Greece conceded 14 regional airports to Fraport for 40 years and €1.234bn up front

Fourteen of Greece's regional airports — the gateways of its tourism economy across the Aegean, Crete, continental Greece and the Ionian islands — were state-run. The Hellenic Republic Asset Development Fund ran an international tender for the right to upgrade, maintain, manage and operate them, divided into two groups of seven, and awarded both to a consortium of Fraport AG Frankfurt Airport Services Worldwide and Slentel Limited of the Copelouzos group. The concession agreements were signed with the Greek State on 14 December 2015.

The structure is the point. Greece did not sell the airports: ownership of the infrastructure stayed with the state, and the facilities devolve back to it when the concession expires. What it sold was time and performance — two 40-year agreements, written as forty plus ten, against a lump sum of €1,234,000,000, a guaranteed annual rent of €22.9 million adjusted each year for inflation, and a variable fee for the full duration of 28.2% of EBITDA for Group A and 28.94% for Group B.

Operational transfer followed sixteen months later, on 11 April 2017. The concessionaire took on a four-year airport upgrade programme, which the state fund records as completed earlier than planned, with investments of more than €440 million in the first four years and an estimated €1.4 billion across the forty-year term. It also took on a service obligation written in somebody else's units: to comply with the Level C criteria defined by IATA, and to maintain those service levels for the entire duration of the concession.

For Fraport, Germany's biggest airport operator, it was a step change in its international portfolio — fourteen airports in one contract, in one of Europe's largest tourism markets — taken jointly with a local partner that could carry the Greek side of the relationship. Fraport's chairman Stefan Schulte said the project underlined the know-how the company could bring to fourteen gateways vital to Greece's economy and its tourism sector; Dimitris Copelouzos called tourism the heavy industry of Greece.

€1.234bn lump sum to the state, €22.9m a year of guaranteed rent plus 28.2–28.94% of EBITDA, and over €440m of upgrades in the first four years.

Upgrading fourteen airports at once needed capital and operating know-how that the Greek State did not have, which is why the tender was international.

Selling operation rather than the asset kept ownership and the devolution clause in state hands while still raising €1,234,000,000 of cash immediately.

Pairing a fixed inflation-indexed annual rent with a share of EBITDA gave the state both a floor and an upside on how well the airports performed.

Writing the service standard as IATA Level C made performance measurable by a third party instead of arguable between the state and the operator.

Splitting the tender into two groups of seven, with a Greek group inside the consortium, kept a deal of this size politically and operationally manageable.

Concede the operation, keep the asset. A 40-year lease with an IATA service-level obligation and devolution at expiry turned a state liability into an annuity without giving up ownership.

Operations transferred on 11 April 2017 and the four-year upgrade programme finished earlier than the contract allowed, with more than €440 million invested in that period against an estimated €1.4 billion over the concession. Greece kept the asset: the infrastructure and facilities devolve to the state on expiry and the concession runs forty plus ten years, so the state collects the €1,234,000,000 lump sum, the €22.9 million inflation-indexed rent and its 28.2 to 28.94 percent share of EBITDA while somebody else runs, rebuilds and is held to IATA Level C at all fourteen.