After more than a year of negotiations and two Greek elections, Greece has signed a €1.2-billion, or $1.3-billion, deal with German airport operator Fraport to lease and manage 14 regional airports in the southern European country.
The 14 airports include the country’s second-largest in port city Thessalonika in northern Greece and a series in tourist centers such as the islands of Mykonos, Santorini, Skathos, Rhodos, Korfu and Kos.
The deal between Fraport, which leads a consortium including Greek firm Copelouzos, and the Greek government, has been under negotiation since last November and followed a tender process launched in 2013. Four months ago, there were doubts whether the deal would go through as Greece’s new left-wing government reconsidered the sale of state assets.
It is the government’s first major privatization deal required in return for receiving several European bailouts the past five years. Greece, which would have gone bankrupt without European assistance, is expected to sell state assets originally to be worth up to €50 billion.
Fraport said the transaction will close during fall 2016 and it will then begin operating the airports and pay the takeover sum.
For Fraport, which runs Frankfurt airport, the third-largest in Europe, the deal is attractive as it gains the right to run the regional airports for the next 40 years in one of Europe’s biggest tourist destinations. Tourism is a cornerstone of the Greek economy, making up a fifth of GDP, and it has remained relatively strong despite the country’s debt crisis.