sort of double check that there are tools open for you to raise cash today and in the coming weeks? And to -- wanted to remind us of what those tools are? And then another basic question, I'm afraid. You said it's a no-brainer to continue with the T3 CapEx. Can you just talk through why it is such a no-brainer? I mean, I imagine you don't want to follow it and close the site entirely but given that the prognosis for traffic is slower, so I think I certainly believe it will recover in time. But the pressure for needing [ them most ] goes away. So if they are not tend to slow the CapEx and delay the opening. And then my old hobby, however, forever of security. Happily, I'm sure your security lines are working swimmingly at the moment, but is the current situation an opportunity for you guys to move equipment or just improved processes or facilities to give you a chance of delivering a better service to consumers when normality returns?

If I may start with security, you're absolutely right. It's of highest importance for us and that's the reason I mentioned in the presentation already that the positive thing is that we are back on negotiation with the federal government to restructure their responsibilities. Whatever the outcome will be on detail, but first positive is that we are back on negotiations as they are prepared to discuss this. We have different views what could be the solution, but we announced those discussions and that's positive. So you're absolutely right. The problem is the responsibility these days is not with us. It's mainly with the federal government, but it's better somewhere around with different companies and nobody really has a responsibility, and it has to be changed because it's really a negative CapEx spend for the airport on that side and that's for years already. So that's on -- at most importance besides handling required slot. On Terminal 3, the message behind us at the end, if you look at the way how we construct Terminal 3, you have to know that the core building of Terminal 3 is just going with 2 piers, so 1 sharing pier and 1 non-sharing pier. Of course, you could now discuss postpone the full project. But if you postpone the full project, it will cost you much more because all the contracts are linked for -- linked in for final opening up of -- finalization of construction by end of 2023. So if you now open it up for a year more, everybody will come up with additional costs and so on. So you have to make that calculation, whether it makes sense to do this or whether it's better to go through. And second point is that the general experience on those big projects that you should be very, very careful to change anything in the flow of such a big project because then you come to interrupt, to difficult processes there and it will cost you much more at the end. So topic makes no sense to open up Terminal 3 at the end with one, let's say, non-sharing pier, but without a sharing pier, would not save a lot of money on that site. But the main building you need because they are all the technology or the techniques in. So that's the reason -- despite the first point that we believe that we will see a recovery after that crisis that we really need that new infrastructure there. Because on the one side, of course, Terminal 1 is already quite old infrastructure, but technically, because we believe in the long-term perspective for the market. These are the topics behind. So if you want really to have a big mess, then you should interrupt now really on Terminal 3, but then you know there is a big mess, it will be a EUR 1 billion or EUR 1.5 billion or EUR 2 billion more ticket at the end, that's a topic, that's experience with those big projects. You should -- you can stop them before you start, but you should never stop after you start, then you have to go through.

Financial markets, again, we are approaching the market with a background that we have EUR 1.1 billion cash plus more than EUR 500 million unused credit lines. And I think this is situation which is very comfortable and that's also the reason why the banks and investors are willing to give us money. And we can't see any hustle in the market, especially for us. So we continue with our program. Program means issuing of promissory notes on one side, bilateral loans and private placements on the other side. So business more or less as usual.

[Operator Instructions] The next question is from the line of Stephanie D'Ath with RBC.

I just wanted to come back on your sensitivity analysis of the number of euros of EBITDA per passenger. So if you assume, let's say EUR 14 of EBITDA per passenger and a 25% decline that would be about [ EUR 253 million ] EBITDA headwinds. So basically the 25% traffic decline would translate into a 35% EBITDA contraction. Is that kind of the right sensitivity to think about for your nontransferred business? So my question is really should we think about the same kind of operating deleverage outside of Frankfurt? My second question is about Lufthansa grounding you their fleet. How many million passenger does that represent or hundreds of thousands on a monthly or quarterly basis, please? And finally, can you remind us of your mix business versus leisure, please, in terms of overall traffic?

Let me start with the first one on Frankfurt, non-Frankfurt, I think the rationale you gave or the relation you gave for Frankfurt is correct. Then we have further cost measurements, which we have to deduct, but will not be such a big amount, but something like this is correct. On non-Frankfurt, it's a little bit more different because we have much more on outsourced business on non-Frankfurt.

So it's significant less. It depends from side-to-side, from asset-to-asset...

It depends of the margins, if there is some...

It's significantly less.

Yes. So we don't see this big impact outside of Frankfurt but it depends, of course, a little bit also how the passenger numbers are affected outside of Frankfurt for profitability of that business. Number of passengers, what you mean? If there would be a full grounding, which we don't expect at the moment, but we cannot exclude. That was the only point I mentioned. If something would happen in Europe, then of course, it's zero for those days, not just Lufthansa, then it will be completely zero, not just Lufthansa.

Grounding is grounding.

So we don't believe in...

But didn't Lufthansa -- sorry, didn't Lufthansa announced half their capacity being grounded for an amount of time.

Yes, that's part it's not grounding. Sorry very much. Now I get your point. That's part for specific timing. Grounding is something a government is deciding on. It's not an airline or it's because of an insolvency of an airline. So if -- the European Commission would decide that they want to ground aviation in Europe because they believe it's helping in and not spreading around any further the virus that would be 100% down, then it's not just that airline or that airline. So we don't believe that this will come, but we cannot exclude anything. I just learned that today, even the state of Hesse will now decide to close down schools. Fine, okay, I have to accept this, but it's not affecting our business maybe some of people have more time to go for a vacation, okay? But that's another thing. So I don't want to be -- or I want to be -- it's a safety risk. On...

Sorry, my question was more for Lufthansa specifically. I think they said -- and when I said grounded, I meant their aircraft. So I think they decided to ground half their aircraft. So how much does that represent of your traffic piece? Sorry.

Lufthansa has a market share yield of roughly 60%. And this up to 50% to park aircraft and to take out the capacity was already in, in the guidance I gave you, that we expect a personnel reduction over the next days and weeks. From nowadays, 45% down, up to 60%, maybe depending with the U.S. because that's also in there. And there, numbers of Lufthansa up to 70% could be. You're not really convinced. What's your the topic behind or what we have missed to answer?

I think the...

No, it's very clear.

That's okay. Thanks very much. [ It is ] in the numbers we gave you.

And just maybe lastly, business versus leisure, if you have a breakdown, please?

Thanks very much. We have on business, something like 40%, 43%, something like this. Leisure is around the remaining, if you want to have it this way. It's not all leisure, but it is mainly leisure the remaining for this piece of that business.

The next question comes from the line of Stuart Gillies with Kempen.

This is actually Charles Maynadier from Kempen and on Gillies. One follow-up on the topic that was quite relevant a few months ago, but has been somewhat pushed in the background now. You're expecting a -- to announce potential long-term agreement on tariffs with Lufthansa. So how should we look at it now? And maybe more generally, what impact do you see from corona on the regulatory aspects of the business in Frankfurt?

On corona, we don't see directly an impact on the charges. What we see is that the European Commission is still working on a revision of the charge to -- aviation charge to directive. They would like to involve to bring in the CO2 portion somewhere and metrics with CO2 linked to this. So to be more environmental, to give positive impact. We see that they would like to have further transparency. We see that they would like to go to approval body, just one per federal government or per federal state, those things. It's not on single till or dual till, or those discussions. But that's with the European Commission and it's up -- if it would come, it would come in 5 years from now or something like this but not on single till, dual till it would be more on more detailed things. With Lufthansa, we are in a very good cooperation and that's the most important thing at the moment. So we are in discussions. So we have been in discussions to strengthen the cooperation between the 2 companies but this says it's more on both sides on the crisis models, and that's the focus we have, and we are quite close working together there.

So should we still expect an -- flat tariffs in 2021 and 2022, publicly until T3 opens?

We -- that's the guidance we have out at the moment. And so up to now, we haven't taken any other decision.

At this time, there are no further questions, and I hand back to Christoph Nanke for closing comments.

Yes. So thanks, everybody for participating in these interesting times. I'm sure we will stay in touch in the coming days to discuss any new information and new developments. And -- so for the time being, I wish you a nice weekend.

Bye.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.